Recession 2020: Are you prepared?
By Ebilehitah Samuel Idemudi
In April 2019, the Nigerian Governor’s Forum, the umbrella body of the thirty-six state governors, warned that Nigeria as a country should get prepared for another cycle of recession. According to reports, the recession is expected to begin by the middle of year 2020 and according to this report, the recession is expected to continue into the year 2021. While, the Central Bank of Nigeria have disagreed with the NGF about this prediction as the CBN Deputy Governor, Policy, Dr. Joseph Nnanna, expressed optimism that the economy would grow on the positive side, rather than go into recession in the year 2020, it will be unwise to take the statement of the NGF as child’s talk.
If truly there is going to be a recession, where does this leave the simple average Nigerian? The majority. The ones who do not really have a say in economic matters but whose lives are affected by the decisions of a few men in power.
Wikipedia describes recession as “a business cycle contraction when there is a general decline in economic activity. It generally occurs when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock an adverse supply shock or the bursting of an economic bubble”. While this sounds like a lot of grammar, we must not fail to realize that recession is characterized by “little or reduced spending within an economy”, meaning that during a recession, there is little or reduced amount of money in circulation. During recessions, companies do not make as much profit as they used to, and this in turn requires them to restructure and this restructuring can lead thousands and thousands of people to lose their jobs. When people lose their jobs, how do they purchase things that they usually do?
During the last recession which started to affect a lot of Nigerians in 2016, a lot of Nigerians lost their jobs and this contributed greatly to low purchases. And since the last recession, majority of the Nigerian population have been unable to recover. Those who had some money stashed away were mostly duped by Ponzi and get rich quick schemes. Nonetheless, while most of the population wallowed in the effect of the recession, there were other Nigerians who were not just surviving but also thriving. During recession, new projects were carried out, new businesses were started, houses, plaza were being built and renovated, new filling stations were established, new roads were constructed and all these activities generated money for the people involved.
While the normal reaction of a simple average Nigerian is to blame government and the world for their personal problems, experience should teach one that, that won’t work a second time. Irrespective of whether there will be a recession or not, hoping for the best and preparing for the worse is the best principle to live by at the moment. If truly a recession will begin by the middle of this year, it is better for the average Nigerian to take charge of his own personal economy and the best time to prepare for war is when there is peace.
Here are some few tips on how best to prepare.
- A Side Hustle: Most people only have one source of income. This is a very risky way to live. For the employees who only earn one source of income, an extra source of income can be achieved when you exchange more of your time for money. You can decide to leave your major job early, so as to get to work on some other job to earn extra income. This will mean working extra hours apart from your normal 9 to 5 job. This however is not a viable option in the long run because it can lead to stress and problems in the not too distant future.
- Intellectual property: If you’ve always wanted to share an idea, a message that you’ve always wanted to share to the public, here is a nice time to write it out and publish to the public. No matter who you are, you have a story or some other writing to let the world know about. It could be a song or any other plan that you’ve always wanted to share. All you have to do it put it down on paper and make sure that you package it properly for the public to get and talk about. Intellectual property simply involves bringing the idea you have in your head to life by making it available to the people of the world and when they find it valuable, they will pay you money for it.
- Be an Entrepreneur: Entrepreneurs are simply men and women who take it upon themselves to provide solutions – products, services or connections – that society needs and value, and in turn, they get paid for this. Entrepreneurs go on to “build” organizations or communities through sharing a vision or through their awareness of social capital. Successful entrepreneurs who are able to provide these solutions make money irrespective of economic cycles. This is actually a better option for those who are looking to be progressive in the long run. Being an entrepreneur also help you to leverage on the effort, time and money of other many other people. It is also a step to enhancing your career as an individual because the journey of an entrepreneur will provide you with skillsets that are of high demand across industries. You don’t just end up making money you become a valuable asset to your current organization, society and our nation, Nigeria.
- Investment: For those people who have been able to save up some money to this date, it will be wise to find viable investments. Leaving your money in the bank, will only make it easy for inflation to catch up with it. Examples of investment could be real estates, a diversified portfolio and so on. Be careful while investing your money. Make sure not to invest in “faceless investments” i.e investments where you do not see the people involved in such an investment or plan. Be watchful and ensure that you do not fall into the get rich quick schemes, some of which might return if the recession really hit by the middle of the year. Find someone who is successful in an industry or investment and ask them questions about how they succeed. Let them mentor you and guide you to make smart and profitable investments. Ensure that this mentor is putting his money where his/her mouth is and they are successful at what they are doing.
They say “once bitten, twice shy”. It will only be a mark of laziness and poor self-respect not to learn from the experiences of the previous recession and do nothing about it. Prayer is good, we indeed need to pray for our nation and about the various situations, but leaving everything to prayer alone without taking necessary steps to improve your own personal economy has always lead to stagnation. The Holy Book says, “Watch and pray so that you do not fall into temptation”. Each individual will have to take charge of his/her own economy, because when each individual’s economy is stable, it contributes to the wealth of a nation and this is what makes a nation a mighty one.