south africa vs nigeria
INTRODUCTION
The 2008 economic crisis affected African nations in the developing world in a very similar way. Nigeria suffered a fall in oil prices , reduction in exports and a downward trend in the stock market whilst South Africa suffered the same effects but rather than crude oil they suffered in the fall of commodity prices. Policies to stimulate the economy are different in terms of trade where Nigeria is more free trade and South Africa became more protectionist after the crisis. The Nigerian economy lacks diversity and is overly dependent on Oil , while South Africa has a very diverse economy and spreads risks across multiple industries. One must note the difference in state ownership , after the crisis Nigeria’s response was to privatize whilst South Africa invested more in its SOE’s highlighting the importance of state ownership in South Africa. However after the crisis the two countries took similar measures to improve the investment climate and increase the FDI flow so as to increase economic growth.
POLICY COMPARISONS
Policy responses in regards to trade differ in the two nations as Nigeria takes a free market approach by deciding to join ECOWAS and remove trade barriers within the region promoting trade (Uzochukwu 2009). Whilst South Africa focus on import substitution so as to lower imports and improve their trade balance , taking a protectionist stance. These are different strategic moves in response to similar effects caused by the economic crisis. As Nigeria decides to Increase Trade between other West African nations there goal is to increase interaction and economic co-operation between neighboring countries (Femi Aribisala 2009). This is due to reduced trade between Global North and Global South caused by the economic crisis. South Africa however decided to take a more protectionist approach to protect their economy due to high trade deficits , rather than promoting trade like Nigeria has done their policies restrict trade. Import
The 2008 economic crisis affected African nations in the developing world in a very similar way. Nigeria suffered a fall in oil prices , reduction in exports and a downward trend in the stock market whilst South Africa suffered the same effects but rather than crude oil they suffered in the fall of commodity prices. Policies to stimulate the economy are different in terms of trade where Nigeria is more free trade and South Africa became more protectionist after the crisis. The Nigerian economy lacks diversity and is overly dependent on Oil , while South Africa has a very diverse economy and spreads risks across multiple industries. One must note the difference in state ownership , after the crisis Nigeria’s response was to privatize whilst South Africa invested more in its SOE’s highlighting the importance of state ownership in South Africa. However after the crisis the two countries took similar measures to improve the investment climate and increase the FDI flow so as to increase economic growth.
POLICY COMPARISONS
Policy responses in regards to trade differ in the two nations as Nigeria takes a free market approach by deciding to join ECOWAS and remove trade barriers within the region promoting trade (Uzochukwu 2009). Whilst South Africa focus on import substitution so as to lower imports and improve their trade balance , taking a protectionist stance. These are different strategic moves in response to similar effects caused by the economic crisis. As Nigeria decides to Increase Trade between other West African nations there goal is to increase interaction and economic co-operation between neighboring countries (Femi Aribisala 2009). This is due to reduced trade between Global North and Global South caused by the economic crisis. South Africa however decided to take a more protectionist approach to protect their economy due to high trade deficits , rather than promoting trade like Nigeria has done their policies restrict trade. Import
References: : Monetarism http://www.britannica.com/EBchecked/topic/389146/monetarism Inflation targets are proving to be a very unhelpful guide to monetary policy settings by Brian Kantor [sept 30th 2013] http://www.zaeconomist.com/category/monetary-policy/ Ha-Joon Chang (2002) Kicking away the ladder: Development Strategy In Historical Perspective The Conduct of Monetary Policy (CBN) http://www.cenbank.org/MonetaryPolicy/Conduct.asp Yergin and Stanislaw (1998) The Commanding Heights Uzochukwu (2009) Global Economic Crisis: Nigeria’s Economic response Framework for South Africa’s response to the International economic crisis 2009 - The South African CFO of the Future.