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Recession is one concept that incites fear and discomfort among Nigerians today, given the already terrible economic conditions in the country today. No one is to blame for this reaction due to its effects on their lives, businesses, and everyday transactions. The pandemic which occurred in 2020 impacted every country financially and economically, and it created a domino effect that businesses could not escape.

In tough economic conditions, it is expected that business owners and entrepreneurs get anxious about how recession affects their business, career, lifestyle, and so on. Even when the economy gets better and recession is avoided, engaging in healthy financial habits can only result in success.

You need to commence healthy budgeting habits to fortify your business for possible financial opportunities or emergencies. Before reviewing things you need to do to prepare for a recession, let’s have a brief overview of what happens in an economic downturn and how Migo can help you experience an easier life.

What Is an Economic Downturn (Recession)?

A recession is simply an economic downturn that persists over a given period which is characterized by increase in unemployment rates, and decline in trade activities. While different countries have a different time frame of consistent decline before a recession is declared, it takes a minimum of 8 months of drop in economic activities before recession is declared in Nigeria. This simply means Nigeria’s gross domestic product (GDP) experience a downturn which signifies a slower/negative economic growth.

After a few years of economic stability in Nigeria, the recent occurrence of the Covid-19 pandemic stimulated a downturn in economic activities which initiated another recession. Though these last couple of years have been in the red zone, Nigeria’s economy is not expected to experience a significant growth in the coming year.

Recession vs. Depression: Any Difference?

Many business owners and entrepreneurs easily make the mistake to use the word recession and depression interchangeably. The time frame is the major difference between these two words. While a recession only lasts for only a short while, a depression lasts for an extended period, usually over 5years.

A recession is merely a temporary negative turn in the economy, usually leading to a significant drop in employment rates, as well as production. This situation in turn affects the average household income and spending negatively. In a country affected by recession, the spending patterns experience a significant drop for up to 4 years. During recessions, most families will usually avoid expending large sums to make big purchases like buying a home or car.

A depression, however, describes a severe increase in unemployment rates and a halt in economic activities in a region. Depression in a region’s economy can potentially spread to surrounding countries, and can spread over other parts of the world. Sectors affected by depression includes the construction, world trade, and capital movements which may impact businesses for over 4 years. A popular example is the Great Depression which endured for over a decade of negative growth across all countries around the world.

Depending on the conditions of the economy, recession or depression can severely impact businesses, and lifestyle. A lack of knowledge of the extent and time which a depression or recession will endure usually stimulates anxiety among people. As a result, it is vital to be properly equipped to tackle financial emergencies like a recession or depression.

Typical Occurrences in a Recession

Personal and business spendings during a recession are usually limited for the most parts of a year. Within that period, spending cuts mean businesses inevitably have to cut down jobs, leading to increased unemployment.

Best Practices Prepare for a Recession

Planning your budget is an important practice individuals and entrepreneurs need to engage, regardless of the economic conditions. Investing in savings building, reassessing investments, and effectively managing debts provides important chances to stay on top of any kind of economic situation, whether positive or negative.

  1. Monthly Budget Reassessment

It is vital to keep tabs on your budget in order to have a good grasp on unnecessary expenses that need to go and others that need to be included. Are your expenses invested more on wants rather than needs? It is time to cut them off. It is time to invest only into things you need, to ensure you or your business does not suffer or lack things that will help your business grow.

  1. Prioritize Emergency Fund Savings

Once unimportant expenses have been eliminated, you should invest more funds towards your savings budget. In the worst case scenario, you should invest a minimum of 20% of your income or profit to savings, while another 30% can go to vital business needs. Once additional expenses have been cut off your expenses, do well to create a better automatic contribution to your emergency funds. When any emergencies arise, you will be able to comfortably offset them.

  1. Focus on Paying Off Loans

You can effectively track your loan account using the Migos App which provides users a detailed overview of your loans, interest rates, and so on. Individuals and Entrepreneurs need to prioritize settling their loans by investing a percentage of their income per month. This helps ease their loan repayment efforts and improve their overall business health.

  1. Assess Your Investments

One of the keys to success before or during a recession is staying clear of emotional money decisions. Whenever the economy should make a negative turn, it is recommended that you consider riding it out for any upswings. You can employ the services of a tested and trusted financial advisor prior to making a significant change concerning your investments.

  1. Source for Additional Earnings

Regardless of the economic situation of the country, recession or not, you should always consider creating or joining a project to make additional earnings. You can get great ideas by investing in online courses, books, blogs, or any other skills you may have mastered and have not put to use. Directing earnings from your side hustle to your savings account provides that financial cushion that will come in handy for the rainy days.

