Abstract :
The financial and economic Tsunami that erupted and shook the world in 2007/2008 is by now legendary. If anything, it has underscored the importance of planning in the recovery of the global economy, but perhaps more important, in containing the negative consequences of future shocks at the local level. However, this can only be done on the basis of sound understanding of the character of the present (2007/2008) crisis and how it is likely to impact on Nigeria economy in the immediate future. Using impulse response functions and variance decomposition techniques, this paper forecasts the dynamic response of the Nigerian economy to impulses both from within and outside the domestic economic system, triggered by the 2007/2008 global financial meltdown. It was found that the crisis is likely to be more severe not in the short-run but starting from 2015. Also, that in order to contain future shocks, there would the need to fundamentally restructure the external sector of the economy.
