By Opeyemi Solaru
At the start of the pandemic, many did not foresee that we would still be dealing with it over a year later. Currently, Nigeria has over 150,000 confirmed cases and nearly 2,000 deaths. According to the National Bureau of Statistics, Nigeria, over 40 million businesses are classified as micro-, small- or medium-sized businesses. These SMEs contribute to 45% of Nigeria’s GDP, 84% of employment and 96% of businesses.
Business owners were forced to adapt to mitigate the negative impacts of the “new normal.” As business owners created new strategies, they found themselves shifting into new markets and finding ways to reach their customers in spite of the new obstacles. Even still, entrepreneurs globally are still struggling to pivot into suitable growth opportunities.
Specifically in Nigeria, the ease of doing business index was already low before the pandemic, at 131 out of 190 countries. This pandemic definitely exacerbated the difficulties that business owners have already faced. The lockdown ordered by the government resulted in great economic loss, so since then, it has avoided another full lockdown.
To make matters worse, the price of oil also dropped to the lowest since 2016. A report by KPMG estimates that it would impact expected revenue by up to 90 percent. The combined impact of the pandemic and low oil prices calls for small business owners to create mitigation plans that protect their businesses and employees.
KPMG suggests several responses to reduce the negative impact on the Nigerian economy. For example, sensitizing customers to the possibility of price fluctuations. With the frequent change in the exchange rate and the dependence on foreign exports, this can be an appropriate way to ensure that customers understand the circumstances of price changes.
Additionally, as many have already discovered by now, leveraging technology is extremely critical. Whether it is eliminating cash payments for digital payments, or providing online consultations rather than in-person visits, the shift to using digital options is very necessary. Using eCommerce platforms is another method that allows entrepreneurs to expand and reach a wider market than they may have reached prior to the pandemic. Africa has a growing penetration of mobile phones, which makes it even easier to engage in online shopping and other digital transactions.
Nevertheless, it is vital to identify opportunities for growth during these unprecedented times to ensure the survival of businesses. Many of these strategies will likely benefit businesses far beyond the end of the pandemic, promoting sustainability and wider reach.
Opportunities for Entrepreneurs
In partnership with the UKAID, Impact Hub Lagos is implementing a program targeted at offline entrepreneurs that are producing COVID-response products. This program intends to utilize unique methods and tools to help ventures increase their capacity. The program is a great opportunity for offline business owners to gain skills and resources that they otherwise would not have access to, especially considering that they do not have an online presence.
Another opportunity specifically for women was recently announced by FirstCheck Africa, a fund for female founders of tech start-ups at the early stages. They also offer partnership opportunities and will soon launch an investors group to pool more funds towards female-led entrepreneurship.
Such opportunities give entrepreneurs the ability to scale and provide them with the resources they need to have sustainable growth and impact within their respective industries. Without a doubt, the pandemic has been devastating to individuals and businesses globally. However, it has not only revealed the necessity for more resilient business strategies but also provided many unforeseen opportunities for SME owners.