Tips To Help Businesses, Individuals Survive Imminent Recession – Economist
Africa’s largest economy has seen months of economic shock resulting from the health and economic crisis arising from the coronavirus pandemic.
The federal government has cut the country’s budget benchmark for oil to $25 per barrel, from $57 and $30 earlier projections.
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The International Monetary Fund (IMF), in the April “World Economic Outlook: The Great Lockdown,” projected the country’s Gross Domestic Product will contract by 3.4% and face huge fiscal financing needs.
The world economy was also projected to shrink by 3.0%, which was far worse than the 2009 global recession.
A senior economist at Nigerian Economic Summit Group (NESG), Wilson Erumebor, said, “Recession is looming. As the economy contracts due to fall in oil price and COVID- 19, citizens and businesses will feel the brunt.”
According to him, during the period of recession, businesses and individuals could, “identify new market segments with potential. Food processing is one of such.”
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Ten Tips To Put you Through The Looming Recession
- Develop a budget to monitor income and expenses. This would help curb the urge to spend indiscriminately.
- Eliminate all unnecessary costs- travels, vacation, *shopping… This is not the time for irrelevant & unproductive expenses.
- Negotiate for cuts from service providers
*Ask for discounts-school fees, insurance.
*Ask for part payments for heavy expenses such as rent. - Make future purchases Now! Recession in Nigeria comes with rising prices. To control this, buy items needed in the future now.
- Save! Have an emergency fund that can last 3-4 months. The best time to save money is when you have some. Saving for the future requires making huge sacrifices for today’s consumption. “Do not save what is left after spending, but spend what is left after saving”- Warren Buffet
- Be careful with lending money. You can include a charity account in your budget to avoid being stranded after lending to others.
- Diversify your income:
- Invest in yourself-get new skills to earn additional income.
- Look for new opportunities in addition to your current job.
*Businesses can identify new market segments with potential during a recession. Food processing is one of such.
- Try as much as possible to keep your current job & don’t slack. Mistakes at this time can be costly & can lead to job loss. Maintain good relationships at work.
- Invest in “good” stocks and in dollar assets/funds. The share price of many companies has fallen below their real values. Also, some investment banks have dollar funds. Take advantage. Seek advice from experts.
- For businesses, key into government support programmes that target your sector. You will be doing your business a great service by taking advantage of the Central Bank of Nigeria and federal government support programmes.
“There is no harm in trying. Search for them and apply,” he added.
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