For every Small and Medium Enterprises (SMEs) that want to survive the coronavirus pandemic, it is essential for them to source raw materials locally, Ugodre Obi-Chukwu, the founder of Nairametrics, has advised.
This is particularly essential as the foreign exchange will remain volatile for a long while after the pandemic, affecting businesses that depend on imported materials for their productions.
Ugodre suggested this while speaking during an Instagram live session with Ore Ajayi of United Capital Plc, themed “Hedging your business with the right investments post-COVID-19.”
According to Ugodre, the volatility of the foreign exchange could lead to increased costs of productions for businesses, making it even more difficult for them to retain their market share in an economy that is battling a COVID-19 induced depression.
“Before COVID-19, we were in a difficult position as a country. Government revenue was down. Oil prices had started falling from late 2019. We had an economy where the government could not fund the budget and had to resort to borrowing,” he explained.
Ugodre suggested that the purchase of foreign exchange could be explored, but investment in dollar assets, foreign stocks and bonds would be better options to help businesses cushion the impact of rising inflation and depreciation of the naira. Ugodre, however, placed a caveat:
“While keeping a healthy mix of dollar and naira assets, try not to buy foreign exchange above 20% premium of the official price. This gives you enough room to protect your funds and reduce risks.”
Renegotiate loans and stay liquid
As things get tougher in post-COVID-19, it will become expedient for businesses to stay liquid and set aside some funds for emergencies.
Ugodre advised SMEs to consider renegotiating loan repayment terms with bank partners so that the facilities are not repaid at the expense of staying afloat.
He also suggested that SMEs could approach commercial banks, or the Bank of Industry for loans to keep them afloat, at reduced interest rates.
Use tech-driven investment platforms
At a time when the world is gravitating towards technology, SMEs must consider tech-driven investment platforms to run and manage their investments.
Responding to the question of platforms to explore, Ore Ajayi, the session host, noted that SMEs and individual investors have to move from looking for walk-in investment platforms and explore digitally-driven platforms.
“You must leverage technology for your investment needs. Platforms such as Invest now, which is powered by United Capital, could be a great one to leverage on at this time,” he said.
Investments to look out for
Ugodre emphasized also that as the business owners try to hedge their businesses with investments, they must look out for risks, returns on investments, time-frame of investments, and background of the issuers.
“Tread carefully in your investments. Picture the world 10 years from now, and imagine what businesses would look like then. Let that guide your investments. Those who identify this are those who will win,” he stated.
Breaking: COVID-19: Buruji Kashamu is dead
Kashamu’s demise was announced by a former lawmaker-friend and party member on Twitter.
Senator Buruji Kashamu has died on Saturday.
Buruji, who was a member of the 8th Senate, died of COVID-19 at the First Cardiology Consultants, Lagos.
This was disclosed by Senator Ben Murray-Bruce via his Twitter handle.
I have just lost my good friend of forever to #COVID19. Until his death, Sen. Buruji Kashamu and I were inseparable. He died today at First Cardiology Consultants, in Lagos. May his gentle soul rest in peace. I pray his family and loved ones the fortitude to bear this heavy loss. pic.twitter.com/OJGIt0VK3n
— Ben Murray-Bruce (@benmurraybruce) August 8, 2020
Details soon …
Ogun State initiates tax relief scheme to cushion effects of COVID-19
Governor Abiodun urged taxpayers in the state to make use of the relief packages.
The Ogun State Government has announced that its Internal Revenue Service would launch tax relief packages to cushion the economic effects of the COVID-19 pandemic on taxpayers in the state.
This was announced by the State Governor, Prince Dapo Abiodun, on Saturday morning through a statement that was issued via his official Twitter handle.
Governor Abiodun urged taxpayers in the state to make use of the relief packages which include a 6 month extension of the 2019 income tax returns deadline for self-employed residents from March 31, 2020 to September 30, 2020.
He also granted an “8-month extension of filling of 2019 annual PAYE returns by PAYE operators/tax agents from January 31, 2020 to September 30, as well as complete waiver of interest and penalty for late filling for the extension period.”
I have approved certain tax reliefs to be immediately effected by the Ogun State Internal Revenue Service towards cushioning COVID-19 economic effects on our taxpayers. These include: pic.twitter.com/SIyEBt26G4
— Prince Dr. Dapo Abiodun – MFR (@dabiodunMFR) August 8, 2020
Other packages include a total waiver of interest and penalties for late remittances of PAYE for the extended period, and a waiver for late payment of Personal Income Tax, which would run from January 1, 2020 to December 31.
Finally, the state granted a waiver on weekly tax payments by operators of betting and pool businesses from April 1 to June 30, 2020.
The Governor said that the state’s Tax Audit Reconciliation Committee (TARC) would run its operations through video conferencing to “continue ensuring ease of doing business while maintaining physical distancing.
COVID-19: World Bank approves $114 million response funds for Nigeria
FG is expected to provide grants from the CoPREP to the 36 states and the FCT.
The World Bank has approved the sum of $114 million to assist Nigeria in its fight against the coronavirus pandemic.
The fund is to help Nigeria prevent, identify and respond to the dangers associated with the coronavirus disease with special focus on the various states and the Federal Capital Territory.
This was disclosed in a statement from the bank on Friday, August 7, 2020.
According to the statement, the funds come in the form of $100 million credit facility from the International Development Association (IDA) and $14 million grant from the Pandemic Emergency Financing Facility.
It also states that the Federal Government is expected to provide grants from the COVID-19 Preparedness and Response Project (CoPREP) to the 36 states and the Federal Capital Territory.
The World Bank Director for Nigeria, Shubham Chaudhuri, in a statement on Friday, said, “Nigeria has ramped up its efforts to contain the Covid-19 outbreak, but more needs to be done at the states level, which are at the front line of the response.”
He disclosed that the project would provide the states with the much needed direct technical and fiscal support in order to strengthen their position in the fight against the pandemic.
The World Bank Chief also pointed out that the project would finance federal procurements of medical equipment, laboratory tests and medicines to be distributed to the states based on their needs.
According to the World Bank, CoPREP would finance further support to all the 36 states and the FCT through the NCDC to implement the COVID-19 Incident Action Plan.
Nigeria has recorded about 45,687 confirmed cases of the coronavirus disease with 936 fatalities and 32,637 people discharged as at August 7, 2020. Some serious concerns have been raised about the country’s testing capacity, which though has improved is still regarded as inadequate.