Recession is bad news for everyone. Do you know if you save 1 Naira everyday for a whole Year, you wouldn’t still have saved a Dollar?
It is no longer news that Nigeria has slipped into another recession. The ‘symptoms’ of recession has been developing in Nigeria for a long time but became visible few days ago when the National Bureau of Statistics report showed that Nigeria’s economic activities contracted by 3.62 percent in the third quarter of the year.
While this development has become a major headache for financial analysts, economists, business owners, and many other Nigerians, a large population of the country are still a bit unbothered about the present unfortunate economy situation. Most of the time, we don’t know we’re in a recession until after it’s been going on for awhile, and it’s starts affecting us personally
Predictable Impacts of Nigeria’s Recession on You
Economic recession is defined as two consecutive quarters of negative Gross Domestic Product (GDP) growth. GDP is the total value of all goods and services sold in the country during a specific period of time. Thus, a recession simply refers to a significant decline in general economic activity or when the economy slows down for at least six months.
While a recession is normal in any economy and might be short-termed, it comes with harsh impacts and adverse effects. Usually, people at all income levels feel the impact. Some of which includes the following.
- Increase rate of unemployment
Having a recession could mean you’ll earn less money or, more sadly, lose your job. Nigeria is witnessing an economic recession alongside high inflation rate. Read more about why you should be bothered that Nigeria’s inflation rate has skyrocketed here. There is a very high probability that businesses will stop growing and may even close due to increase in operational cost. The types of jobs that are at greatest risk for going away include manufacturing, finance, construction, media and tech. In other to keep running, many organisations might move to cut costs and, thus, reduce salaries or even lay some staff off.
Aside the risks of individuals who already have a job losing it, the future of getting a new job for fresh graduates is bleak.
- Your bag of debts might get bigger
When individuals are unemployed or making less money, paying their bills becomes difficult. This in most cases, can make people borrow more. This might slowly generate into loss of assets such as their homes, cars and other properties, in attempts to pay their loans.
- Increased crime rate
When there are fewer jobs in the country and more unemployed, there is a great probability that crime rate in the society will accelerate. This is because Nigerians will find ways to make ends meet and some of these ways might be quite dangerous for the larger society. This simply means that the little amount you manage to gather might not be very safe, especially with the enormous security challenge the country is currently facing. Therefore, there might be increase in
robberies, pick-pocketing, petty stealing, street hawking, kidnapping, child trafficking, fraudulent schemes and other financial crimes.
- Poverty and Underdevelopment
Recession further increases poverty incidence of the country and sinks the nation deeper into underdevelopment. The cost of living will go up astronomically too high for the core poor
and the middle class.
It might lead to extreme poverty and suffering of the masses. This will consequently lead to an hindrance to children’s right to quality education, just as affordable inclusive healthcare will be deprived.
- Low investment oppourtunities
Countries that experience robust GDP growth rates over time will attract investments as it
signals a business opportunity for everyone, and vice-versa. An economy in recession, like Nigeria’s, will not attract sufficient investments as it signifies a risky business climate, one which investors will flee from.
As people and businesses stop spending as much, the stock market also may have losses.There will be sharp decline in savings and investment, decline in the stock market activities, as some
investors might pull out their funds from the stock market due to high risks and uncertainties.
- Encouragement of the ‘manage culture‘
An average Nigerian will be forced to live an economical life. There will be a sharp cut on unnecessary spending. Cheaper means of transportation will be patronize as people might prefer to pack there cars except when highly necessary. Nigerians will have to adjust to the lifestyle of managing available resources. females might be forced to spend less on beauty products, some might even have to cut their hair to decrease amount spent in the salon. Unnecessary and irrelevant travels, avoidable shopping and flamboyant entertainment and food wastage are minimized. The purchase of expensive phones, and gadgets for males might drastically decrease. Getting new cars, household gadgets and appliances when old ones are still in good condition will be discouraged. The fast approaching festive season might be celebrated on a ‘low-key for many’.
People will have to fast imbibe the maintenance culture.