By Abdulkabir Olatunji
The news broke last week that Nigeria has fallen into recession for the second time in 4 years after the economy contracted by 3.6% in the third quarter of 2020 following a 6.1% contraction in the second quarter of the year largely due to a lack of economic activity during the covid-19 lockdown imposed by government to reduce the spread of the coronavirus and a sharp drop in global oil price during this period – two consecutive quarters of negative growth mean a recession. This is bad news because a recession affects almost everyone negatively in one way or the other.
However, the reaction and the comments on this news by some Nigerians expose a lack of understanding of the issues related to a recession. First, when a recession occurs, it is not every sector of the economy that goes into a decline. For example, while I might not have the figures, the Covid-19 induced lockdown earlier this year created a boom in the delivery business, the same can be said of agency banking with banks and mobile money operators scrambling to gain or increase market share, the market for hand sanitizers and facemasks also saw a boom, same for increased use of data by telecom subscribers as more people now work remotely and rely on having virtual meetings on platforms like Zoom and Google Meet.
The key point here is that a recession does not necessarily have to mean economic hardship for you – this might just be your choice. People are still going to make money in this recession; many will experience growth in their business, just as others will start businesses that will eventually become successful in the future. The economy is not monolithic and for as long as the country does not fall into depression or a sustained cataclysmic event, there is a lot of money to be made for those that choose to see opportunities instead of problems.
While there are many who because they want to gain real or perceived political capital from the news of a recession will whine and complain endlessly about how things are in Nigeria, you have the choice to reject such messages as your reality. What you should do instead is identify viable business opportunities within the economy and seek to maximize your business returns. Even under a recession, the Nigerian economy has so much value that you cannot effectively capture as a single individual or corporate entity. The market open to you is still huge. So, within this economy in recession, individuals and business entities will still make millions and billions naira. Let those saddled with responsibility of managing the economy work-out how to get Nigeria out of recession. You owe yourself and probably your family a duty to ensure that your economic circumstance does not suffer a decline whether the economy is in recession or achieving fast economic growth. Your economic well-being should always be of paramount interest to you.
Yes, Nigeria‘s economy is in a recession, it Is your choice whether or not to join the recession train. So, where are the bright spots in a Nigerian economy experiencing a recession during a global pandemic? Here are my suggestions few suggestions:
Suggested Business Ideas to Pursue in Nigeria During Recession
- Food Business
- Digital Marketing and e-Commerce
- Health Sector
- Online Education and Training
- Transportation and Logistics
- Food Business
Food business will always be profitable, people need to feed to stay alive –recession or no recession. The coronavirus lockdown and heavy flooding have contributed to high food inflation. However, people are still investing in agriculture and as long as you are outgoing and willing to make inquiries and contacts, you can always get foodstuff at relatively low prices and sell at a profit. You need to sort out your supply chain and delivery channel to your customers.
Digital Marketing and e-Commerce
People are moving online to buy and sell in large numbers, government is encouraging people to stay at home and travel less if they can. All of this means smart sellers have moved online or expanded their footprint under what has been termed the “new normal”. So, find any item(s) you can supply consistently, go online to identify the best platforms you can reach your target market. It takes time to build a following and to achieve conversions. Be quick to learn, identify what works and build on it, drop what does not work. Again, your supply chain and delivery channels are vital for success.
e-Commerce expands on digital marketing and instead of relying on social media platforms like WhatsApp, Instagram, Facebook and Twitter for sales; you can rely on established e-commerce platforms like Jumia, Konga and Jiji to sell your products. Alternatively, if you have enough capital, you can create your own online store integrate payments, inventory management and logistics into it, have some smart marketing and try to grow your own dedicated market. There is hardly a better time to try than now even if success is not guaranteed.
Health Sector
The health sector is currently overstretched in many parts of the world as healthcare workers battle the covid-19 pandemic while still having to cope with other health challenges that you would expect to manage before the pandemic. People are not too confident about visiting hospitals these days and things like online consultations, prescriptions and home service options might appeal to more people than would have been the case before this current pandemic. The manufacture and sale of hand sanitizers, face masks and disinfectants is something that can be expected to continue being profitable in the near future and longer term, people are becoming more hygiene and health conscious. Before, the spread of the coronavirus this year, many pharmacies were springing up in major cities in Nigeria to meet ever-growing demand. This trend indicates that health-related businesses might be profitable even in a recession after all, “health is wealth”.
Online Education and Training
Like everything else moving online, education is also making the change. Many parents were forced earlier in the year to purchase computers, tablets or any other device that would help their children get access to the online classes established by some private schools during the covid-19 lockdown. Online learning platforms like uLesson, 9ija Kids and ClassNotes show that e-learning can be successful in Nigeria, while the like likes of Coursera, Udemy and even Google are seeing Nigerians picking up certifications to improve their skills and employability. Building a simple, easy-to-use online education platform is something that is likely to gain traction especially if it is inexpensive and delivers the quality education that people crave.
Transportation and Logistics
While people are reducing their movement during this covid-19 pandemic, a lot of raw materials, food and products are being transported. The demand for transporters and logistics solutions is on the increase. The more people that move online to sell physical products, the more people need delivery bikes, moving vans and even trucks. This business can be started small scale with a single 200cc or above motorcycle, registration and some basic marketing. As your clientele increases you can expand. If you have larger capital you can start bigger but should take caution to ensure that you have a viable market for these services.
To round this off, take note that some people will make money, some will lose it regardless of the state of the economy in Nigeria. It is up to you to decide in what category you want to fall into regardless of what other people say. I choose to make money – what about you?
