By Joy Ojakovo FCCA
As Nigeria celebrates its 65th anniversary of independence, the country continues to face significant economic challenges that impact the daily lives of its citizens. Rising inflation, high unemployment rates, and currency fluctuations have made it essential for Nigerians to adopt effective personal financial planning strategies to manage their finances.
I recall vividly the moment I confronted the stark realities of Nigeria’s economy. A close friend, an executive at a leading company, faced sudden job loss due to corporate restructuring, a common fate in today’s unpredictable market. This event resonated deeply with me, as I too was experiencing the strain of dwindling savings and rising costs.
The impact of job loss extends far beyond the individual; it reverberates through families and communities. For my friend, the immediate consequences were dire. With no income, he struggled to meet his family’s basic needs, including housing, education, and healthcare. The weight of financial insecurity placed immense stress on his relationships, leading to anxiety and tension within the household. The question shifted from how to save for the future to how to secure daily meals and manage escalating bills.
This experience underscored the need for effective financial planning and resilience in the face of economic adversity. It highlighted the importance of community support, adaptability, and the pursuit of alternative income streams. As families navigate these turbulent times, the ability to make informed financial decisions becomes paramount in securing a stable future.
Understanding the Economic Challenges
Nigeria’s economic landscape is characterized by high inflation rates, which have driven up the prices of essential goods and services, making it difficult for low-income households to afford necessities. The removal of petrol subsidies in 2023 has also had a ripple effect on transportation and energy costs, further exacerbating the financial burden on citizens.
Personal Financial Planning Strategies
To navigate these economic challenges, Nigerians can adopt the following personal financial planning strategies:
- Create a Flexible Budget: Develop a budget that accounts for fluctuating income and expenses andregularly review and adjust it to accommodate increasing costs.
- Prioritize Expenses: Identify needs and wants andallocate resources accordingly to avoid overspending.
- Build an Emergency Fund: Save 3-6 months’ worth of living expenses in an easily accessible savings fund to provide a safety net during financial emergencies.
- Manage Debt: Prioritize high-interest debt repayment, avoid new debt, and consider debt consolidation or renegotiation with creditors.
- Diversify Income Sources: Explore alternative revenue streams, such as starting a side business or investing in stable assets, to reduce financial risk.
Government Empowerment Programs
The Nigerian government has introduced various empowerment programs to address unemployment, poverty, and social issues, particularly among the youth. These programs aim to equip individuals with skills, knowledge, and resources to foster self-reliance and economic growth.
➢ N-Power Program: A federal government initiative to reduce youth unemployment by providing training in areas like agriculture, health, teaching, and technology.
➢ Labour Employment and Empowerment Program(LEEP): Designed to create opportunities, equip Nigerians with skills, and unlock pathways to sustainable employment and entrepreneurship.
➢ Skill-Up Artisans (SUPA) Program: A joint initiative of the Federal Government and Industrial Training Fund (ITF) to train and empower young artisans through tech-enabled skills.
➢ SMEDAN Agribusiness Empowerment Development Fund: Provides support and resources to individuals and organizations involved in agricultural production, processing, and marketing.
Benefits of Empowerment Programs
➢ Monthly Stipends: Participants receive financial support to sustain themselves during training or entrepreneurship development.
➢ Hands-on Training: Practical skills development through training and mentorship.
➢ Access to Funding: Programs provide access to grants, loans, or funding to support business growth.
➢ Networking Opportunities: Participants can connect with industry experts, mentors, and peers, expanding their professional network.
Nigeria’s economic challenges require Nigerians to be proactive and adaptable in managing their finances. By adopting effective personal financial planning strategies, investing in financial literacy, and leveraging government empowerment programs, citizens can navigate the current economic landscape and build a more stable financial future.
In reflecting on Nigeria’s independence, it is essential to remember that the journey toward a prosperous and equitable nation is ongoing. The sacrifices made by our forebears serve as a reminder of the resilience and determination needed to overcome current challenges. As we commemorate this significant milestone, let us draw inspiration from our shared history and commit to taking control of our finances. By adopting prudent budgeting practices and exploring diverse income opportunities, we can better weather financial crises during and after the celebrations. This proactive approach will not only empower individuals and families but also contribute to a more resilient economy, ensuring that the ideals of independence are realized for generations to come.
I am a finance expert and pension industry executive with over 20 years of experience leading strategic transformation, regulatory compliance, and operational excellence across Nigeria’s financial services sector. Currently, I serve as the Managing Director/CEO of Progress Trust CPFA Limited, where I oversee the administration and management of over N140billion portfolio of retirement plans for employees of Nigerian Breweries.