Mistakes to Avoid During a Recession

It is a common occurrence to see business owners and individuals panicking when a full-blown recession happens. This influences them to mistakes like putting their finances at risk, which does more evil than good. During an economic downturn, here are a few, usual mistakes you should avoid:

  • Anxiety: This is a condition that influences business owners to make poor financial decisions which can be significantly detrimental to the seamless operation of their business. Breathe and Always engage financial advisors whenever you want to make a financial decision due to a recession. They will help provide recommendations on steps to take and make you have a good perspective of current economic situation.
  • Taking more Loams: During recessions, banks and other financial institutions usually lower interest rates on loans in a bid to encourage businesses to stimulate the economy. However, taking on more debt during a recession is usually not the best decision. Rather, invest more into clearing existing debt.
  • Becoming a cosigner: Steer clear of ever becoming a cosigner in a situation where the primary debtor is unable to payoff their debt. The worst time to become a cosigner is during a recession due to unfavorable business conditions.
  • Lack of an emergency fund: Regardless of the existence of a recession, it is important to always have an emergency fund to take care of unexpected events. By creating an emergency fund that can care for more than a couple of months of your expenses, you will be able to comfortably care for any emergencies that may come up in the future.

Final Thoughts

Practicing excellent financial practices, whether during a recession or not, is important for a healthier financial life and business operation. They also ensure your business is well prepared to take advantage of opportunities when they come, especially in a recession. The recommended strategy to help expand your savings and prepare you for emergencies is by tracking your finances, creating emergency funds, and consistently be on search for opportunities to scale your business.

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Rand Merchant Bank (RMB) works with World Bank in closing first to market MIGA guaranteed short-term sovereign loan



Rand Merchant Bank (RMB) works with World Bank in closing first to market MIGA guaranteed short-term sovereign loan

Through collaboration with MIGA and the Minister of Economy and Finance for Côte d’Ivoire, RMB facilitated a short-term loan to support crucial trade related initiatives

Rand Merchant Bank (RMB) (, a division of FirstRand Bank Limited, has achieved a significant milestone in Africa by partnering with the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank, to extend short-term funding support on a trade-backed facility for the Republic of Côte d’Ivoire.

Through collaboration with  MIGA and the Minister of Economy and Finance for Côte d’Ivoire, RMB facilitated a short-term loan to support crucial trade related initiatives.

Said Ben Bechet from RMB’s Trade and Working Capital, Structured Solutions team: “While RMB has a proud history of supporting sovereigns on the continent with their funding and capital markets requirements, this is a first of its kind facility for an African sovereign. This transaction will pave the way for further MIGA guaranteed short-term facilities across the continent to assist with developmental initiatives, critical projects and the importation of crucial goods such as food, fertilizer and medicines alongside other resources.”

Clarine Stenfert, Global Trade Finance Head and Head of UK for MIGA, said: “Through deep collaboration with RMB and MIGA, the teams were able to successfully structure and execute a process we hope to scale and introduce to other African countries. MIGA’s Trade Finance Guarantee Framework seeks to support sovereigns or sub-sovereigns across emerging markets with their trade financing requirements, alleviating the current liquidity constraints imposed by the current high inflationary environment and the retreat from markets by private sector players.”

MIGA provides political risk insurance guarantees to private sectors and investors in a broad range of sectors in developing  economies. MIGA promotes foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance guarantees and credit enhancement to private sector investors and lenders.

“RMB’s strategy entails forging partnerships with insurance, guarantee and export credit agency providers to extend meaningful funding support to our clients across Africa. Collaboration with development financial institutions and multilaterals remains key to truly unlocking new opportunities to support our clients, concluded Bechet.”

Distributed by APO Group on behalf of Rand Merchant Bank.

About RMB:
Rand Merchant Bank (RMB) is a leading African corporate and investment bank (CIB) and part of the largest financial services group (by market capitalisation) in Africa – FirstRand Bank Limited (which is wholly owned by FirstRand Limited). We offer our clients innovative, value-added advisory, funding, trading, corporate banking, and principal investing solutions.
With a presence in 10 African countries, we have a significant footprint on the continent. We also have access to a network of retail banks, representative offices and branches across Africa, the UK, India and the US.

At RMB we are passionate about solving problems for our clients by asking the hard questions. We challenge accepted thinking. We analyse and seek solutions beyond the obvious. We are innovative in our thinking and turn challenges into opportunities, while delivering on Traditional values. Innovative ideas. Our ability to think differently, our collaborative spirit, our client-centric solutions and our belief that great minds don’t always have to think alike, is what sets us apart.

For more information visit:

About MIGA:
MIGA was created in 1988 as a member of the World Bank to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $76 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have generated more than 156,000 jobs in developing countries.

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Equatorial Guinea and Ghana Accede to the Establishment Agreement for Afreximbank’s Fund for Export Development in Africa (FEDA)



The Fund for Export Development in Africa (FEDA), the development impact-focused subsidiary of the African Export-Import Bank (Afreximbank) (, has announced that the Republic of Equatorial Guinea and the Republic of Ghana have recently signed the FEDA Establishment Agreement.

