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COVID-19: Startups groan over losses, may shutdown in months

Startups are beginning to experience losses caused by COVID-19 outbreak and may shut down in months if the losses are not stemmed.

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CACOVID

Startups are beginning to experience losses caused by COVID-19 outbreak and may shut down in months if the losses are not stemmed.

The shutting down of businesses might lead to a higher level of unemployment in Nigeria as the economic effect of COVID-19 continues to take its toll on operations and activities of SMEs all over the country.

The emergence of the global pandemic in Nigeria has led to a partial shutdown of the government, businesses, airports and markets with a ban placed on gathering of more than 25 people in some parts of the country. Economic activities are beginning to slow down all over the country, as economic units are advised to practise social distancing and proper health precautions to stem the spread of the virus.

The Central Bank of Nigeria (CBN) in response to the looming economic crises arising from the effect of COVID-19, in collaboration with the bankers’ committee, has rolled out an economic stimulus package of N3.5 trillion to boost economic activities in manufacturing, health and other key sectors in order to prevent a complete meltdown of the country’s economy. The apex bank will also provide a N100 billion in loans to health authorities to contain the spread of the new virus.

[READ MORE: COVID-19: More local airlines suspend flight operations)

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Meanwhile, amidst the increasing number of confirmed COVID-19 cases in Nigeria. Startup founders and managers have raised concerns about the devastating negative effects of the virus on their businesses with the loss of customers, dwindling revenue and increasing financial obligations.

Recession looms as UN, ILO declare 25 million will become jobless

Speaking to Nairamentrics, co-founder at Drivers.ng, Daniel Esthekpaobo called on government to assist them and prevent a fade out of their business. He said, “Well, the effect of this virus has been a colossal fall from progress for our business. We have now resulted to working remotely; financially we are on a decline, as drivers have been told by their employers to stay at home.” 

Victor Ejechi, partner at Statisense said, “COVID-19 is not just coming to disrupt our health or daily activities, it has also come to disrupt businesses and many start-up companies after the pandemic will face difficulties in operating due to huge losses and may eventually shut down jacking up the number of unemployed people in the country.”  

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Tech start-up founder, 115 Garage David Aboluwarin though said the effect on the coronavirus is not pronounced on his company, he added that, “It is just a pity the government can’t afford to do a total lockdown; it is best if Nigeria can be rid of the virus fast.” 

Titobi Oreolorun, founder JustUsed said, “For us at JustUsed, we have had a slow product purchase since last week and we can’t import most of our gadgets since all borders are on lockdown, as sourcing in the country also has come with a very high cost and COVID-19 is playing a major part in this.”. 

Meanwhile, as at 11:25 pm yesterday, the total number of confirmed cases had hit 51 in the country, with 48 active cases as the economic implications of the virus continue to linger with Nigeria reportedly preparing for a Nationwide lockdown to curb the spread of the virus.

 However, even when Nigeria is rid of the coronavirus outbreak, the economic effect on small and medium businesses might still linger, as the country’s borders might still be temporally shut preventing free movement of people, goods and services.

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1 Comment

1 Comment

  1. Abdulkareem auwal sani

    June 19, 2020 at 5:21 pm

    AbAbbbd

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Companies

Neimeth Pharmaceuticals to raise N5 billion in additional equity

The Board of Neimeth is set to raise N5 billion additional equity upon the approval by shareholders of the company at the AGM.

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Neimeth Pharmaceuticals
The Board of Directors of Neimeth Pharmaceuticals has revealed plans to raise N5 billion in additional equity upon approval by shareholders of the company.
The information was contained in a press release published on the NSE and signed by the Company Secretary, Mrs. Florence Onhenekwe.

The disclosure is part of the resolutions reached at the Board of Directors meeting of 15th January 2021. At the end of the meeting, it was resolved that the company would raise additional equity to the tune of N5 billion.

In line with this development, a board resolution proposing to raise equity will be presented at the Annual General Meeting of the Company scheduled to hold on 9th March 2021.

What you should know

  • The Board of the Company is yet to disclose if the additional equity would be a rights issue or a private placement, as the details of the additional N5 billion equity set to be raised are yet to be finalized.
  • The fund will help the company’s management to execute key strategies that will reposition the company as a leader in the healthcare industry, with the hope to deliver better returns on investment to shareholders.
  • The additional equity financing will also increase Neimeth’s outstanding shares, which will dilute earnings and impact the Company’s stock value for existing shareholders.
  • The move has the potential to trigger a sell-off of the company shares on the Nigerian Stock Exchange.

