Wednesday, August 17, 2022

Fasten your seatbelts: How to successfully navigate Nigeria’s economic turbulence

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By Usman Shettima PhD. –

2022 has been a critical year for the Nigerian economy. The effect of the COVID-19 pandemic and the Russia-Ukraine war has had a transformative impact on businesses and livelihoods. Apart from the financial stresses and supply chain disruption associated with these events, the economy has also been hit by accelerating inflation.

Just recently, the National Bureau of Statistics reported an inflation rate of 17.71% for the month of May, 11 months high. Consumer goods have more than doubled in prices since last year, marketers of diesel, aviation fuel and cooking gas have had cause to increase prices.

In another sign that things are getting out of hand, the Naira for the first time exchanged for N600/$1 which spells doom for companies engaged in the import business. While all these signs manifest, the effect this could have on households in the coming weeks and months could be dire.

There could be a steep rise in food prices, taxes, fuel, electricity tariffs, groceries and other essential items that will make it extremely difficult for the average citizen to get by, especially with the current high level of unemployment.

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That’s why Nigerians must tighten their belts and cut back on unnecessary expenses that will break the bank. It takes commitment and time, but one can learn to manage his/her money even when there’s not much of it.

  1. Assess Your Financial Situation: In doing so, you are expected to ensure that your expenses are not more than your income. If this is the case, it is in your own best interest to cut back your expenses or earn more. This can be done by taking a proper assessment of your income and expenses. With this, one can easily develop a realistic budget.
  2. Eliminate Unnecessary Spending: Cutting back on expenses that you can live without can greatly improve your finances in these trying times. Be it subscriptions, unlimited calls, or even unnecessary trips, it is important to lessen the cost of things that are not essential to living or better still substitute them with other less costly activities.
  3. Use your talents to increase your income: This might be the time to consider a side hustle. Look into using your skill or talent in areas that interest you to make extra income.  If you like driving, fill any gap in your schedule as an Uber driver. Look into any new position in your industry, acquire the skills needed and get the job.
  4. Build an Emergency Fund: Save for emergencies to avoid seeking loans in the event of unexpected emergencies. This is because you will never know when sickness or accident can occur.
  5. Keep Your Cash: The smart thing to do at this moment is to hold on to your cash and avoid investments.
  6. Grow Your Food if Possible: For those having enough space in their backyards, you can grow your favorite fruits or vegetables that you purchase regularly. So, growing your food can be rewarding and has the potential to reduce the amount of money spent on groceries.
  7. Do It Yourself: Learning to do things yourself instead of paying extra is the surest way to cut costs. Instead of paying extra for services, learn how to cut your own hair, sew a button and hem clothes, fix plumbing issues and change the oil in a car.
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As the Nigerian economy passes through turbulent times, there seems to be no respite from the relentless rise in prices. While at least the government appears to have taken some measures, it is incumbent on us to tighten our seatbelts as we embark on this torturous journey with an uncertain future to avoid falling off the economic cliff.

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