This important milestone is the result of several months of cooperation between Afreximbank, FEDA and government officials in Equatorial Guinea and Ghana.

As Afreximbank member states, Equatorial Guinea and Ghana have taken another step towards closer collaborations with FEDA by signing the FEDA Establishment Agreement. This milestone marks the countries’ support for Afreximbank’s efforts to extend FEDA’s impact investing objectives across the continent.

New memberships are crucial to broaden the scope of FEDA’s interventions and its mission of delivering long-term capital to African economies with a focus on industrialization, intra-African trade and value-added exports.

Professor Benedict Oramah, President of Afreximbank and Chairman of the Boards of both Afreximbank and FEDA, said: “We heartily welcome the signing of the FEDA Establishment Agreement by the Republic of Equatorial Guinea and the Republic of Ghana. The signing of the FEDA Establishment Agreement lays the groundwork for an enhanced and more effective cooperation with better access to the full range of interventions offered by Afreximbank and FEDA. This milestone builds on the solid partnership already established with both Equatorial Guinea and Ghana. The aim is to support transformative investments in these countries in the near future.”

About FEDA:
The Fund for Export Development in Africa (“FEDA”) is the impact investment subsidiary of Afreximbank set up to provide equity, quasi-equity, and debt capital to finance the multi-billion-dollar funding gap (particularly in equity) needed to transform the Trade sector in Africa. FEDA pursues a multi-sector investment strategy along the intra-African trade, value-added export development, and manufacturing value chain which includes financial services, technology, consumer and retail goods, manufacturing, transport & logistics, agribusiness, as well as ancillary trade enabling infrastructure such as industrial parks.

About Afreximbank:
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. For 30 years, the Bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialization and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank is setting up a US$10 billion Adjustment Fund to support countries to effectively participate in the AfCFTA. At the end of September 2023, Afreximbank’s total assets and guarantees stood at over US$33.4 billion, and its shareholder funds amounted to US$5.8 billion. The Bank disbursed more than US$104 billion between 2016 and 2023. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). Afreximbank has evolved into a group entity comprising the Bank, its impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure, (together, “the Group”). The Bank is headquartered in Cairo, Egypt.

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Financial Analysis: A Comprehensive Study of The Well-Being of A Country 




Financial Analysis: A Comprehensive Study of The Well-Being of A Country

Understanding the financial stability of a country requires a thorough understanding of financial analysis. In order to offer insights into the overall financial stability and overall wellness of the country, it entails evaluating a range of economic indicators, financial performance, and market movements.

In this article, we will delve into the fundamentals and importance of financial analysis in evaluating a country’s economic situation.


Ancient Beginnings:

The roots of financial analysis can be traced back thousands of years. The ancient Mesopotamians, Egyptians, and Greeks were among the pioneers of documenting financial transactions, creating basic records of assets and liabilities. These early attempts laid the groundwork for the concept of financial analysis through the study of financial statements and ledgers.

Medieval Europe:

During the Middle Ages, Europe witnessed the rise of merchant guilds and the emergence of double-entry bookkeeping. Italian mathematician and Franciscan friar, Luca Pacioli, is often credited with formalizing double-entry bookkeeping, publishing his seminal work “Summa de arithmetica, geometria, proportioni et proportionalita” in 1494. The concept of balancing debits and credits within financial records formed the basis for modern financial analysis techniques.

Industrial Revolution:

The Industrial Revolution in the 18th and 19th centuries revolutionized business and the need for financial analysis grew rapidly. As companies expanded and diversified, investors began demanding more comprehensive financial reports to assess the potential risks and returns of their investments. The birth of limited liability companies further accelerated the need for financial analysis, as shareholders sought transparency in the performance of their investments.

Modern Era:

The 20th century witnessed significant advancements in financial analysis techniques. The advent of electronic computing in the mid-1900s enabled the processing and analysis of vast amounts of financial data, leading to the development of sophisticated financial models and ratios.

The Great Depression of the 1930s laid the groundwork for modern financial analysis as regulators sought effective ways to prevent future economic crises. The establishment of the U.S. Securities and Exchange Commission (SEC) in 1934 brought about standardized reporting requirements, including the filing of audited financial statements. This increased transparency and standardized financial reporting provided analysts with a more accurate and consistent basis for their analysis.

The Rise of Quantitative Analysis:

In the latter half of the 20th century, the growth of computing power and the availability of large data sets propelled financial analysis into new territory. Quantitative analysis, utilizing statistical models and mathematical algorithms, started gaining prominence. Financial analysts began incorporating complex mathematical methods to assess investment opportunities, risk management, and portfolio optimization.

