Coping Strategies Towards Surviving Economic Crises Amidst Covid-19 Pandemic - THE BUSINESS PACKAGE


Saturday, October 3, 2020

Coping Strategies Towards Surviving Economic Crises Amidst Covid-19 Pandemic

The COVID 19 pandemic that rear its ugly head in Wuhan province of china in December 2019 before spreading to virtually all countries of the world had created a lot of problems such as  massive deaths, health challenges, high unemployment and poverty levels, and low  economic activities to mention a few. This unfortunate situation further compounded the challenges Nigeria is already grappling with, such as insecurity banditry, corruption, epileptic power supply etc.

The lockdown declared by the federal government in March 30th grounded key sectors of the economy such as Aviation, Manufacturing, Oil and Gas, Hospitality and Tourism, Small, Medium and large Scale Businesses and up till now the economy is opened gradually in order not to escalate the spread of the diseases. The prediction from the IMF fund (IMF) concerning the negative impact of the pandemic is that it will precipitate a global contraction of the economy by end of 2020. This calls for a major concern especially in Nigeria where about 94 million were in abject poverty, the inflation rate is 13.22% and unemployment rate is 27.1% as at August 2020. Not forgetting the huge debt profile does not portends good time for the country. With all the aforementioned indices associated with recession, the question should be how we survive the incoming economic crises. The following action plan can shield us from feeling the heat of the recession:

1. Create an emergency fund that will augment your salaries during recession thereby given you   shock absorber associated with increase in prices of foods, goods, services and lay off of staff   by Private Companies and Organisations. The practical way of determining the amount that is supposed to be in your emergency funds depends on the individuals and household spending daily, weekly or monthly e.g An average worker who is single and spend  one thousand naira on daily basis can calculate  his / her emergency fund as follows:

 N1000 X 7days  = 7000 X 6months which is 26 weeks.

                                    7000 X 26 = N182, 000

This amount must be left untouched in a separate account only to be used during the recession.

2. Create multiple stream of income: One of the bitter lessons learnt during the lockdown was lack of financial capacity especially from people working in the private sectors such as Aviation, Hospitality, and Private Educational Institutions etc. The untold hardship due to unpaid salaries for three to four months resulted to seeking for financial supports from friends, relations co-workers and request from governments for palliatives to cushion the effect of hunger. Therefore in order to avoid such condition from happening, this is the time to start a petty trade in commodities such as food stuff, plantain chips, fruits, or open gas filling shop, or start a small poultry at your backyard etc so far there is market for it in your environment.

3. Join a Co-operative Society especially the Credit and Thrift type that you can save, invest and have access to loan with low or no interest at all because there are few non-interest co-operative societies available nowadays. In addition you can also engage the Esusu type of contribution where you contribute a certain amount daily or weekly and you are expected to re-collect the money every month end or as agreed with the collector.

4. Invest in real estate especially land acquisition which appreciates from time to time. There are numerous land advertised by real estate companies at cheaper prices as low as forty five thousand naira per plot that you can buy now and even plant cassava, maize and vegetables on the land. This will enable you to resell at high prices when the recession bites harder on your finances and you need money for unforeseen suitation. Similarly the harvested crops can also bring income to augment your salary. I know of someone that bought a land for twenty thousand naira fifteen year ago, it is amazing that the same land is presently sold at eight hundred thousand naira.

5. Establish an investment forum or club in your workplace or neighbourhood where you pool financial resources together and purchases commodities in bulk and resell to members at reduced prices. Also profit derived from such business can be shared according to your contribution.

Akintan Ismaila writes from Crescent University, Abeokuta


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