The Impact of Covid-19 on the Nigerian Markets
The COVID-19 pandemic brings unprecedented challenges. Demand for many goods and services has fallen dramatically, whilst some manufacturers either have shortages or are overwhelmed. In Nigeria and around the world, borders are being closed and societies are having to change the way they live. As entire countries come under quarantine orders and consumers around the world try to reduce human contact, manufacturers need to recognise that their response to the novel COVID-19 Pandemic will have a significant impact on their business. Those that respond by rising up to the occasion would seek innovative ways of dealing with the situation while those who react may struggle with adapting to the changes, they need to make to remain profitable and resilient in these times.
Nigeria’s high dependence on Chinese imports aggravates its vulnerability. In 2019, raw materials constituted 70% of the total imports from China into Nigeria and according to the National Bureau of Statistics (NBS), Asia and Europe contributed 86% of Nigeria’s imports in Q4 2019. The restrictions currently imposed on cross border trade has significantly distorted supply chains for manufacturers and we are beginning to see the effect on the Nigerian economy. Manufacturers need to be more agile, local and responsive to consumer needs, whether it be by increasing supplies or relying more on e-commerce. Agile organisations which can meet the needs of their consumers by localising their supply chains, offering a high degree of convenience and communicating clearly with their target market, will better ride through the crisis.
For most retailers and fast-moving consumer goods companies (FMCGs), business continuity will depend on the quality and viability of both their suppliers and their customers. Hence the need to seek partnerships with local suppliers and distributors on innovative supply and distribution models and channels that will ensure the availability of products and services to customers and consistent customer engagement throughout this period. For example, in view of the lockout in most cities across the world and in Nigeria, many restaurants are offering online orders and home deliveries and, in some instances, refreshing their menus entirely to appeal to customers who have for the most part been homebound.
In Nigeria, states like Lagos and Ogun, which are major production hubs have been shut down by the government to effectively curb the spread of the virus. We have articulated the key monetary and fiscal measures of the Federal Government of Nigeria (FGN), aimed at cushioning the economic impact of the virus. Organisations need to work in tandem with the government to ensure that any stimulus or actions are aligned. This can help lessen any short-term pain and potentially give way to long-term opportunities.
During these uncertain times, businesses must act with Integrity and Empathy to navigate the current challenges and retain their customers when the crisis ends. By treating customers in the right way now, organisations are able to continue to nurture and likely to retain them in the long-term.