Nigerians must curb ostentatious lifestyles to reduce recession pressure – Experts

Nigerians must curb ostentatious lifestyles to reduce recession pressure – Experts


Going by expert forecast that the economic recession may not end anytime soon, observers had expected that the just concluded Eid-el-Kabir celebration will be a low key event in the country. However, while prices of rams and food items skyrocketed, celebrants made steady purchases of the items, a development economic experts said may further pull the standard of living of Nigerians in the next few months.
According to findings, not a few Nigerians, especially the ones at the bottom of the pyramid, borrowed money from friends and colleagues to buy rams and even cows to celebrate the most popular Islamic festival, notwithstanding their respective battle to survive recession.
Aside from the fact that such people are said to be living an unsustainable lifestyle, economic experts told The Point that the development may put many under intense social pressure to live way beyond their means and that would deepen the rate at which recession affects individuals and the nation at large.

Several economic experts, in separate interviews with The Point, however, warned Nigerians should be prepared for a worse financial meltdown by the end of third quarter and the fourth quarter.
A fellow of the Institute of Chartered Economists of Nigeria, Alh. Kehinde Ologun, warned that the state of the economy of the nation does not warrant citizens to be neck deep in credit, given that hundreds of employers and state governments have either slashed salaries of their employees or owe salaries running into months.
“It is understandable that the inability to buy ram might make one feel inferior but it can be more devastating when after the festival, you find it difficult to pay school fees, renew rent and meet other domestic expenses. Whether we like it or not, borrowing to finance ostentatious lifestyle we cannot afford, drops the standard of living by about 40 per cent or more.
“It is better to plan and save for festivals. And sticking to budget will help you cover such expenses without having to borrow. If you had to borrow to do these things, you may be spending more than you are making and that would make you fall deeper into debts,” he explained.untitledThe managing partner, Woodland Capital limited, Dr. Bayo Ajayi, described going into debt to celebrate festivals or settle some avoidable expenses as taking steps backward. According to him, Nigerians often feel they can afford a new debt, even when the handwriting is on the wall that there is financial crisis.
He observed that several Nigerian parents also borrow to keep their children in private schools they cannot afford with their regular income. “Some friends had approached me to lend them money for some festivals or to pay school fees of wards, but they are always offended when I advise them to live within their means.
“The simple truth is that there’s no such thing as being able to afford debt. All it does is spread your budget thinner, even when you’re earning more. When you factor in interest rates, the picture becomes even bleaker. The Holy books did not support such financial recklessness because it is not compulsory to celebrate festivals with rams or to send your wards to the best schools. Open savings accounts for things you eventually want, such as school fees or festivals. This can help you put together a larger down payment when the time comes,” he advised.
Ajayi added that the obsession with material goods as a means of proving wealth and success is one of the reasons the economy is recessed.
He said, “We want our neighbours and friends to see our prosperity, so we use pricey possessions or children’s schools to flaunt. If that is done, you just might find yourself the object of envy when others see how easily you’re able to retire, send your kids to college, travel, and otherwise enjoy life while they’re still paying off debt into their later years.”

Some of the executives of the Ram Sellers Association told The Point that the farmers did not feel much hardship, especially before and during the Salah festival. Despite the recession, they said that the return they made on their investments rose from 40 per cent to 60 per cent. Due to the high demand for ram during the period of Islamic festivals, they were able to recoup additional expenses made while transporting their cattle from Kano State, which they claimed had risen by over 50 per cent.
Although, the price of rams ranges between N40, 000 and N120, 000 depending on size and location of the market, the General Secretary, Kara RSA, Ogun State, Mr. Mohammed Sanni, explained that the norm is that, shortly before Salah, cattle farmers and traders from the northern parts of Nigeria, take rams, cows and goats to other parts of the country, where there is no easy access to herdsmen, to sell their animals.
According to him, they seize the opportunity to enrich themselves because the seasonal nature of the business makes it even more lucrative. “The average price of a ram for consumers during this season is N40, 000. When I multiply this by the number of rams I sold, I made about N1 million and I invested about N600, 000 on the business. I made N400, 000 as profit compared to last year when I made about N200, 000 as profit margin.
The periodic boom attracted Mr. Azeez Sanusi to the business and he has not regretted since 2012. The cattle trader around Oke Aje market, Ijebu Ode, Ogun State, told The Point that he made enough money to sustain and to invest in other businesses from the Islamic celebration.
“In order to make more profit, I travelled to some northern states like Jigawa, Sokoto, Kano or Kaduna, where there are majority of herdsmen, to buy rams in large quantities and at cheaper rates so I can make more profit. The business of selling rams during Muslim festivals is very lucrative and that is why we cannot run into loss irrespective of the state of the economy because Nigerians can go to any level to celebrate festivals.”