The world economy as a whole and those of nations of the world, have seen a downward plunge, as a result of the coronavirus pandemic.
This is seen evidently so, with news of devaluation of local currencies, drop in export prices, values and rates, rise in inflation, cut in budgets, fall in share prices of companies and an alarming rate of unemployment, as threatened and struggling businesses, adopt retrenchment, as a means of cutting costs.
Governments, all over the world, are faced with the great task of managing economies that are, dangerously, swerving in the direction of a recession, while trying to contain the pandemic and keep the country running, simultaneously.
For countries, whose sole source of income is, majorly, the production and export of one major product, or commodity, this could be challenging. This becomes more precarious, when the price of such commodity is on the downward trend, in the international market.
Nigeria, for instance, has crude oil, as her major export. The recent drop in oil prices worldwide, has forced oil producing nations into a frenzy.
The Organation of Petrolen Exporting Countries, OPEC, had to put in some control measures, by reducing the daily production from member states, to keep the price per barrel, from further nose-diving
With a drop in prices and a fall in demand of these products, due to partial lockdown and financial constraints, across the globe, revenues accruable to these countries, have shrunk, tremendously.
To meet up with budgets, leaders are resorting to borrowing and some other aggressive economical decisions.
The economic future is not too sure, but if there is a way out, it is called diversification.
Diversification, in simple terms means, exploring other options, such that, varieties of goods and services are available, for local consumption and export.
It is, a diplomatic way of nations, of “not putting their eggs of national income, in one basket”.
For a nation like Nigeria, below are few areas of production, that will thrive, not minding a coming recession that, we might like to consider.
Whatever the coming days bring, investors in agriculture, will never go out of business. It is an indisputable fact that, for local consumption and international market, food, is an essential and has no substitute.
In the light of this, agricultural products, will continue to remain on demand, as food and raw materials for industries. Investing in agriculture, will not only help reduce food import, but also, provide a variety of raw materials, for local industries and export.
This is, another major area of imports, for developing countries. Here, comes the time to encourage development of indigenous technology.
We must learn to create and develop the technology needed for industrial production, likewise, locally producing our consumables.
This way, rather than depending on other countries for products, like cars, phones, electronics, etc., we can produce them, not only to meet the demands of our local consumption, but to complement our exports.
The greatest wealth of a nation, is not in the quantity of its natural resources, or raw materials, but in the volume of its sound minds and the brilliance of its human resources and manpower.
Investing in education, skill acquisition and vocational trainings, research, entrepreneur development and empowerment programs, for small scale businesses, etc., will boost the productive potentials, of the populace.
This will birth ideas, relevant for national development, creation of local industries and businesses, and foster economic growth, respectively.
Diversification is beneficial at these times. It will help in reversing the effects of post pandemic recession in the following ways;
Creation of employment opportunities
Exploring other options, in the production of varieties, will imply creation of job opportunities, to tackle issues of unemployment.
With more jobs available and unemployment reduced, crime rate will fall.
Local production of imported goods, will in a drop in prices of such products, for local consumption, since extra costs, like import duties and taxes, are not incurred.
Start-up businesses will enjoy a stable environment for growth. There are going to be fewer competitors since there is a variety of products to be produced.
It is hoped that our nation will see the light at the end of the pandemic’s tunnel and also ensure diversification. Bearing this in mind, let us stay safe, for health indeed, is wealth.
Featured Image: mnacritique.mergersindia
Don’t miss important articles during the week. Subscribe to cfamedia weekly digest for updates.