BusinessDay
Nigeria's leading finance and market intelligence news report.

African SMBs can get ready for the Post-COVID Market: Here’s how

The World Economic Forum describes small and medium-sized businesses (SMBs) in Africa as “the bedrock of African economies” as they account for up to 80% of employment in some countries. The evolution of the COVID-19 crisis so far has demonstrated that small businesses are struggling to operate as normal.

How can SMBs across Africa gain a competitive advantage in the post-pandemic world? It is not an easy question to answer. We know that the pandemic and the response to it has changed consumer behaviour and accelerated trends such as digital transformation. But with many countries still under or recovering from a lockdown, businesses have not yet had a chance to adapt to these changes.

Enterprises are in the frustrating situation of being frozen in place; they can see what is happening and they want to respond. As we begin to imagine what life will look like when the various lockdown restrictions are uplifted in countries, these are some of the ways that SMBs can prepare for the new world:

Embrace innovation to compete

Small businesses are a vital part of economies: they create jobs and enable inclusive growth to participate alongside big businesses. According to McKinsey, SMBs across South Africa represent more than 98 per cent of businesses, employ between 50 and 60 per cent of the country’s workforce across all sectors.

However, due to the pandemic up to 70% of SMB owners have had to reduce business spending and despite government efforts, many businesses have also had to cut down on the workforce. In Uganda, micro and small businesses experienced a larger decline in business activity compared to larger companies.

Ifeyinwa Afe, Central Africa & Managing Director – Nigeria, HP

Small business owners need help in harnessing the power of technology so that they can continue operations and retain jobs. Africa is still relatively new to established technology infrastructure. A recent study by Forbes revealed that Africa’s tech hubs have grown to a new record of 643 across the continent, yet most of these hubs received less than $100 000 in funding.

Digital transformation can help Africa’s SMBs maintain their business in today’s fast-paced and ever-changing environment. While customers are experiencing their own fair share of challenges, it is important for SMBs to adopt digital technologies to deliver engaging experiences that will make life better for their customers – everywhere.

Digital transformation can improve operations and combat the growing threat of disruption. Using digital technology such as Virtual and Augmented reality, mobile printing, and custom manufacturing via 3D printing, can help SMBs achieve operational efficiencies, boost productivity, and gain a competitive advantage.

Today, Africa has a population of 1.3 billion people with 75 % of people under the age of 30. It is estimated that by 2050, the population will reach 2.5 billion people and the continent will have a workforce that is larger than those in China and India combined. These increasing dynamics and consumption-hungry young people are rapidly migrating from rural areas to African cities looking for jobs and prosperity.

READ ALSO: Post Covid-19 economy: Makinde urges MSMEs to access FG’s survival fund

It is important for SMBs to adopt an agile strategy today to prepare for this changing target market – essentially by becoming digital at the core. This will increase efficiency, monetary opportunities and, improve market reach and insight into customer buying behaviour.

Empower employees with skills of the future

If SMBs are to take advantage of their strengths to win in a post-pandemic market which promises to be more competitive — than anything we have seen for some time. We must urgently address gaps and weaknesses, and that means giving business owners and staff the skills and competencies they need to help power business growth — and their own professional progress.

So, what can African SMBs do now to start in the post-pandemic marketplace? Part of the answer is “smart upskilling”: this involves learning discrete tasks quickly, at a speed, usually using innovative remote- and digital-learning tools and platforms. In some instances, this can replace traditional forms of learning, for instance, comprehensive certifications.

HP has been offering entrepreneurs around the world an opportunity to enhance their business and IT skills through the free online Learning Initiative for Entrepreneurs (LIFE) programme. HP LIFE is a programme of HP Foundation, and in 2018 pledged to empower 100 000 learners in Africa.

HP LIFE is built on the belief that entrepreneurs are the backbone of the global economy. The online learning tool is focused on empowering entrepreneurs with business and IT courses, such as finding funding, IT for business success, or using energy efficiency to do more for less and even learning ‘how to build a user-friendly website to meet your business goals and effectively reach your target audience’.

In Tunisia, where the current unemployment rate is at 16 percent, the HP Foundation with the United Nations Industrial Development Organization (UNIDO), USAID, and other partners launched a job-creation project, called “Mashrou3i,” (which in Arabic means, “my project”).

The aim of the project was to foster a spirit of entrepreneurialism and offer tools that can support fledgeling business owners. In 2017, the program created 1,250 jobs and 160 start-up companies in Tunisia. Entrepreneurship and small businesses are significant for the growth and maintenance of local economies.

A thriving and healthy local economy can provide communities, youth, and women with opportunities to empower others to grow, and in turn, create a positive cycle. Supporting SMBs also fosters local economies and keeps the money close to home.

As we begin to open our borders and make way for new opportunities, it is important for African SMBs to take advantage of the available tools and resources to help them bounce back. Employees also need relevant training, as an empowered employee is productive and can assist the business and the continent to grow.

Ifeyinwa Afe, Central Africa & Managing Director – Nigeria, HP

Whatsapp mobile

Get real time updates directly on you device, subscribe now.