The InternationalMonetary Funds (IMF) predicted in 2015 that Nigeria’s economy will slide into arecession in 2016 by 1.8 per cent. The forecast indicated that our economy willgrow at a much slower pace than South Africa’s. Months after the prediction,truly Nigeria slipped into a recession. Everywhere around the world, recessionis one of the most dreaded economic downturns.
The reasons - although notfar-fetched – include, but not limited to, drop in stock market, hike in unemployment,salary cuts in most private establishments and monumental decline in housingmarket. Many economy and non-economy experts have weighed in on the ways tocurb the ripple effects of this monster that has clutched its fist on commerceand trade. But like they say, talk is cheap. Recently, I heard in the news thatthe Minister of Finance, Mrs. Kemi Adeosun, out of her many ‘un-put-down-able’rhetorics on how to revive the economy and chase out recession, had said thecommencement of rice production in some parts of the country will deal a majorpositive blow on the recession. Well, I’d like to think she was quoted out ofcontext because I can’t think of any immediate impact rice production will haveon the economy right now. But then again, what do I know about the economics ofa country? Absolutely nothing!
Our fears andworries about the ugly reality of where we’re at this point in time arecompletely not misplaced. We have reasons to quake with fear. Prices of itemshave shot up like never before. And sadly, revenue/income has remained firmlyreluctant to grow. Not too long ago, I saw a meme that was circulated on socialmedia which compared very aptly the rising costs of living to a student whopasses his exams and moves from one class to the other, and income to a studentwho has been repeating same class with no hope of graduating to a new class.While the meme was very amusing, it passed a very serious message in a comicalway but the underlining truth could not be missed for those who could readbetween the lines.
Nonetheless, this Doesn’t mean that the things a recession carries around are mere economicvices. A number of macro economy experts have made deliberate efforts to shiftour attentions to the equally promising opportunities that a recessionpromises. While it may be highly improbable to sell these opportunities toanyone, I think they are surprisingly appealing, depending on what side of thedivide you are. As a travel and tourism enthusiast, I am always on the look-outfor bright and ingenious ideas on how to grow our hospitality sector. I ledmyself to a lot of mind-boggling and quizzical conversations on how to rewritea better destiny for this sector. And so, an economy in a recession, as far asI am concerned, is not a threat to this sector. Rather, it will boost itsgrowth and the attendant benefits are the ingredients we need to promote thesector.
Recently, JumiaTravel’s global CEO, Paul Midy was in the country on a week-long working visit.During his stay, a number of journalists dropped by our office to have a quickchat with him. Although, more than 90% of these distinguished journalists intendedto inquire if Jumia Travel will be relocating office from Nigeria due to therecession and also find out what the company was planning to do to stay afloatin business. They all came prepared, each of them hoping to be the first tobreak the news of the company’s decision to pack its business from Nigeria andrelocate to any of the more economically stable African countries. Sadly, theCEO’s response was indeed the most shocking comment they had ever received fromany top boss they have spoken to since the recession paralyzed the economy.Paul quickly dismissed their speculations on any plot to relocate. He statedthat the recession makes our business more lucrative and profitable. The shockon their faces betrayed their expectations.
“The reason, he continued,is because recession has made the country a cheaper place to do business. Thefall in the value of naira makes it cheaper for people who want to trade withNigeria and for businessmen and women to travel through Nigeria to otherdestinations both in Africa and beyond. We know that many foreign firms arewithdrawing from Nigeria but we are instead increasing our investment becauseNigeria is our core market and with the depreciating value of the naira, goodsfrom this part of Africa have become very cheap for our customers in otherparts of Africa. We see recession as a short term and mid-term situation but inthe long term, Nigeria is still the strongest market with almost 200 millionpeople.”
The recession hasrestricted a number of Nigerians to the shores of the country to spend theirvacations. It is therefore not surprising that hotel booking portals havereceived an unprecedented requests from well-meaning Nigerians who are planningto spend their vacations in some of the tourist sites in the country. Peopleare already locking down a lot of hotels in the South South for the CalabarInternational festival in December. The recession has awaken our forsakeninterests in engaging in intra-country vacations by visiting any of the choicedestinations spread all over the country. A lot of airlines, hotels, travelagencies, OTAs etc, will undoubtedly benefit immensely from the patronage whichwill contribute significantly to our GDP eventually. More patronage for theseservice providers will also attract increase in the workforce, meaningemployment for more people. Imagine the millions of nairas which will hithertobe spent in other countries now being spent internally. The ripple will runthrough the whole gamut of our economy.
As one writer putit, "Nigerians are known for their love for luxury goods, foreign products,showing off and taking loans to keep up with the lifestyle. If people will everrecognize this misbehavior, these things won’t happen during a recession. As weknow from the past, a recession lasts for about 10 months, so good times willbe back. Nevertheless, they are necessary and you will experience a fewrecessions in your life, so better be prepared."
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September 30, 2016
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