Every entrepreneur operating in the Nigerian economy are currently battling high inflation rate, inappropriate foreign exchange policy, high foreign and domestic debts and many other hurdles.
But financial and economic experts, who spoke with Nairametrics on Navigating Nigeria’s Macroeconomic Environment for Business Growth, have said that entrepreneurs cannot control the macro-economic environment but operate within it.
According to them, all these challenges have created low demand for goods and services, rising unemployment, the rising cost of production and uncertainty in investment opportunities.
What experts are saying about entrepreneurs’ survival
Dr Sola Lawal, an expert in Risk Profiling, explained that a business cannot control the macro-economic environment in Nigeria but can only operate within it, as the prevailing high inflation rate, inappropriate foreign exchange policy, high foreign and domestic debts will continue to hamper the growth of businesses except a drastic step is taken by the government.
He said, “These challenges had created problems like low demand for goods and services, rising unemployment, the rising cost of production and uncertainty in investment opportunities.
“Entrepreneurs need to pursue sound macroeconomic policies because the extent to which policymakers can establish a track record of policy implementation will influence private sector confidence, which will, in turn, impact upon investment, economic growth and individual prosperity.”
While the immediate past Director-General, Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, agrees with Lawal about working around macroeconomic issues, he expects entrepreneurs to come up with flexible management approaches on cost reduction, supply chain strategy and innovations.
He said, “Businesses must come up with a flexible management approach to keep tight control on cost, review non-revenue generating areas of business, supply chain strategy, innovation and creativity and risk management matrix.
“The decision-making should be evidence-based, data-driven, avoid getting into panic mode and adopt a competitive strategy, including offering the lowest possible price in the market and bulk purchase of inputs and raw materials.”
To survive turbulent times, Wale Adeoye, an Auditor and a Financial expert, said business owners must keep their focus on people, strategy, execution, digital and cash.
He asked, “Are you considering going digital? Are employees, customers, shareholders happy and engaged in the business? And would you “rehire” all of them? Can you state your firm’s strategy simply? And is it driving sustainable growth in revenue and gross margins?
“Are all processes running without drama and driving industry-leading profitability? Do you have consistent sources of cash, ideally generated internally, to fuel the growth of your business?”
He added that the inconsistent forex policy had caused severe shocks to businesses as those “with import exposure are under extreme pressure because of currency depreciation. Costs have gone up; demand remains weak. Margins are being rapidly eroded. Many businesses have lost foreign credit lines following defaults in foreign payment obligations, resulting from forex liquidity problems.”
While economic downturns tend to affect everyone in some way or another, business owners seem to always bear the brunt of it. To survive, the above-discussed steps are as advised by experts should be considered.