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Why Nigerians Need To Get Out Of Bad Debts To Survive Financial Challenges In 2023 – Report

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BREAKING: Worries As Nigeria’s Debt Stock Hits N49.8trn – DMO Confirms
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A publication, Money Africa has said that Nigerians need to get out of bad debts to survive the financial challenges in 2023.

It noted that the residual effect of the pandemic, Russian Ukraine war and high inflation had affected the finances of Nigerians and led to loaning from every means possible to survive.

In a report titled ‘2023 optimism: Making the best of a potentially challenging year’, it said that in Nigeria, the elections were going to be pivotal to how the year would turn out.

Regardless, the problem of slow growth, high inflation and high unemployment would persist, it stated.

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These problems could be worsened by the phasing out of petrol subsidies and a sustained depreciation of the currency unless oil exports recover strongly.

While advising Nigeria to avoid debts, it stated, “There are two types of debts: Good debt and bad debt. You need to let go of bad debt on consumables (debt that has no future value) and gravitate towards good debt. A good debt bears fruit in the future.

“Be less aggressive with non-conventional and high-risk investments. Less than five of your portfolio should be embedded in high-risk assets. The argument here is that, if the investment goes to zero, your portfolio is still standing firm.”

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Advising Nigerians to focus on the things within its control, it stated, “You can not change the inflation rate. You cannot stop the Naira depreciation. They are out of your control, so you will do well to rather focus on what you can impact.

According to the report, in a bid to fight the low tolerance for inflation, the central banks of countries raised interest rates. This had the greatest impact on personal finances since 2008/2009.

The report also added that many economies slowed down, prompting fears about a recession which also led to job losses. Higher interest rates also led to a reduction in personal wealth as assets people invested in—bonds, real estate, stocks and cryptocurrencies—lost a lot of value.

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