Assuming someone wakes you up one morning and asks you to explain why you prefer dollars to other currencies, chances are you will smile broadly and answer thus: “because it’s money na. Who doesn’t like money?” But seriously, why do we like the dollar more than our very own naira?
For many years, the dollar has been the most preferred currency in the world. According to data obtained from the International Monetary Fund’s COFER, many countries of the world prefer to keep their external reserves in dollars. The data shows that out of the world’s leading currencies such as the Pound Sterling and the Euro, the dollar holds about 61.63% of all the allocated foreign reserves as of Q2 2019.
Why is this the case?
Well, it’s all about trust. The US currency is probably the only currency in the world that is not backed by any gold or silver reserves, as it’s often the case with other currencies. This has been the case for many years, partly due to the country’s hegemonic powers and strong economic might.
Financial expert Kalu Aja, explained yesterday that people around the world have developed a very strong confidence in the United States Government and its ability to repay debts as and when due. Thanks to the country’s strong economy, it is assumed that the US dollar will always be strong and valuable. And it has, indeed, been valuable for long and will probably continue to be for years to come.
The almighty US Dollar…
Still the preferred currency in the world.
Full faith and confidence in the US Government to repay debt, note Currency is simply paper, when you hold Dollar, you give your assets to the US government for "free" or a coupon if you hold bonds pic.twitter.com/PeehwipLne
— Kalu Aja (@FinPlanKaluAja1) October 2, 2019
Still on why the dollar is beloved
For people living in places like Nigeria where the inflation rate can often be stubbornly high, the dollar can also be used as a hedging tool. This can be achieved by simply buying more dollars and by so doing converting your naira to dollars. Doing this helps to ensure that the value of your savings is not eroded due to the devaluation effect of inflation.
So, do you love the dollar?
Of course, you do! The very fact that you can use this globally-recognised currency anywhere you go in the world is enough reason to love it.
Curfew: How to plan for a financial emergency
To ensure that you are prepared for a financial emergency, here are some basic decisions you have to take from the onset.
Life has its ways of generating unforeseen emergencies that leave us stranded. You cannot exactly prepare for some of these incidences despite your dedication. However, unlike other emergencies, a financial emergency is something you can actually plan for and work towards. Hence, the question of how to plan for a financial emergency is very vital.
The sudden declaration of curfew across several states in the country indicates that things could happen when you least expect. Traders who earn income from daily sales were the most affected; especially, the ones without laid down plans. Some white-collar workers too got a watered-down salary due to the situation, as the company made little or no profit.
However, to ensure that you are prepared for the next wave of sudden income blockage, some basic decisions you have to make from the onset are:
- Set up an emergency fund account: This is your most assured way of preparing for financial emergencies. It is non-negotiable. At every point, you should always have some money specially set aside for sorting bills in case of financial troubles. Although this seems like an obvious thing to do, in reality, most individuals do not have one. Financial experts recommend that the set-aside sum should be able to cater for at least 3 to 6 months of your basic expenses.
- Ensure you stay debt-free as much as possible: When financial difficulties kick in, what becomes a burden is the regular payment obligation you have to make. Remember, there are already basic non-negotiable expenses that you have to meet, and adding debts makes it much worse. If you are currently in debt, channel your resources to pay back in time. Also, focus on paying debts with the highest interest rate first.
- Slash down your expenses: As soon as the crisis kicks in, the first thing for you to do is to reevaluate. Run through your standard expenses and remove the wants. In a time like this, only the needs should stand. Keeping your expenses as low as possible would help you thrive better.
Having understood how to prepare for financial emergencies, it is also critical that you understand how to deal with them. Preparation and dealing with the situation itself are two different things.
Here are some tips on how you can deal with the current financial situation:
- Be critical about every financial decision: Financial debacles are mentally stressful and could cause you to make poor decisions. This is why, at every moment, you should think properly before making any money decisions. Practicing this would greatly help you steady the ship. Ask yourself what long-term consequences would this have on my credit and finance? If disastrous, you know what to do.
- Explore other potential streams of income: One of the fastest and easiest ways to navigate financial emergencies is to explore other streams of income. What else can you do to make extra income that would help deal with the present situation? In real-time, looking for a side hustle while going through financial difficulties is not easy, but if you can pull it off, it would help a great deal.
- Talk to a financial advisor: Lastly, you can always visit a financial advisor for a professional view on your current crisis. However, this may be a little tricky because you would have to pay for their services. But the right person can help you get your finances in check from the very first day, as opposed to you trying to put things together by yourself.
Emerging successfully from financial emergencies depends on how well you can prepare ahead, steady your ship, and navigate the terrain. The good news is that if you are one of those who planned early enough, you are less likely to stay long there than those who are unprepared. Remember that your goal should not be to learn how to deal with the difficulty as it comes, but rather focus on being prepared ahead.
Buhari approves free business name registration for 250,000 SMEs
President Buhari has approved free business name registration with the CAC for 250,000 businesses across the nation.
President Muhamadu Buhari has approved free business name registration with the Corporate Affairs Commission (CAC) for 250,000 businesses across the nation.
This was announced on Tuesday evening by the Media aide to the President, Bashir Ahmad.
Pres. @MBuhari has approved free business names’ registration for 250k MSMEs nationwide; according to the CAC, 6,606 names in each of the 34 states, Abuja will have 7,906, Lagos 9,084 & Kano 8,406.
— Bashir Ahmad (@BashirAhmaad) October 27, 2020
“President Buhari has approved free business names’ registration for 250k MSMEs nationwide; according to the CAC, 6,606 names in each of the 34 states, Abuja will have 7,906, Lagos 9,084 & Kano 8,406,” he tweeted.
What you should know
This comes after Nairametrics reported earlier this month that the CAC had announced it would begin registering companies within 48 hours, approve names the same day, and ensure 5-day completion for other post-incorporation services not available electronically.
Since the end of the #EndSARS protests, the Federal Government has been working on packages that are perceived as necessary for addressing the issues of large youth unemployment, which is viewed as a catalyst for the massive turnout during the protests.
The National Economic Council (NEC) has set up a committee to meet the needs and demands of Nigerian youths behind the #EndSARS protests. The head of the Committee is Vice President Yemi Osinbajo, with one of the frameworks being “A social security framework for the youths and Nigerians to deal with the problem of unemployment and poverty in the country.”
The free business registration coming this period will help businesses that can’t afford the registration fee to get their business registered and timely.
Oyo sets up N500 Million fund each for youth entrepreneurs, compensation for victims of police brutality
Governor Seyi Makinde plans to disburse N500 million fund to youth entrepreneurs in Oyo state.
Oyo State Government has directed that a N500 million MSME fund be set up to fund youth entrepreneurs in the State with bright business ideas