in a Period of Economic Recession
in Nigeria
FEATURED PAPER
By 1 Uzoma Francis Amaeshi, PhD
and
2 Obioma Desmond Amatobi
1 Department of Project Management Technology
Federal University of Technology, Owerri, Imo State
2 Department of Project Management
Enugu State University of Science &Technology Business School, Enugu State
Nigeria
ABSTRACT
The study examined the role of management in the impact of economic recession on Nigerian economy. The survey method of research design was adopted for the study. The population of the study comprised forty-eight (48) manufacturing firms listed on the Nigerian Stock Exchange. Data were collected from primary source through interview of the management accountants in each of the selected firms and analyzed using T-Test Statistics. Findings show that the key roles played by management in managing the impact of economic recession on Nigerian economy include; engaging in bulk purchases of raw materials and competitive buying, sourcing alternative local raw materials, embarking on cost engineering, prompt analyses of segments/products contribution margin, and carrying out comprehensive investment appraisals of every project to know the viable ones. Some other key roles were the use of weighted average costing method for valuing materials and replacement value method for pricing the finished goods. Based on the findings, we recommend that the producers of local raw materials for the manufacturers should endeavor to improve on the qualities of their raw materials to come up to the standard quality desirable by manufacturers. Also, management should perform their duties with meticulous professionalism by reacting promptly to the signs of an economy being in recession and report to the relevant authority.
One of the major consequences of recession is a general slowdown in economic activity over a period of time. It therefore beholds and organization to set up a robust Risk management to assist in consolidating property values, claims, policy and exposure information and provide the tracking and management reporting capabilities to enable the organization monitor and control its overall cost of risk. Unfortunately, unavoidable risks, the category to which recession belongs, is mostly ignored. This study therefore is an attempt at assessing the impact of recession on risk management systems and to appraise the effectiveness of the banks general risk management system. The study takes the form of a survey research, with questionnaires and interviews being the dominant source of data collected. Charts and tables have been extensively employed in presenting available data while the chi-square test was used in testing the stated hypothesis. The analysis of data shows that there is a significant relationship between the global financial crisis and the risk management systems of Nigerian banks. The global financial crisis placed a strain on existing risk management systems of banks in Nigeria. The study therefore recommends a strict adherence to the risk management system in place while the practice of constant review of this system should be adopted.
1.0 INTRODUCTION
Background of the study
It is trite knowledge that organizations exist for a purpose; either to deliver service or achieve particular outcomes to enhance the welfare its stakeholders. In order to realize their planned objectives, the organizations embark on several projects. Sometimes some of these projects suffer some setbacks due to unforeseen circumstances. Some of these unforeseen may impact project outcomes by interfering with the scope, completion time schedules, planned project costs and quality delivery. It is these unforeseen in a project that constitutes the projects” risks; which according to Heinz (2010) refers to the uncertainty that surrounds future events and outcomes.
Environmental conditions and constraints within which business organisations operate are the major sources of the risks which not only create negative outcomes but positive ones as well. it therefore stands to reason that the state of the economy within a business organization operates would certainly have significant impact on its project risks profile, nonetheless, in a recessionary economy.
An economy in recession is characterized by; sluggish demand, stagnant output, Business failures and increased unemployment – Chambers (1994). The challenge which an economy in recession poses to project risk management and how to weather the storm is the objective of this paper. Thus, are there risks that have become more critical as a result of recession in the economy, that require new skills and more attention to mitigate their impacts on project realization; or has recession created more opportunities that need to be exploited by project risk managers.
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How to cite this paper: Amaeshi, U.F. and Amatobi, O.D. (2021). Managing Project Risk in a Period of Economic Recession in Nigeria; PM World Journal, Vol. X, Issue VII, July. Available online at https://pmworldlibrary.net/wp-content/uploads/2021/07/pmwj107-Jul2021-Amaeshi-Amatobi-managing-project-risks-in-period-of-recession.pdf
About the Authors
Dr Uzoma Francis Amaeshi
Federal University of Technology
Owerri, Imo State, Nigeria
Dr. Uzoma Francis Amaeshi is Associate Professor in the department of Management Technology, Federal University of Technology, Owerri, Imo State, Nigeria. His doctoral work is in Management with areas of research interest that include: Human Resources Management; Organizational and Entrepreneurship development. He is a Postgraduate from the University of Nigeria Nsukka, within career areas management cum Banking & finance and has undertaken and presented papers in several conferences within leading career development organizations in Nigeria. Utilizing excellent communication skills, he developed and maintained successful working relationships with both internal and external staff. He is looking forward to securing a position in academics, where he can bring immediate and strategic value and develop a current skill set further.
Associate Professor Amaeshi can be contacted at uzor1958@gmail.com or uzoma.amaeshi@futo.edu.ng
Obioma Desmond Amatobi
Enugu State University of Science &Technology Business School
Enugu State, Nigeria
Obioma Desmond Amatobi holds a BSc in Accounting; MBA (Banking & Finance); MSc (Project Management) and graduated from the Department of Project Management, Enugu State University of Science &Technology Business School, Enugu State, Nigeria. He is a member of the Association of the National Accountants of Nigeria (ANAN), Chartered Institute of Taxation of Nigeria (CITN) and the Institute of Management (NIM). He is currently a Deputy Bursar of the Federal University of Technology Owerri. He has the experiences in teaching, University administration and professional workshops among which include procurement and materials management (ASCON), Badagry and legal issues on contract tendering (NBA). Jos. Amatobi D.O can be reached on obidess@yahoo.com
