Recession has sent tsunami ripples and wave shocks across the different socio-economic and political institutions in the Nigerian economy. Tension is mounting everywhere as job cuts are on the increase, while many global corporate organisations are shutting down their operations and a few are declaring bankruptcy. The key message of the paper is that the crisis should be used as an opportunity to introduce reforms to avoid future pro-cyclical fiscal policies to increase the quality of budgeting and to increase credibility. These reforms should include fiscal responsibility laws comprising medium-term fiscal frameworks, fiscal rules and independent fiscal councils. When fiscal consolidation is accompanied by fiscal reforms that increase credibility, non-Keynesian effects may offset the contraction caused by the consolidation to some extent. Nigerian budget should be capital projects based to sustain the economy rather than recurrent based which to a large extent drains the economy.
Recession, Economy, Budget, Policy
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