How We Can Survive Another Recession 

Recent World Bank report has shown that Nigeria’s economy has plunged into recession for the second time in five years.
From 6.0 percent projected, the report shows Nigeria recording a second consecutive negative growth, contracting by 3.62% in the third quarter of 2020.
This week’s edition of “My Business” looks at the effects of the recession on businesses and how the country can work its way out of this terrible decline in economic activities.
Our senior correspondent, Lilian Peters, had a chat with some financial experts and business men in Port Harcourt, who bared their minds on the current situation. Read on.

A chartered accountant and the Managing Consultant of S.O Igwe & Co., Ambassador Silas Igwe, said the major factor that led Nigerian economy to contract was the fall in the price of oil, which is the major source of revenue of the nation.
Igwe who operates a professional auditing and tax management firm noted that oil “in fact generates about 80 percent of our country’s revenue”.
He also said that the effects of COVID-19 made many establishments to shut down operations, thereby denying them cash inflow.
This, he said, also impacted on the country at large, reducing the revenue the country would have generated.
“The truth is that the pandemic affected the economy of many countries including the developed countries and therefore threw them into recession. Some of the affected countries are: Britain, France, Italy, Canada, Germany, United States of America. Britain was the worst hit because their economy contracted by 20.4 percent.
“The recession could not have been prevented by the Nigerian government due to the natural causes but the right action by government can chat a way out.
“Government should adopt bail out to some selected and essential companies. Grant soft loans to the real sectors of the economy, empower households to enable them spend more, thereby stimulating the economy, as well as tackle corruption headlong”, he said.
Amb. Igwe further noted that the way forward for big and small companies would be “diversification of goods and services tendered so as to increase sources of revenue, adopt a competitive pricing policy in their businesses and a good customer relationships.
“There is also the need to reduce cost as much as possible, including overhead cost. Adopt marginal costing approach”.

The Managing Director, Integrated Oil Shore Services Nigerian Limited, Mr Chijioke Samuel Ekeke, in his own view, said the effects of the recession  on businesses would be worse than imagined.
“I do not even know when we came out from the first recession. We are confused and business operations had declined due to scarcity of dollar and bit by bit remittance.
“To remit money for purchased tools and equipment, the bank will say only $10 would be paid at a time, even with N470 per dollar”, he said.
Ekeke urged the present administration in the country to fulfill its promises to the nation.
He said the Federal Government’s assurance that the country would exit recession by the first quarter of 2021 was not sacrosanct, explaining that the situation on ground has many unanswered questions.
“The only way forward is for the government to be committed to the masses and work with experts who know what to do in different situations”, he said.

The Managing Director, Isumana Nigerian Limited, Amb. Umana Idongesit Sunday, said the recession affected import, export and currency flow in the country.
Sunday, whose company deals on science and hospital equipments, noted that businesses were passing through harsh economic situation which in turn affected the country’s revenue generation.
He noted that, “Businesses are facing serious challenges under the present economic recession in the country caused by Coronavirus and other unmanageable issues.
“No currency flow, no foreign reserve, to boost the economy and no free flow of businesses.
“We import at a very high cost, supply at a high cost to the hospitals who in turn demand the recovery of their money from their patients”.
He commended the Federal Government’s initiative in the area of agriculture, especially the production and packaging of local rice to compete with foreign ones, he said more needs to be done in the area of infrastructural development and power supply.
“Without good road network and power supply, the cost of finished products would still be high. The rail system needs to work and the price of fuel has to come down to reduce transportation”, he said.
For a quick recovery from recession, Sunday urged the government to stimulate the informal sector to generate more jobs, while interest free loans are given to boost small and medium enterprises.
“Government should put round pegs in round holes. The use of experts in their respective fields would go a long way in helping us exit the situation we find ourselves.
“If government would leave party sentiment, tribalism, and pick qualified economic experts, then our recovery would be near”, he added.