Nigeria is right about neck-deep in a pit of recession and strangled in a hard to get out of stagflation.
Interest rates are on the rise, jobs are being lost and the Federal government is broke. It’s a tough ordeal for everyone including policy makers and the government. Even the rich are feeling the heat as they see the value of their investments plummet nearly every day.
Some people are however between a rock and a hard place and they probably do not know it yet. We believe that the earlier you find out or understand how precarious your situation is, the better for you. You can start to fix a bad situation by first acknowledging how bad it is and what can be done to remedy it.
Who then could be financially screwed and why is this so? Here is what we think…
You don’t have savings or investments
Earning a kobo in this tough economy has never been harder. People who even earn are struggling to keep up with their financial obligation as Inflation keeps eating away any ounce of purchasing power that they get. Nevertheless, those who have savings or investments have a fall back option. With savings there is cash you can fall back to when you need to augment income in times of urgent need. Investments on the other hand helps you guard against Inflation while earning you a decent return to get through rising financial obligations. If you don’t have savings or investments in this economy, then consider doing so or you might get screwed.
You have a lot of uncontrollable debts
Debts are a necessary evil which we all need to fund our insatiable lifestyles or business interests. The downside of debts is that during a recession, its one burden that can quickly sink you. People in debts are so screwed they barely have enough of their income to cater for their immediate need. This is why they end up defaulting on the debts leading into even more debts and mental torture. If you have uncontrollable debts, then you are quite screwed.
You job is easily indispensable
Sure they say no one is indispensable but not everyone is equally dispensable. Some jobs are far more important than others which makes evaluating your current role at work very important. If you currently have a job role accountability that is not critical to the financial or commercial success of your workplace, then you should be indeed worried and need to do something about it. Recessions are predominant with job losses and employers like to use that opportunity to weed of “chaff”. You don’t want to be a chaff my friend or you’re screwed.
You have no professional qualifications or second degree
These days a foreign university degree is no longer enough to get you a job or even secure the one that you have. Master’s degree is like “pure water” and are also not regarded as much as they used to. One academic qualification that’s relevant is a professional certification. Try to search for a professional qualification within your chosen field and earn it. See it has a hedge against potential job losses.
You have no pensions
Not a lot of people believe in pensions let alone contributing into a fund. Pension funds are designed to support you in the rainy days when you are out of jobs or have been forcefully retired. It’s not revered in Nigeria because everyone just wants to spend the money they earn today than save it for the rainy day tomorrow. In Nigeria, a salary earner is entitled to about 25% of his pension when he is sacked or retired. That can be a windfall in the time of need. Not having it is setting yourself up for being screwed.
You have no insurance
Insurance is not also popular in Nigeria. Some don’t even bother with comprehensive vehicle insurance that you’d think is a no brainer. If you had insurance products such as life insurance, vehicle insurance, property insurance etc. then that’s one major risk hedged for you. It’s a chunk taken out of your salary or income periodically but the upsides are huge when trouble comes your way.
You have a fraud case
This is an officially screwed situation. Bring embroiled in a financial scam or fraud sets you up not just for jail time but you could be in for some mental torture. If you do not have the temperament or resolve to withstand the pressure, then this could be a potentially unpalatable situation for you and your family.
You have a recurrent forex obligation but have no forex inflow
Not in this economy that we all know is not nice to the Naira. Having a forex obligation can be a pain in the butt especially if you do not have a commensurate forex income. The implication is that you keep getting entangled in a wave of forex deprivation and capital erosion. A friend recently had to sell off his land just to be able to afford ticket and school fees for his kid. He admits he is getting screwed and needs to address his funding mix asap.
You owe your children’s school fees, landlord etc.
Some people are currently so broke, they can’t even afford their children’s school fees. And we are not talking about school fees abroad but locally. That’s one of the highest form of pressure you can ever face as a parent. The other major pressure you can face is not having money when your rent is due. Landlords are not smiling as they also face the same economic pressure that you are under.
You only have one source of income
Depending on how small or huge your income is, you could be potentially screwed up by having just one source of income. Those who earn fat salaries relative to their expenses can cope but not when your salary is thin and you have increasing expenses. It’s either you cut down or you’re screwed.
You are a bread-winner for your extended family
As Africans we all love to be our brother’s keepers. Unfortunately, the world is not so sympathetic to people who are perpetual brother’s keepers. In an economy where nearly everyone is under financial strain, the pressure can be quite huge if you have a lot of people depend on you for survival. A man was once checked into a hospital for high blood pressure. When he was asked why he was under pressure, he said it was because he didn’t have enough money to take care of his parents, immediate Family and relatives who depend on him for handouts. That’s screwed up isn’t it?