The Nigerian Economy Post-COVID-19: Where Are the Opportunities and Challenges?

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Monday, June 21, 2021 / 08:50 PM / by Bode Agusto / Header Image Credit: WebTV

 

Being text of presentation made by Bode Agusto to the alumni of Cranfield University in Nigeria On 19 June 2021

 

Macroeconomic environment will remain tough!

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These are the harsh realities over the next few years!

 

But there are opportunities!

In the mass market e.g.

  • Food & drink
  • Personal Care Products
  • Voice & data
  • Transport
  • Settlement of transactions (Payment systems)

 

In the niche market e.g.

  • Healthcare
  • Education (primary & secondary)
  • Compliance services (e.g. audit, tax)

 

There are also opportunities to...

  • employ "cheap" labor
  • borrow money at subsidized interest rates
  • earn hard currencies by exporting
  • raise capital at valuations that bear little relationship to earnings

 

But there are challenges!

  • Competition for the share of wallet of consumers with falling purchasing power
    • Which means that your product or service must be considered a necessary in the mass market

 

  • Rising cost of materials
    • Which means you should try and source materials locally provided source is reliable and price is competitive

 

  • Growing insecurity
    • Which means you should redefine "where to play" and if you must play in less secure areas consider working remotely and/or insurance

 

  • Rapidly devaluing NGN
    • Which means you should not owe hard currencies (USD, GBP, Euro, RMB, Yen)
    • It also means you should try and export some of your goods and services and earn hard currencies

 

Finally you...

  • Can you use technology to scale and customize your products or services?
  • Label yourself a tech company
  • Value your equity in USD, based on your business model and potential earnings
  • Become successful if potential becomes reality

 

About the Author:

Mr. Olabode Mubasheer Agusto, founder of Nigeria's leading ratings agency Agusto & Co. Limited, has public and private leadership experience spanning over 30 years including PriceWaterhouse, Nigeria International Bank,  Director of the National Pension Commission, Member of the Central Bank of Nigeria Monetary Policy Committee and Director-General of the Budget Office of the Federation. Mr. Augusto is a fellow of the Institute of Chartered Accountants of Nigeria. Bode Agusto


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