The International Monetary Funds (IMF) predicted in 2015 that Nigeria’s economy will slide into a recession in 2016 by 1.8 per cent. The forecast indicated that our economy will grow at a much slower pace than South Africa’s.
Months after the prediction, truly Nigeria slipped into a recession. Everywhere around the world, recession is one of the most dreaded economic downturns. The reasons – although not far-fetched – include, but not limited to, drop in stock market, hike in unemployment, salary cuts in most private establishments and monumental decline in housing market. Many economy and non-economy experts have weighed in on the ways to curb the ripple effects of this monster that has clutched its fist on commerce and trade. But like they say, talk is cheap. Recently, I heard in the news that the 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 the commencement of rice production in some parts of the country will deal a major positive blow on the recession. Well, I’d like to think she was quoted out of context because I can’t think of any immediate impact rice production will have on the economy right now. But then again, what do I know about the economics of a country? Absolutely nothing!
Our fears and worries about the ugly reality of where we’re at this point in time are completely not misplaced. We have reasons to quake with fear. Prices of items have shot up like never before. And sadly, revenue/income has remained firmly reluctant to grow. Not too long ago, I saw a meme that was circulated on social media which compared very aptly the rising costs of living to a student who passes his exams and moves from one class to the other, and income to a student who 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 comical way but the underlining truth could not be missed for those who could read between the lines.
Nonetheless, this doesn’t mean that the things a recession carries around are mere economic vices. A number of macro economy experts have made deliberate efforts to shift our attentions to the equally promising opportunities that a recession promises. While it may be highly improbable to sell these opportunities to anyone, I think they are surprisingly appealing, depending on what side of the divide you are. As a travel and tourism enthusiast, I am always on the look-out for bright and ingenious ideas on how to grow our hospitality sector. I led myself to a lot of mind-boggling and quizzical conversations on how to rewrite a better destiny for this sector. And so, an economy in a recession, as far as I am concerned, is not a threat to this sector. Rather, it will boost its growth and the attendant benefits are the ingredients we need to promote the sector.
Recently, Jumia Travel’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 quick chat with him. Although, more than 90% of these distinguished journalists intended to inquire if Jumia Travel will be relocating office from Nigeria due to the recession and also find out what the company was planning to do to stay afloat in business. They all came prepared, each of them hoping to be the first to break the news of the company’s decision to pack its business from Nigeria and relocate to any of the more economically stable African countries. Sadly, the CEO’s response was indeed the most shocking comment they had ever received from any top boss they have spoken to since the recession paralyzed the economy. Paul quickly dismissed their speculations on any plot to relocate. He stated that the recession makes our business more lucrative and profitable. The shock on their faces betrayed their expectations.
“The reason, he continued, is because recession has made the country a cheaper place to do business. The fall in the value of naira makes it cheaper for people who want to trade with Nigeria and for businessmen and women to travel through Nigeria to other destinations both in Africa and beyond. We know that many foreign firms are withdrawing from Nigeria but we are instead increasing our investment because Nigeria is our core market and with the depreciating value of the naira, goods from this part of Africa have become very cheap for our customers in other parts of Africa. We see recession as a short term and mid-term situation but in the long term, Nigeria is still the strongest market with almost 200 million people.”
The recession has restricted a number of Nigerians to the shores of the country to spend their vacations. It is therefore not surprising that hotel booking portals have received an unprecedented requests from well-meaning Nigerians who are planning to spend their vacations in some of the tourist sites in the country. People are already locking down a lot of hotels in the South South for the Calabar International festival in December. The recession has awaken our forsaken interests in engaging in intra-country vacations by visiting any of the choice destinations spread all over the country. A lot of airlines, hotels, travel agencies, OTAs etc, will undoubtedly benefit immensely from the patronage which will contribute significantly to our GDP eventually. More patronage for these service providers will also attract increase in the workforce, meaning employment for more people. Imagine the millions of nairas which will hitherto be spent in other countries now being spent internally. The ripple will run through the whole gamut of our economy.
As one writer put it, “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 ever recognize this misbehavior, these things won’t happen during a recession. As we know from the past, a recession lasts for about 10 months, so good times will be back. Nevertheless, they are necessary and you will experience a few recessions in your life, so better be prepared.”
by Olukayode Kolawole