Christmas, a season to be merry and cheery, a season where loved ones are reunited appreciating one another. It also happens 8 h be a season that determines if businesses will end up in black or red as most financial year ends of businesses in Nigeria happen to fall under this season. In today’s world, Christmas has been commercialized as most businesses especially retailers find ways to increase their revenue during the holiday by adopting creative marketing strategies surrounding the idea of Christmas season in order to sell their products and services as most consumers tend to buy more during this period.

The case isn’t different in Nigeria, as evidence shows that consumer spending goes up during this season. According to trading economics, in 2014, Q4 consumer spending increased to approximately N12.3 trillion from N11.4 trillion. Same applies for 2014, where the consumer spending increased in Q4 to N12.1 trillion from N11.7 trillion in Q3. It is expected that consumer spending for 2016 Q4 will be N9trillion (trading Economics) a 25% decline from previous years spending in Q4, which leaves the question, is Christmas at risk in Nigeria?

A direct link to this estimated drop in Christmas spending can be traced to the current economic recession in Nigeria, a slump the nation has not witnessed in the last 25 years. In the build up to the season there has been evidence of “cold pockets” amongst the average Nigerian due to the economic recession. The recession as we all know by now is as a result of the volatile oil price and reduction in oil production.

The crude oil exports as seen as above serves as a financier for the country budget and a major provider of foreign exchange earnings.
Also, Nigeria’s over-dependence on foreign products and crude oil for exports has seen value of the Naira fall by 85% so far this year making it the worst performing currency in the continent. With the current global price of crude oil, Nigeria has been unable to fully implement the 2016 budget which in turn created a ripple effect that lead to the current recession amongst other factors.

The anticipated drop in consumer spending in Q4 as stated by trading economies implies that firms’ most especially small businesses will have cash flow constraints this season. As witnessed during a period of recession, customers demand for products and services and delayed payments will lead to a reduced cash flow. This is a very peculiar case in the business environment in Nigeria this season.

Ever since Q1 of 2016, we have seen inflation increase to 18.3%. This has seen prices increase by more than 100% leaving manufacturers with a high cost of production creating a ripple effect that has led to a spiral increase in staff redundancy, as seen unemployment rate at Q4 is currently at 13.3%. Most businesses have been reviewing their corporate strategy towards ensuring business survival: Erisco Foods recently opted to stop operations in Nigeria and move to a conducive business environment in other parts of Africa.

The toils of the recession has also affected the stability of most families and individuals. Individuals at this season are rather struggling to find a replacement job or an alternative source of living due to the staff redundancy created by the recession. It has unanimously lead to lifestyle change among the populace due to the drastic fall in the purchasing power of most families caused by stagflation. The average citizen are cutting back on extras, mostly on entertainment and extracurricular expenses. The recent suspension of the new data price regime which was pushed for by NCC (Nigeria Communications Commission) is a welcomed relief among the populace this season considering it would have further increased the living cost.

All indicators are pointing towards a quiet Christmas amongst the general populace. With a negative GDP growth, it can be said that the current recession has impacted on almost everyone directly or indirectly regardless of income class. However the will and survival instinct of an average Nigerian, the Christmas will still be celebrated with most people looking towards creating an alternative source of income pending when the Nigerian government along with the CBN implement an economic recovery plan to ensure the nation returns to positive growth.

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