The devastating impact of the COVID-19 pandemic on both lives and businesses has been immense and immeasurable. But as medical specialists continue their search for a vaccine for the virus, business experts have already found ways for businesses to survive harsh stings of the pandemic and lockdown. And Dr. Oluwadolapo Conteh is one of the many eggheads that have proffered tips for business owners, especially those in the consumer market sector. Dr. Conteh is a business expert with vast experience in Management, Banking, and Accounting.
She is a strong sales professional with strong business acumen. Conteh is an experienced professional with 10 years of banking experience spanning Relationship Management in both the Commercial and Retail Sectors. She is also skilled in Credit Analysis Structuring, Customer-focused Selling, Customer Service, Business Negotiation, Strategic Marketing, Credit Risk Management, Operational Risk Management, Financial Accounting, and Financial Reporting.
She currently serves a leadership position in Babes Redefined, a female Facebook group with over a 100,000 membership in Nigeria and abroad set up to help women actualize their vision and fulfil the purpose. She also owns a blog where she shares her opinion on basic life issues. In this interview, Conteh, who is a DVM degree holder from the University of Ibadan, and a member of the Association of Chartered Certified Accountants, UK (ACCA), dissected the huge toll of the pandemic, and further gave hints on how consumer business owners should redirect the companies to keep it alive.
How would you rate the impact of the COVID-19 pandemic on some key economic sectors?
The negative impact is huge. For the Fast Moving Consumer Goods (FMCG), the pandemic led to the discontinuation of production activities, supply chain disruption with a higher cost of production inputs, distribution and delivery channels hampered due to restrictions in movement, increased logistics expenditure and time to market slower, increased demand in the short term due to panic buying, reduced cash flows due to decline in production capacity and an Increased finance cost due to cashflow issues.
Also at the agriculture and agro-allied, the pandemic and lockdown triggered shortage and scarcity of inputs required for agricultural production.
Then there was increased cost of production due to scarcity of essential inputs and dependence on local supplies, increased challenges with supply chain and logistics due to clarity around restriction and closure of interstate borders, lower demand due to various social interventions by various state governments to cushion the effects of food shortage, insecurity and increased attacks on farms and spoilage and wastage of agricultural products due to border restrictions and increased time to the market.
Then for general commerce, there was a sharp drop in demand for non-discretionary goods due to reduced government spending and excessive savings with a reduction in customer’s purchasing power.
Also, the supply chain was disrupted because of the closure of international and interstate borders, pressure on alternative distribution channels, increased cost of production for imported goods with the devaluation of the naira, and increased redundancies due to a drop in revenues. These and many more were how these sectors where affected.
There seemed to be a united global response to the outbreak of the pandemic. In what ways did businesses leverage on these measures?
Most countries responded by instituting a partial or total lockdown of their economies, for example, closure of borders with travel restrictions, and enforcement of social distancing with attendant effects on how businesses are conducted.
Also, nearly all firms took proactive measures to protect their people and to curtail the spread of Covid-19. These include restricting travel and taking other prevention-oriented policies, emphasising workplace hygiene, offering alternative ways of working, and initiating proactive communication.
Most firms were forced to go back to the drawing board to review issues such as staff compensation, disengagement of staff in order to cut costs, terms of agreement with stakeholders in order to ensure continuity of the businesses beyond COVID-19.
Unemployment rates increased enormously with corporate redundancies in affected sectors such as the airline sector, oil, and gas, customer durable goods, transport and entertainment in most affected countries of the world.
Businesses were forced to review their operations in order to identify the most critical processes required for the survival of the business while doing away with other trivial ineffective processes that are not useful to surviving the epidemic.
Most financial institutions were able to successfully move their customers to alternative channels with the majority of staff working remotely due to the lockdown in most parts of the world.
READ ALSO: https://www.thexpressng.com/2020/07/17/that-startimes-disturbing-price-increase/
Firms also leveraged digital technology to continue to provide services to their customers in order to comply with rules of social distancing.
Customer and staff engagement was practically conducted through the digital platforms, with the creation of digital meeting rooms and automated call centres in order to keep up with the social distancing rules and curtail the spread of infection. Online learning opportunities have also increased with Ivy league institutions offering various opportunities to learn and acquire certificates online.
Can you describe how the Covid-19 scourge has exposed Nigeria’s economy to another recession?
Large-scale quarantines, travel restrictions, and social-distancing measures drove a sharp fall in consumer and business spending until the end of Q2 (second quarter). This produced a recession.
With consumers staying home, businesses lost revenue and laid-off workers, unemployment levels rose sharply, business investment contracts and corporate bankruptcies also soared, thereby putting significant pressure on the banking and financial system.
The Nigerian financial system is in significant distress with fiscal and monetary-policy responses also proving insufficient to break the downward spiral with a recession looming in most countries of the world.
The global economic impact is severe, approaching the global financial crisis of 2008–09. GDP contracted significantly in most major economies in 2020, and recovery is projected to begin in Q2 2021. Nigeria appears to be one of the worst-hit economies due to its large dependence on oil, being forced to slash production with the global oil price slump induced by the coronavirus scourge.
With oil accounting for 60% of government revenues and 90% of foreign exchange, the government is far below its budget benchmark.
Standard & Poor (S&P) downgraded the country’s long-term credit rating further into junk territory, from B to B- with a decline in crude oil revenues.
There have been several interventions by the Federal and State governments and private institutions to provide palliatives to ease the effect of Covid-19 on the economy addressing food security and the CBN offering stimulus loan packages to farmers and manufacturers via the commercial banks at special rates.
YOU MAY ALSO LIKE: https://www.thexpressng.com/2020/07/16/uk-woos-nigerian-doctors-with-new-migration-visa/
The IMF approved US$3.4 billion in May in support of the country’s efforts “in addressing the severe economic impact of the Covid-19 shock and the sharp fall in oil prices.”
The loan was approved under the Fund’s Rapid Financing Instrument.
As a business expert, are there opportunities for businesses to explore in order to remain in business?
With COVID-19, there is a new normal with lockdown being eased in the past few weeks all over the world especially in developing economies where there is little support from government to private institutions.
There also seems to be no end in sight to the upsurge of infections globally especially with a deficit of health professionals and medical facilities becoming swamped.
It is therefore imperative that businesses must, therefore, learn to adapt while taking advantage of the numerous opportunities presented by the dire situation.
All innovations must put into consideration the need for social distancing, staff welfare, hygienic work practices and the safety of products and services.
The situation is an opportunity for organisations too to have a rethink of their business models and introduce changes to adapt and survive.
What would you recommend as survival strategies for these businesses?
For organisations into FMCG’s (fast-moving consumer goods), they should endeavour to implement health and safety measures to assure employees of their safety in the workplace.
Then they should deploy digital platforms to enable noncritical staff to work from home or on a rotational basis.
They must also leverage automation production solutions to ensure production can continue with little human intervention. Companies should ensure supply chain realignment, and explore multiple supply options, develop and test run the contingency supply options, locally sourced inputs, and alternative facilities that can be relied upon.
Businesses should rapidly explore alternative and cheaper financing options and negotiate loan repayment terms with lenders in view of the Covid situation.
For the Agriculture and Agro-Allied sector, the business owners should explore the different stimulus packages for agriculture rolled out by the Federal Government.
They should also explore the different supply chain logistics to reduce costs and optimise production.
Also, they should adopt digital platforms and social media to engage customers and increase sales, prioritise digital payment solutions for transactions consummated.
Organisations should consider cost optimization opportunities within the business to encourage profitability, and encourage partnerships and engagements with governments both at the state and federal levels to solve food supply and distribution issues.
