We all woke up to the news of an Italian with the coronavirus in Nigeria on the 28th of February 2020. That news set panic and distortion to our daily activities and since then monitoring data on infections has been so important to the government and public health agencies across the nation.
The coronavirus disease 2019 (COVID-19) developed in a densely populated manufacturing and transport hub in Wuhan central China and has since spread to more than 50 other countries and regions (as of 29 February 2020). The coronavirus disease can infect both animals and people and can cause a range of respiratory illnesses from the common cold to more dangerous conditions like Severe Acute Respiratory Syndrome, or SARS. The big question then begging for answers in the coming days in Nigeria is “Is coronavirus a challenge to business and how worried should I be?
Though it is hard to be pre-emptive on the outcome especially since it’s a health-related issue but then one thing is sure coronavirus is a big risk to business. This risk is recognised and visible, it is likely to have significant implications on businesses and its environment and beyond. Therefore, as a business owner, entrepreneur or SME operator you have to be relatively concerned about the development and equally track the progress of the outbreak going forward. This will help in no small measure to come up with ideas to scale through the difficult time the outbreak has presented.
The emergence of the corona virus in Nigeria is a bad indicator for our economic performance. If the spread is not curtailed immediately it might have a negative impact on bilateral cross-border relations, inflow of Foreign Direct Investment, employments, imports and export trades, industrial activity, tourism, air travels, social events, schools and more than likely it might disrupt or crash the economic forecasts and revenue estimates of the nation. This arrival might equally impact negatively on many businesses particularly SMEs given high uncertainty around production and demand if the virus continues to spread.
Therefore, it is important to be proactive and strategise in your business. Because it is unclear how fast and how far it might spread and again the uncertainties surround the virus’s is a huge cause for concern. The impact of the disease in the coming days might also become much larger if the coronavirus spreads without meaningful intervention. Though it is still too early to measure the full financial impact of the disease on the economy, but the early signs don’t look good. Recall, the major import trading partner of Nigeria is China and China is the second-largest economy in the world. Exports from China to Nigeria was captured as $1.04 billion during 2018 and was on the increase in 2019 according to the United Nations. Therefore, with the current state of things in China the percentage of export trade from that country is likely to be affected. The demand for Chinese products into the country through exports might suffer declines. Because with millions of workers now in quarantine and many of the manufacturing plants shut down, China is struggling to get economic activity back on track.
The relative importance of China in the worldwide economic landscape will more than likely cause a domino effect in the value chain across the world.
Therefore, for the global economy this event can lead to recession considering the outbreak of the virus have been detected in many developed countries of the world with over 50 countries already battling to curtail the spread and more than 80,000 reported cases as of February 29 2020. The economic impact of the deadly virus is very high and perhaps with the post-Brexit effect, and US-China trade war the year 2020 might be a year of market dislocations and difficult time for many economies especially on international trades.
The COVID-19 is likely to cause huge market and work disruptions in the value chain of these following sectors in aviation, retail businesses education, automobile, Hi-Tech, tourism, entertainment, hospitality, electronics, consumer and luxury goods. Already big companies like Apple, Hyundai, Kia have announced strategic plans to cushion the effect of the disease, with most of them reducing their revenue targets. However, stock prices of many blue-chip companies across the globe especially where high numbers of cases have been reported are already falling due to the surge in coronavirus cases. More so stock market performances across the globe have been fluctuating with larger percentage reacting negatively to the impact of the incidence.
Nonetheless, the good news is that the current level of detections and quarantined in Nigeria is controllable and manageable. The real subject matter for the government and other economic policymakers, is to see that the virus is short-lived in Nigeria. Because generally in Africa we lack effective surveillance, diagnostic, and hospital capacities to identify, isolate, and treat patients during such outbreak. This weak system may increase the possibility of contagion if not well managed and this could have both social and economic consequences. The federal and states governments including the public health agencies have these all-important responsibilities, that is prevent the pandemic from spreading beyond control and also put measures in place to keep it from happening again. It is essential to start vigorous awareness campaign and this needs to be accelerated to keep citizenry informed about their hygiene, the disease pattern, early signs and what to do if such cases are noticed.
It is widely believed that this event will be only a temporary disruption, but so far, the virus has proven to be difficult to contain and hard to predict. However what businesses can do to cushion the effect of the surge of the disease in the meantime is to strongly imbibe technology usage to reduce human contacts and adopt effective use of social media marketing, campaign and advertisements for their products and services. SME operators, entrepreneurs including large firms should move closer to clients by encouraging delivery services and also design strategic plans to drive sales so that revenue targets for year 2020 will be visible.
TIMI OLUBIYI
Dr Olubiyi holds a PhD in Entrepreneurship and Small Business Management. He is a prolific investment coach, Chartered member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached via email drtimiolubiyi@gmail.com and twitter handle @drtimiolubiyi
