At a period when economic activities are slowing down, businesses need to stop burning cash and start accumulating as much cash as possible to serve as a buffer through this Coronavirus outbreak.
The following are ways start-ups could reduce spending:
- Cut personnel cost: Personnel costs for most businesses account for up to 50% of total expenditure. Attacking this line item becomes very critical for cost-cutting in any organization. I think non-essential staff should be put on temporary leave with a 50% pay cut while essential staff must work from the home network of their transport and feeding allowance which may shave off up to 25% of their salary.
- Halt all capital projects: Times of uncertainty are the worst times to burn up cash building capital projects. Most capital projects are developed using debt and debt servicing at this time when businesses are shut will be very difficult. For businesses that fund capital projects with equity, the money will be better spend ensuring work tools for Work From Home policy is available for essential employees.
- Restructure your debt with your bank: Even though you may have the cash to repay your loans this month, it’s best you start talking to a bank to restructure your loan and possibly suspend the payment of principal and interest for the next 3 months. Banks have been given a go-ahead by CBN for regulatory forbearance for customers in sectors who may see their businesses significantly impacted by a coronavirus. If your bank is willing to restructure your loans, it could free up more capital for you in this tough business period.
- Stop recruitment and hiring: This is the absolute worst time to be hiring. Maximize your team and be quick to fire weak links in this period. Suspend all forms of hiring except it is critical for business continuity.
- Adjust your sales price to reflect the new business environment: While price gouging to take advantage of the coronavirus is bad, business survival is critical and prices must reflect the new reality for many businesses. Rising inflation, naira devaluation and difficulty in commuting which triggers higher logistics cost are some of the reasons businesses should consider increasing the price of their products and services to cover for rising cost across some big line items in their financials.
- Keep your eyes open for intervention funds: It’s important for businesses to seek government intervention funds that support SMEs. The fund could be the difference in many businesses staying afloat in this difficult time.
COVID-19 Update in Nigeria
On the 21st of September 2020, 195 new confirmed cases and 2 deaths were recorded in Nigeria.
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 57,437 confirmed cases.
On the 21st of September 2020, 195 new confirmed cases and 2 deaths were recorded in Nigeria, having carried out a total daily test of 1,162 samples across the country.
To date, 57,437 cases have been confirmed, 48,674 cases have been discharged and 1,100 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 480,874 tests have been carried out as of September 21st, 2020 compared to 479,712 tests a day earlier.
COVID-19 Case Updates- 21st September 2020,
- Total Number of Cases – 57,437
- Total Number Discharged – 48,674
- Total Deaths – 1,100
- Total Tests Carried out – 480,874
According to the NCDC, the 195 new cases were reported from 11 states- Enugu (51), Gombe (40), Lagos (39), Plateau (23), FCT (15), Rivers (12), Kaduna (8), Ondo (3), Bauchi (2), Edo (1), Ogun (1).
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 18,982, followed by Abuja (5,566), Oyo (3,254), Plateau (3,231), Edo (2,612), Kaduna (2,356), Rivers (2,255), Delta (1,799), Ogun (1,767), Kano (1,734), Ondo (1,600), Enugu (1,285), Ebonyi (1,038), Kwara (1,025), Abia (881), Katsina (848), Gombe (839), Osun (817), Borno (741), and Bauchi (691).
Imo State has recorded 562 cases, Benue (473), Nasarawa (448), Bayelsa (394), Jigawa (322), Ekiti (317), Akwa Ibom (288), Niger (254), Adamawa (234), Anambra (232), Sokoto (161), Taraba (95), Kebbi (93), Cross River (85), Zamfara (78), Yobe (75), while Kogi state has recorded 5 cases only.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.
AfCFTA: Nigeria securing approval to ratify agreement – Trade Minister
The Minister revealed that Nigeria has set up a National Action Committee on AfCFTA.
Minister of Trade, Niyi Adebayo said Nigeria is currently in the process of securing approval to ratify the African Continental Free Trade Area (AfCFTA) agreement soon.
The Minister disclosed this during a meeting with the Secretary-General of the African Continental Free Trade Area(AfCFTA), Mene Wamkele on Monday.
During the meeting, the Honourable Minister informed him that Nigeria has established … pic.twitter.com/vSDnNqcfmE
— FMITI Nigeria (@TradeInvestNG) September 21, 2020
Recall that Nairametrics reported last week Mr. Adebayo said that Nigeria is actively working to attract more foreign direct investments into key industries to meet the demands of the African Continental Free Trade Area (AfCFTA).
“As we gear up to meet the demands of the enlarged continental market which will be fostered by AfCFTA, we are actively working to attract more foreign direct investments into key industries,” the Minister said.
In today’s meeting, The Minister told the delegation that Nigeria has set up a National Action Committee on AfCFTA, which would implement Nigeria’s roll-out strategy in a bid to take advantage of the agreement. He added, “Nigeria is currently in the process of securing approval to ratify the agreement within the shortest possible time”.
The African Union announced in August that the first commercial deal of AfCFTA will be taking off on January 1, 2021.
FG inaugurates Committee on the Commercialization of the Nigeria Film Corporation
The Minister said that the FG is repositioning the NFC for effective service delivery.
The Federal Government inaugurated a Steering Committee on the Commercialization of the Nigeria Film Corporation (NFC), with the aim of making Nigeria’s film industry a continental entertainment power.
This inauguration was performed by the Minister of Information and Culture, Alhaji Lai Mohammed in Abuja on Monday. The Minister added that the FG is repositioning the NFC for effective service delivery.
“What we are doing today is to simply reposition the NFC in a manner that will enable it to play the role statutorily assigned to it,” he said.
The Minister added that Nigeria’s film industry is a major boost for Nigerian soft power and entertainment, citing the need for repositioning by the FG as a means to enable effective service delivery for the film industry to grow.
The Minister added that Nigeria lags behind her film making counterparts in the film production value chain, citing Nigeria’s 142 movie theaters compared to 782 in South Africa and 11,209 in India and many others. He urged state governments to invest a part of their infrastructure budgets for the entertainment industry as a means to generate jobs and grow the GDP.
“It is important to appeal, especially to our state governments, to invest in infrastructure in the industry. I don’t think it will be too much for the state governments to ensure they build at least one cinema house in each local government area of their state. That will give us additional 774 cinema houses, ” he said.
The Minister added that the role of the NFC is to regulate Nigeria’s film industry and organise professional practice in the sector and also addressed challenges facing the NFC like the inability to produce its own films for commercial purposes due to the law establishing the Corporation limits on its operational functions.
Lai Mohammed said the NFC will be repositioned as the FG has engaged the services of a Business Development Consultant to conduct due diligence on the corporation and the sector and recommend a strategy that is suitable for its reform and commercialization.
“Dear members of the SC, your appointment into this committee comes with huge trust and belief in your ability and capacity to make this reform happen. I therefore urge you to consider this a critical national assignment that requires unflinching commitment and zeal,” he stated.
The members of the Steering Committee are: Honourable Minister, Federal Ministry of Information and Culture, Alhaji Mohammed as Chairman; Permanent Secretary, Federal Ministry of Information and Culture, Deaconess Grace Isu-Gekpe; Director-General, BPE, Mr. Alex Okoh; Managing Director, NFC, Dr. Chidia Maduekwe, and Director, Industries and Communications, BPE, Abdullahi Dikko, as Secretary.