Businesses in Nigeria have been advised to invest in digital
capabilities as one of the critical strategies to survive post-COVID-19.
Former Managing Director, Keystone Bank Limited, Mr. Philip Ikeazor, who is
currently a Director at Tideway Advisory Limited, gave this advice during a
webinar on the effects of COVID-19 on business operation, organised by the
Nigerian chapter of University of Buckingham Alumni Association.
According to him, the transition to contactless operations has gained currency
during this crisis, hence businesses must take proactive steps to remain in
business after the crisis.
“Healthcare is a classic case; in the UK, less than 1 per cent of medication consultations were recorded in 2019 but under the lockdown, 100 per cent of consultations are occurring remotely,” he said. “There is already a big shift to digital and online channels by banks. Online banking rose by 90 per cent during the crisis in the UK, while in Nigeria, electronic bills payment rose by 36.6 per cent during the lockdown.”
Ikeazor added that educational institutions globally have
also embraced remote learning, adding that car manufacturers in Asia have
developed virtual showrooms.
He said businesses in the country would also need to improve their risk
management capabilities as vulnerabilities would continue to exist in the
operating environment. “Organisations that have a proactive and structured
approach to risk management will always stay ahead of the curve as the next
crisis emerges.
“Risk management approaches must be seen from an
enterprise-wide perspective with the capacity to absorb uncertainty, fine-tune
key risk indicators, and incorporate the lessons learnt from the pandemic into
the operating model,” he advised.
He said the businesses also need to adopt “a through-cycle mindset that focuses
on the long-term after reassessing your competitive advantage while shoring up
the balance sheet and capacity in the short term.” This, he said, would be
decisive for businesses in capturing significant value and out-perform peers
post-COVID 19.
While commending the Central Bank of Nigeria (CBN) for coming up with several
initiatives aimed at cushioning the effects of the pandemic on businesses,
Ikeazor urged manufacturers and SMEs to improve their corporate governance
practice to benefit from the apex bank’s intervention fund.
“Local manufacturers companies and SMEs must improve corporate governance by
preparing and auditing their financial documents, have their filing, company
shareholding, and directors in order at CAC, prepare good business plans with
professionals and all these will enable them to access the loans and CBN
intervention funds through their banks, the funds are available at 5% interest
rate which is very good to run a profitable business,”.
He noted that the CBN had pledged Post-Covid19 N3.5 trillion stimulus for key
sectors of the economy including N1.1 trillion to boost local manufacturing.
These initiatives, he said, include: “Funding facilities to key local
pharmaceutical companies for procurement of raw materials and equipment
required to boost local drug production; N1 trillion in loans to boost local
manufacturing and production across critical sectors; and a 1-year extension of
a moratorium on principal repayments for CBN intervention facilities effective
March 1, 2020. He also commended the CBN for reducing the interest rate on
intervention loans from 9 percent to 5 percent effective March 1, 2020.