Let’s talk economics

Eyin temi, let’s talk about something that affects all of us: the economy.

Shebi you all have seen how inflation is ravaging global economies right now? Toh, na so we see am o. It’s important to arm yourself with knowledge so you can know how to navigate these economic headwinds. Biko disclaimer sha o: I am not a financial adviser, neither am I a fiduciary. Anything I say is for information, education and entertainment purposes only. Do your own due diligence or seek expert financial advice when making investment decisions.

Okay, that said, I like money and I pay close attention to the bag. Inflation affects the bag so I am paying very close attention to it. In Canada, it reached a 31 year high of 6.8% in May. Same period in the US was 8.6%. In the UK, 9.1%. Median in the EU for May was 8.1%. In short, the thing touch everywhere. Naija was about 17%. E reach to write am separately :-).

Anyway, what does this mean for your everyday life? It means the cost of everyday items will rise. The higher the inflation, the more expensive things become. It means less money in circulation as central banks around the world start mopping up excess liquidity to combat inflation. It means tension in the job market as companies try to protect their balance sheets from reduced revenues by cutting overhead costs etc. It means a lot of things but the important thing is how can one best navigate the situation. That’s the koko.

Okay, let me start from my favourite people, young undergrads/ fresh graduates. This is not the time to be following passion, no go follow motivational speaker enter gutter o. Unless your passion is in a recession-proof industry like healthcare, better start recalibrating fast! Abi, have you ever heard that the economy is so bad that nurses and doctors are being laid off? Many companies are already laying off, in many industries but not healthcare, anywhere in the world. There are many job pathways in healthcare. There are also some other industries that are pretty well insulated from economic recessions. Biko find them and enter there. When this wave is over, you can start to explore passion then. Na bird wey don chop dey sing o.

If you are a more established professional, begin to analyse your skills critically. Especially if you’re not in a recession-proof industry or not an essential worker. Start to upskill strategically. Again, leave passion on one side and research what skills are essential in this period. If it means pivoting into another industry, biko no even think am twice. Knowledge is a super power, learn, learn, learn!

Whichever phase in life you’re in, this is not the time to be taking on debt. Pay off any debt you are carrying as much as you can now. Things will get more expensive. From commodities to even cost of borrowing. Things will be expensive on a number of fronts because the world is more connected than we care to admit. You see this Russia- Ukraine war? It affects everyone in all parts of the world. Ukraine is a major wheat producer. With this war now, they have missed the planting season. Subsequently there will be practically nothing to harvest when harvest season comes. So if you think bread is expensive now, wait till next year.

All of us are already feeling the effects of the war on oil and gas. O wan pa! The impact will be even more pronounced in Naija because we import practically everything we consume. So there’s no sugar coating it; nkan ma won si o. So please move away from gbese as much as you can right now.

If you’re a business owner, the gbese advice is especially poignant for you. This is may not be the best time to embark on a capital project. You should be moving away from major expenditure in your business right now and tightening up your purse to weather this period. Inflation means reduced consumer spending. Reduced consumer spending means reduced business revenue. Shey you get the drift?

In Naija, the issue is a conflated one. There’s the inflation wind from ‘the abroad’ blowing in as increased cost of imports on every imported thing we consume. But there’s also the disruption in domestic food supply due to the aggravated security conditions in the food basket states. Shebi when farmers were being attacked and killed in farmlands across the country, we were speaking English? No wahala na, e don be laidis. Now nobody wants to go and farm again. The one we are importing sef don cost. Everybody will be alright.

But sha, be aware of these things and adjust your household purses accordingly. Ire o!