Modern Financial Tools:

With the advent of the internet and the digital age, financial analysis has become even more accessible and data-driven. Sophisticated software programs, data analytics tools, and artificial intelligence have revolutionized the way financial data is analyzed and interpreted. In recent years, technologies like machine learning have been leveraged to develop predictive models that can assess future trends and make accurate financial forecasts.


Financial analysis is the process of evaluating businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to warrant a monetary investment.

Financial analysis is a fundamental tool that allows organizations and individuals to assess the past, present, and future financial health of a business or investment. Through a systematic examination and interpretation of financial statements, ratios, and other key indicators, financial analysis helps in making informed decisions, optimizing resources, and improving overall financial performance. In this article, we will delve into the meaning of financial analysis, its prominent components, and its significance across various sectors.

Financial analysis involves scrutinizing financial data to evaluate the performance and profitability of an entity. It assists in quantifying the effectiveness of financial decisions, identifying trends, predicting future outcomes, and benchmarking against industry standards. By analyzing financial statements, investors, analysts, and other stakeholders gain valuable insights into the financial position, liquidity, solvency, and operational efficiency of an organization.


  1. Gross Domestic Product (GDP): GDP is a primary indicator used to gauge the economic performance of a nation. Financial analysts analyze GDP growth rates and its components, such as consumer spending, government expenditure, investments, and net exports. This analysis helps in determining the overall strength of the economy and identifying areas of potential growth.
  2. Trade and Balance of Payments: Trade analysis focuses on a country’s imports, exports, and balance of payments. Evaluating trade patterns helps identify sectors driving the country’s economic growth, trade imbalances, and potential risks to the economy from external factors such as changes in global demand or disruptions in supply chains.
  3. Inflation and Interest Rates: Analyzing inflation rates and interest rates provides insights into the stability of a country’s economy. High inflation erodes purchasing power, while high-interest rates can impact borrowing costs, affect consumer spending, and investment behavior. Financial analysts assess the impact of inflation and interest rates on an economy’s overall competitiveness and economic growth potential.
  4. Government Debt and Fiscal Policy: Analyzing a country’s government debt levels and fiscal policy is crucial in understanding its financial sustainability. A high level of government debt may lead to increased borrowing costs, reduced investor confidence, and potential risks to economic stability. Evaluating fiscal policies helps determine whether a country is managing its finances effectively and implementing sustainable economic growth strategies.
  5. Stock Market Performance: The stock market reflects investor sentiment and provides valuable insights into a country’s economic outlook. Analysts evaluate key stock market indices, such as the country’s primary exchange, sector-specific indices, and market capitalization trends. Monitoring stock market performance allows for an understanding of investor confidence, economic growth expectations, and potential risks to the financial system.
  6. Banking Sector and Financial Institutions: A robust banking sector is essential for economic stability. Financial analysts assess the health of the banking system by evaluating indicators such as non-performing loans, capital adequacy ratios, and the overall stability and soundness of financial institutions. Understanding the well-being of financial institutions helps gauge the potential risks to the overall economy, including credit availability, liquidity, and financial contagion.
  7. Regulatory Environment and Governance: The regulatory environment and governance play a critical role in attracting investment and fostering economic growth. Financial analysts assess the effectiveness of regulatory frameworks, transparency in financial transactions, and the overall credibility and efficiency of institutions responsible for enforcing regulations. Evaluating the regulatory environment aids in understanding potential risks and opportunities for sustainable economic development.


Financial analysis plays a vital role across various sectors, serving the following purposes:

  1. Evaluating Financial Performance: By conducting a comprehensive financial analysis, companies can assess their performance, profitability, and financial stability. This, in turn, helps in identifying areas for improvement, developing strategic plans, and making sound financial decisions.
  2. Assessing Investment Viability: Investors rely on financial analysis to evaluate the profitability and risks associated with potential investments. Through detailed scrutiny of financial data, investors can determine the financial health and growth prospects of a company, aiding in making informed investment decisions.
  3. Facilitating Lending Decisions: Financial institutions utilize financial analysis to assess the creditworthiness of loan applicants. By analyzing financial statements, evaluating ratios, and assessing the risk profile, lenders can ascertain the borrower’s ability to repay loans and make sound lending decisions.
  4. Supporting Strategic Decision-Making: Financial analysis aids in strategic decision-making, such as expansion, diversification, or mergers and acquisitions. Understanding a company’s financial position and performance provides a foundation for evaluating the feasibility and potential outcomes of such decisions.


Conducting a comprehensive financial analysis provides valuable insights into the economic landscape of a country. By evaluating indicators such as GDP, trade patterns, inflation rates, government debt, stock market performance, banking sector health, and regulatory environment, financial analysts can gauge the overall financial health, identify potential risks, and recommend strategies for sustainable economic growth. Accurate and timely financial analysis acts as a compass, guiding policymakers, investors, and businesses to make informed decisions and contribute to the overall prosperity of the nation.

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