As many businesses close the year 2020 with negative revenue and profit in their books, a consultant, Babajide Ogunsanwo has asked businesses to concentrate on advising government on pratical policy road maps that will ensure business survival in 2021.
According to him, such recommendations will be important as the year 2021 will not be significantly different from this year. He said the Nigerian economy is not expected to significantly grow faster from the present -3%. This means that 2021 will be a mirror of 2020.
Following the sluggish growth of the economy in 2020 and the eventual slipping into recession in Q4, families will further limit their spending which will affect businesses and the economy.
Ogunsanwo who spoke recently in Lagos described families spending as the biggest expenditure in Nigeria’s economy. Household consumption expenditure in 2019 amounted to N40.20 trillion out of which 56.65% was spent on food, according to National Bureau of Statistics. He spoke at Outdoor Advertising Association of Nigeria, OAAN ‘Night of the Legends’.
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According to the data consultant, it is expected that if families are not spending, businesses will be affected as they will not make sales. Businesses will also not hire which will affect employment. Today unemployment rate is over 27% which threatens security situation.
To survive the current challenges, Ogunsanwo therefore said the success of businesses and advertising sector depends on Nigerian families’ expenditure. “But the question is how do you make families spend more as they can’t spend what they don’t have”. This, Ogunsanwo answered that it is through creation of jobs and policies.
He therefore challenged Nigerian businesses to intensify their efforts of mounting pressures on government to create policies and programmes that would help both the advertising and other sectors in creating jobs.
“Instead of focusing on how to get more money for their businesses, businesses need to play a bigger role in advisory, recommendations on policy road maps, ensuring positive impact of government decisions on their sectors”.
Prior to now, what we have seen are a lot of businesses complaining that policies are not favourable, but businesses need to make specific recommendations and provide time lines. The businesses also need to show the way such recommended policies will impact sectors and the economy which has perhaps been missing from previous recommendations. “What has been in abundance is complaint and criticisms of policies”, he said.
On other innovations for obviating the turbulent times, Ogunsanwo said that instead of businesses such as Outdoor advertising just offering services, they could enter into business partnerships and mergers.
Speaking later at the forum where eminent practitioners in Outdoor were recognised for their contributions to the industry, the President of the OAAN, Emma Ajufo called on the regulators to remove the yoke of debts placed on his members as a way of creating a sustainable out of home industry. He said “these debts are largely from the charges on vacant billboards”.
Ajufo also appealed to the regulators for urgent review of fees charged on billboards. “A drastic reduction of the rates will greatly encourage small businesses to use our platforms and this might just be the stimulus to jumpstart the much needed economic recovery”, he said.
