…calls for restructuring businesses in pandemic era
University of Lagos Professor of Business Administration, Sulaimon Abdul-Hameed Adeola, has noted that with the latest World Bank report on Nigeria, which stated that 7.5 million people in Nigeria, the country has slided into extreme poverty in the last one year.
He noted that, Nigeria is rated as almost the poverty capital of the world, even as the government claims the contrary that it has moved 10.5 million Nigerians out of poverty in the last two years.
The Nigerian Economic Summit Group (NESG) has warned that the rising rate of unemployment is worsening the poverty rate with the Naira exchanging at 410.33 Naira to the UD Dollar as at 18th of June 2021 officially and 503 Naira at the parallel market, gross domestic product (GDP) growing at less than half of the population growth rate, foreign direct investment ( FDI) plummeting, insecurity worsening by lack of employment for the teeming population and palpable fear in the land, no one needs an expert to tell one that it is time to restructure businesses for survival and sustainability.
Professor Abdul-Hameed Adeola stated this at this year’s edition of the Distinguished Management Lecture of the Nigerian Institute of Management (NIM) Chartered in Lagos.
Entitled: ‘Restructuring Businesses for Sustainability in the Pandemic Era,’ the Don added that this has become imperative to rebuild the economy that was weak before the COVID-19 pandemic which further worsen in this yet to be abated pandemic, let alone, the post-COVID-19 era that would come with another unknown challenges.
A fellow of the institute, he revealed that investors divestment in Nigeria costs stock market N1.8tr in six months, even as market capitalisation which stood at N21.515Tr as at January 5 2021 when market reopened for transactions for the year, dropped to N19.725 Tr as at close of trading on June 22, 2021.
He said, “It is very convenient to hold COVID-19 responsible for all that has happened in the last year but for a fact, our economy and businesses were already nose diving and businesses going into extinction before the advent of the pandemic. There is clearly an existential threat to our lives and livelihood if urgent steps are not taken.
“Many economic experts view COVID-19 pandemic as a metaphorical “black swan” occurrence that is propelling huge tendency of business failures, the International Labour Organization (ILO) projected that COVID-19 could wipe out roughly 6.7 percent of working hours globally, equaling to 195 million full-time workers while huge decreases are foreseen in the Arab States 8.1 % equivalent to 5 million full-time workers, Europe,7.8 % or 12 million full-time workers and Asia and the Pacific 7.2% or 125 million full-time workforces.”
Also on the global front, he stated that global foreign FDI flows would drop significantly during 2020-2021 adding that the scenario, presents a very gloomy picture of the entire world and depict huge complication for businesses across sectors, that can affect their sustainability hence Nigeria was not immune from this, but needed to ensure that deliberate efforts were made to reduce the suffering of its citizens in this uncommon time of the world.
He urged business organizations to address fundamental questions on how to effectively deal with diverse dimensions of sustainability, namely, social, economic and environment even as he reiterated that COVID 19 pandemic has thrown up many complications and challenges in addressing the diverse elements of business sustainability. “It is therefore a matter of urgency for respective actions comprising a fundamental shift in the
tenacity of business and almost every facet of how it is conducted, and an assimilation of sustainability in firm’s business model to be taken seriously as sustainability is no self-sacrificing end in itself, but relevant transformation must resonate with firm’s economic circumstances and their position in the market.”
He called for the integration of well-established “Crisis Management” and business remodeling that would enable organizations to deduce valuable insights and create an appropriate sustainability model that has potency in promoting endurable enterprises risk management during crisis such as COVID-19.
The renowned public affairs analyst noted that COVID-19 pandemic opened great flaws in the current business models and operations of many businesses, adding, “Even though contingency and risk management
strategies exist in most business enterprises, the immediate impacts of COVID 19 crisis and failure in minimum performance criteria indicate that the implementation of the existing programs/business models of most firms are inappropriate and do not have future contingency that is of practical value.”
On the event served via zoom, Professor Abdul-Hameed Adeola recommended in the present circumstance that the government needed to sufficiently encourage and empower the local pharmaceuticals companies to partner with producers of COVID-19 vaccine with the likes of Pfizer-bioNtech, Oxford-AstraZeneca, Moderna etc. to have the vaccines produced locally, in order to make it available for the population so as to arrest the spread of the pandemic and by extension create jobs in that sector.
He observed that the government has set up a committee with members drawn from the ministry of industry, trade and investments, chambers of commerce and industry as well as the central bank of Nigeria to grant them loan with single digit and some months moratorium in what he code named “Businesses resuscitation and revitalization committee” with the mandate to identify critical sector most affected by the Covid 19 pandemic and group them into categories in terms of their capacity to provide jobs, revitalize the economy and mitigate the insecurity pervading the land, this he says should be made to work effectively.
“One of the most likely aftermaths of COVID 19 is economic recession, thus, enterprises will need customers with cash to spend. Unconditional cash transfers that is presently in place should be intensified and enlarged to cover all states of the federation throughout the crisis until the economy starts recovering.
“Government may also consider tax incentive, increase the infrastructure drive, improve on the security architecture by way of more equipment, more personnel and retraining to meet the exigency of the time.
“In the wake of the COVID-19 pandemic, numerous businesses and countries have discovered how susceptible they are to disruptions in supplies that are concentrated in one or a few contexts, on this note, there is need for governments having substantial economic ties to organize rapid and effective digital market platforms to lessen transaction costs and propel alternative value chain.
“Given the current business environment, it is more significant than ever for companies to incorporate sustainability drive into their long-term strategies, sound corpor ate governance and corporate citizenship should be developed through robust business strategy for navigating environmental complexity and social change created by COVID-19.
“One of the great lessons of COVID 19 is that enterprise can function with little or no physical structure which has been termed the new normal such as online meetings. The lesson from this is that enterprise can reduce cost associated with massive edifice and invest more in
technology. Enterprise should also encourage and adopt strategic agility components of strategic sensitivity, resource fluidity and leadership unity to cope with change,” he recommended.
The President of the institute Mrs. Patience Ehizogie Anabor in her address explained that the Distinguished
Managment Lecture was one of the Institute’s contributions to nation- building adding that it provides a platform for it to brainstorm on a burning and contemporary governance and leadership issue of national importance and proffer ways forward.
She noted that COVID-19 pandemic has created a crisis unprecedented in terms of scale and social, economic, and environmental implications the world over. Her words:
“The consequences of this crisis in the affected countries are manifold. In addition to its human impacts, particularly for victims and for overburdened health services, the pandemic is often compared to the great depression of 1929.
“It has created an endemic situation of uncertainty and confusion about risks to employees. For organisations, these uncertainties are all the more difficult to manage as they have affected the way businesses are conducted, and they include new technological productivity and value creation tools as well as built-up competencies and capabilities in operations, and governments and organisations have retooled their budgets to address the disruptions that come with it.”
Story by Simeon Mpamugoh