The global COVID-19 pandemic is no doubt having a drastic impact on businesses – both large and small across the globe. Since the outbreak of the pandemic in Wuhan, China in December 2019, many businesses have been forced to close, leading to an unequaled disruption of many business operations and activities in various industry sectors.
In the wake of the COVID-19 virus, there has been a shift in the way businesses and organizations operate. From closing down productions and operations to a drop in consumer confidence, COVID-19 continues to impact businesses and even threaten their very existence. As the corona-virus pandemic is a novel crisis to several organizations and companies, they are faced with the challenge of managing workplace health and safety, as well as managing other vital areas of business such as the supply chain, the workforce, cash flow, consumer demand, sales, and marketing.
With the gradual increase in the number of people affected by COVID-19, the Federal Government of Nigeria had to quickly take stringent actions. Hence, to curtail the spread of corona-virus, the federal government of Nigeria imposed a lock-down measure in March 2020. Three major states affected by the initial lock-down announced by President Muhammadu Buhari are Lagos, Ogun and the Federal Capital Territory.
Though the restriction announced did not affect hospitals, and businesses trading essential items, however, the lock-down in Lagos being the epicenter of Nigeria’s trade and Abuja being the seat of its government dealt a thorough blow to the activities of several businesses across the country. The lock-down became a major constraint for businesses due to control measures such as social distancing, transport restrictions, and ban on the opening of market places.
Survey shows that the COVID-19 has had a devastating impact and disrupted the value chain of many businesses in Nigeria with some business owners murmuring and complaining that their sales have plummeted. Findings also show that the effect of COVID-19 has been more severe for micro, small and medium-sized enterprises as these businesses are more vulnerable because they tend to have fewer assets and limited cash flow to lessen the lock-down induced liquidity shortages.
The long-term result of the impact of COVID-19, cannot be entirely concluded at the moment, however projections paint a bleak picture for businesses in the following months as major industries are bracing for the worst economic downturn in recent years. Also, some small and medium-sized enterprises are at risk of collapse and to be permanently shut down within a matter of months if the spread of the virus and subsequent lock-down measures continue to be enforced. If that is allowed to happen, it would surely have a dire social and economic consequence.
However, the good news is that the Federal Government and the Central bank of Nigeria is deploying strategies to avert the economic impact of the pandemic by loaning money to the individuals, businesses and industries that are most affected and those that are in the front line of fighting the pandemic. The manufacturing, pharmaceutical and healthcare sector among several others are the main beneficiaries with ₦150 billion earmarked as intervention funds.
Hopefully, with these intervention funds, vital sectors of the economy will not sink as these loans will help businesses and organizations to maintain their cash flow liquidity, stability and continue to boost local production and reduce reliance on foreign exchange and imports. As the COVID-19 pandemic continues to threaten the stability and even survival of several businesses, it serves as a wakeup call to some companies to embrace innovation and come up with new ways of conducting business. Business leaders are left with no choice but to figure out a number of effective measures they can adopt to mitigate the effects of the crisis and operate sustainably in this new environment such as adopting technology, working remotely and using e-commerce.
There is no doubt that COVID-19 will fade away as several global pandemics of the past. However, I am certain that COVID-19 will also change the business world and businesses should prepare to adapt to these changes. In a time of crisis such as this, to survive, thrive and win, business organizations must embrace the flexibility that should help them easily identify new business opportunities or threats. Therefore, as companies look forward in hope for towards the end of the pandemic, this is the best time to rethink their business strategy and plan a reposition for growth and relevance in the post COVID-19 world.
Written By Godwin Kingsley
Executive Director, Seal Resource Firm / Founder, WIDEF