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Coronavirus

Covid-19: WHO warns the world faces catastrophic moral failure due to vaccine nationalism

The WHO has said that the prospects of equitable distribution of COVID-19 vaccines were at serious risk.

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Dr Tedros Adhanom, Head of the World health organization (WHO), COVID-19

The World Health Organization (WHO) said the world is on the brink of a catastrophic moral failure due to the fear of Covid-19 vaccine nationalism by the wealthy countries, while the poor countries are left behind.

This is as the UN health agency revealed that the prospects of equitable distribution of the vaccines were at serious risk just as its COVAX vaccine-sharing scheme plans to start distributing inoculations in February.

According to a report from Reuters, this disclosure was made by the Director-General of the WHO, Tedros Adhanom Ghebreyrsus, at the opening of the body’s Annual Executive Board virtual meeting.

He pointed out that 44 bilateral deals were signed last year and at least 12 have already been signed this year.

What the WHO Director-General is saying

Tedros warned against vaccine nationalism to avoid making the same mistake during the HIN1 and HIV pandemic.

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The WHO boss in his statement said,

  • This could delay COVAX deliveries and create exactly the scenario COVAX was designed to avoid with hoarding, a chaotic market, an uncoordinated response and continued social and economic disruption. Such a ‘me-first approach’ left the world’s poorest and most vulnerable at risk.
  • “Ultimately, these actions will only prolong the pandemic, countries should avoid making the same mistakes made during the H1N1 and HIV pandemics.’

He expressed his reservations over the ‘me-first’ attitude of the rich countries and the vaccine manufacturers who prioritize going for regulatory approval in wealthy countries rather than submitting their data to WHO for approval of the vaccines for use globally.

The global scramble for shots has intensified, as more infectious virus variants circulate.

Tedros said more than 39 million vaccine doses had been administered in 49 higher-income countries, whereas just 25 doses had been given in one poor country.

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Observers say this board meeting, which lasts until next Tuesday, is one of the most important in the U.N. health agency’s more than 70-year history, and could shape its role in global health long after the pandemic ends.

What you should know

  • The WHO and health experts had severally warned against nationalism as a serious threat to the fight against the coronavirus pandemic.
  • They had called for an equitable distribution of the Covid-19 vaccine amongst all countries globally, as the wealthy nations will still be at risk of the pandemic if the poor countries are still battling with the disease.

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Energy

LPG: Nigerians paid more to refill 12.5kg gas cylinders in December

Nigerians paid more money to refill their 12.5Kg gas cylinder in December than they did in November 2020.

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Prices of Kerosene, Cooking Gas and Diesel

The average price for refilling 12.5kg cylinder of liquefied petroleum gas (LPG) increased by 1.75% in December compared to the month of November, according to the NBS report for December 2020.

The average cost of refilling the 12.5kg gas cylinder moved from N4,082.97 in November to N4,154.28 in December 2020.

According to the NBS report, the average price for refilling a 5kg cylinder of cooking gas increased by 0.12% month-on-month to N1,949.75 in December 2020 from N1,947.47 in November 2020.

Key highlights

  • Bauchi (N2,489.12), Borno (N2,396.69) and Adamawa (N2,392.88) recorded the highest average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas in the month of December 2020.
  • Enugu (N1,563.75), Imo (N1,678.89) and Oyo (N1,691.67) recorded the lowest average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas.
  • Delta (N4,838.46), Cross River/Sokoto (N4,800.00) and Akwa Ibom (N4,614.49) recorded the highest average price for the refilling of a 12.5kg cylinder for Liquefied Petroleum Gas.
  • While, Kaduna (N3,191.67), Zamfara (N3,462.50) and Niger (N3,500.00) recorded the lowest average price for the refilling of a 12.5kg cylinder for Liquefied Petroleum Gas.

LPG is fast becoming an alternative to firewood and kerosene as a means of cooking for most homes especially in urban areas in Nigeria. LPG is cleaner and more efficient than kerosene in cooking.

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LPG should be made much more available and affordable to reduce the cost of living for most Nigerians.

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