Businesses in Nigeria have suffered the adverse impact of global disruptions as it affected production and commercial operations. While some of them were yet to fully recover from the unprecedented outbreak of the coronavirus pandemic, the Russia-Ukraine crisis struck another blow.
Business experts are of the opinion that challenges and disruptions will always arise but entrepreneurs need to be proactive and innovative to provide solutions, overcome the disruptions and ensure sustainability.
Innocent Chukwuma, founder, Innoson Vehicles Manufacturing Company Limited (IVM), Nigeria’s first indigenous automaker, said at the 3rd annual lecture series of the Development Bank of Nigeria (DBN) that during the pandemic people were not in a position to buy cars as the focus was to save lives.
Consequently, he remodeled his operations to start manufacturing ambulances and even went on to produce tricycle ambulances which were a welcome solution to the current problem and also improved the organization’s sales.
“As a business owner you need to be forward thinking and must consistently provide solutions to problems, furthermore, you should look for ways to utilize opportunities and try to create partnerships with other local players in the country,” he said
Johnson Obasi, CEO, Johnsfrank global resources Nigeria limited, Aba based footwear manufacturer turned PPE producer, told BusinessDay that business owners in Aba took to producing PPEs on a large scale, partially abandoning their main business as people no longer bought clothes and shoes rather they sought for safety items and protective kits to survive the pandemic.
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“Initially nobody knew anything about PPE until coronavirus struck, we saw an opportunity and embraced it, we researched the material and began the production of PPEs which are face masks, overalls, etc.”
He said on an average, during the heat of the pandemic, they produced 700 PPEs daily and for overnight jobs they produce 1 thousand PPEs and sell out as companies, individuals and organizations place orders also middlemen buy and resell to other states.
For Nigerian businesses, the disruption extends to the current uptick in emigration otherwise known as ‘japa’ which has seen thousands of skilled and learned people travel abroad in search of greener pastures, leading to a high vacancy rate and constant need for recruitment for companies.
Ehia Erhaboh, executive vice president EVP, Operations & Technology, Interswitch, while speaking at the lecture series said the rise in emigration initially posed a problem especially for companies that operate in a sector that is skill intensive and requires manpower.
“What we did at Interswitch was to institute policies that helped us retain some employees such as giving allowances to their spouse directly, extending maternity leave to nine months while paying for crèche, and allowing employees work from anywhere in the world,” he said.
He added that companies are now moving from a certificate based employment to skill based employment, hence if an individual possesses necessary skills, landing a job will be much easier than expected.
Roosevelt Ogbonna, Group Managing Director, Access Bank Plc said the world economy has been confronted by several negative events with adverse implications for MSMEs, adding that there are more gloomy days and uncertainty ahead.
Highlighting some impacts of global disruptions on MSMEs, he said 70 percent of them shut down and suffered decrease in staff strength, over 75 percent of them experienced decline in demand and revenue, 90 percent experienced cash flow shortage and created an additional financing gap of $2.9 trillion.
Ogbonna said although there have been support initiatives implemented by the government and its agencies to cushion the impact of these disruptions, the onus lies on entrepreneurs to revise their business models in a way that makes it less vulnerable.
“MSMEs need to rethink business models to weather economic storms, maximize product diversification ,create strategic alliances to garner more market share, embrace technology, Diversify the supply chain to ensure consistent flow of product and Seek out financing alternatives to solve cash flow problems,” he said.
Similarly, Henrietta Onwuegbuzie, Director, Entrepreneurship Innovation Centre, Lagos Business School, Pan-Atlantic University, said businesses have to be solution driven and must recognize opportunities amid challenges.
“For example, the current increase in emigration and inflation abroad gives export opportunities that MSMEs can maximize,” she said.
The director also said funding is not the major problem of businesses, adding that entrepreneurs need to undergo different training to effectively and efficiently run a business.
“You find out that the success rate is much higher for businesses trained through the apprenticeship system because they have learnt all the intricacies of operations which they eventually replicate,” she said.
Sa’Adiya Aminu, CEO, Urban Shelter said businesses must not compromise on quality, noting that it is a major reason for the preference of imported and foreign products.
“Nigerian businesses can make quality products but they need to be pushed,” she said.
Aminu added that although businesses are making efforts towards sustainability and profitability, the government needs to encourage them by implementing business friendly policies and generally improving the business environment.
