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.”
Olukayode
Kolawole olukayode.kolawole@jumia.com
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