By Smart Emmanuel
Nigerians are grappling to survive the harsh economic realities as the country’s economy slides into an economic recession. A country is said to be in recession if she post two consecutive negative growth in Gross Domestic Product (GDP) in its quarterly report. In this light, the National Bureau of Statistics (NBS) reported a decline in economic growth for the first two quarters of 2016. In the Second Quarter of 2016, the nation’s Gross Domestic Product (GDP) declined by -2.06% (year-on-year) in real terms. This was lower by 1.70% points from the growth rate of –0.36% recorded in the preceding quarter, and also lower by 4.41% points from the growth rate of 2.35% recorded in the corresponding quarter of 2015.
That is not all, as other economic indices show a disturbing decline. The NBS report indicates that the country is neck deep in double digit inflation at 17.5% since February 2016 and unemployment rate is over 13.8%. Worse still, Naira, the national currency has lost its purchasing value. The unflattering fluctuating high exchange rate – especially gassing the United States dollars – have provoked a spike in the prices of goods and services. In addition, the unstable rate has brought many companies to their kneels with many of them shutting down or relocating to neighbouring countries. Consequently, many have lost their jobs and the capacity to provide support for their family.
With all the myriads of problems facing the individual and the economy at large, it is safe to say that this is not the best of times for entrepreneurs, households and the Government at all levels. While recession may not be an ideal economic experience for any nation or the citizens, it is sometimes unavoidable; because it is a part of normal economic cycle which according to Prof. Alberto Alesina, a Political Economists at Harvard University, happens once in every five or at best eight years. With this knowledge, staying prepared is the antidote to surviving when it occurs.
The Following are what to do to cope in recession;
- Plan Your Spending
The time of recession is not the time to spend on impulse, rather, our spending must be rational. Irrational spending leads to buying what is not needed which is mostly inimical to savings. The reason supermarkets and advertisers display their wares is to wet our appetite and make us make irrational purchase decisions which ultimately make us buy what we crave, rather than what we need.
- Create An Emergency Fund
Emergency funds are deliberate savings in an account that can be used to sort out unexpected emergencies like hospital bills and other unforeseen situations. Emergency fund must be created by income earners at all times whether in recession or not. Emergency fund can be saved from that extra pay, side business, cash gifts by that uncle or friends etc because such monies come as extra and are majorly not part of budget.
- Diversify Your Income
This is the time to adhere to the common adage that says “it is wrong to put all your eggs in one basket”. This is the time to diversify the income stream, by setting up a side business that you can easily leverage your spare time to get additional income. You may want to use your smooth talking skills to host events during weekend and holidays. If you have carpentry skill, perhaps this is the time to make repairs for a fee in addition to your regular 9 to 5 job.
- Utilize Effective Alternatives
This is not the best of time to run your generator 24/7 or drive that V8 car that guzzles a lot of fuel when a four cylinder car can do the same duty effectively at cheaper cost. Also, switch off all your appliances and use energy savings bulbs especially when you have a pre-paid meter in your home or office to avoid paying much bills. In addition, reduce your telephone bills by making only important calls.
Don’t Eat Out Often
Research has shown that eating outside is not cost effective. This is not the best of time to go to fast food joint all the time. It is better to cook your food at home so as to save cost. Homemade food is always richer because you can control the ingredients hence, it is the best alternative at this time.