The coronavirus (COVID-19) is a highly infectious disease which was first discovered in Wuhan China in 2019 and has been declared a global pandemic due to its ravaging impact across continents of the world. The COVID-19 pandemic has been described by the United Nations Development Programme (UNDP) as the defining global health crisis of our time and the greatest challenge we have faced since World War Two. From the health sector to aviation and transport, tourism and hospitality, education, business, recreation, oil & gas, real estate and manufacturing, the pandemic has continued to cause grave impacts with resultant grave consequences. The statistics as of May 19, 2020, showed a total number of 4,971,499 cases with 324,115 reported deaths globally. In Nigeria, the number of reported cases as at the same date was 6,175 with 191 deaths, and the number keeps multiplying daily at an alarming rate.
Lagos, Abuja and Ogun were on lockdown with no movement from March 30, 2020, following an order from the President of the Federal Republic of Nigeria, Gen. Muhammadu Buhari and also, most state governors keyed into this order and declared a lockdown on their various states as a significant containment strategy. The lockdown generated tension and impacted on the economy, leading the government to relax the lockdown and allow some level of movement, though this poses considerable risk of increased infection if not properly managed.
Businesses responded differently to the challenge posed by the COVID-19 pandemic with some showing some level of adaptability and survival instinct while others may be affected too severely to recover.
PUNUKA Attorneys & Solicitors recently surveyed its clients to understand some of the challenges they have faced within the period and their strategies for business continuity. The following were the outcome of the survey.
We sought to know if they were able to achieve remote operation by leveraging on technology to work remotely and 70% of the respondents confirmed their ability to achieve remote operation, while 30% responded in the negative. We also sought to know if those who could work from home using technology had any challenge achieving that and also asked those that could not operate remotely to provide a reason for that situation.
6% stated lack of knowledge about collaboration tools for remote operation, 12.5% said they lacked the technical skill to drive the process, and this was closely related to the 19% that said they were yet to have the training on use of collaboration tools. 38% respondents stated they could not conduct their businesses virtually, 12.5% said the problem was due to IT implementation challenges, 6% had assets frozen and business premises sealed, and 6% stated budgetary/financial constraint as their significant challenges.
We also asked the respondents to provide information on challenges they faced marketing of their goods/services and obtained the following responses:
- Reduced commercial activities
- Recording activities halted. Producers like to record with artists in the studio
- Recoveries and litigation difficult in a lockdown
- Logistics challenges
- Developing new strategies expensive at this time
- Network challenges
- Challenges with the physical product presentation
- Technical efficiency challenges
- No set policies to tackle the challenges of this time
- Deduction in oil prices
Our question on willingness to explore online marketing of products or services revealed that majority of the respondents were willing to explore the opportunity as 93% responded in the affirmative. On commercial contracts and credit line issues, 42% responded to have current and impending commercial contract issues while 17% stated they have credit line obligations falling due soon. We also asked a related question on whether the respondents were having challenges meeting obligations to creditors and we had 42% respond in the affirmative, 50% were yet to be confronted with the challenge while 8% were not sure.
The following were feedbacks from the respondents on proactive steps taken to manage the situations:
- Willingness to discuss with customers and reschedule repayment
- Discussion was on-going
- Engage lenders and reach a mutually acceptable settlement
- To seek legal opinion
- Restructure facility
- Seek and act on legal advice
- Explore CBN funds available
- Engage creditors for the possibility of revising the terms
- Manage the situation by giving notice to the creditors of the possibility of the pandemic impeding fulfilment of the repayment obligation.
Further, we asked the respondents about their strategy for managing any impending liquidity crisis, and from the responses, 60% were yet to put any measure in place to manage any liquidity crisis.
When asked how they were managing account receivables and their strategies to recover business debts, the following were some of the responses:
- Continuous engagement with customer sand willingness to reschedule payments in line with their projected cash flow of the customers
- None so far
- Consistent follow up through phone calls, SMS and emails
- Discussion on-going
- Putting structures in place to deal with the issue
- Most of the receivables trapped because of their inability to conclude contracts
- Staggering payments and constant follow up on debtors
When asked about strategies for staff engagement and management over the COVID-19 pandemic, 40% of the respondent had taken no steps, and 60% had had some discussion with their staff. It is noted that this survey took place in March 2020.
Some of the steps already taken on employees by some respondents were as listed below
- Employees working from home
- Employees asked to take their leave during the lockdown
- Still paid full salary
- Strategic reviews on-going
- No work, no pay policy in place
- Employees empowered to work remotely
- No remuneration changes
We asked the respondents if they were aware of the government interventions and stimulus packages to assist SMEs and households, and 85% responded in the affirmative while 15% were yet to be aware. 60% of the respondents also informed they needed support to take advantage of the stimulus package.
In conclusion, we note that the emergence of the Covid-19 pandemic had changed the way the respondents worked and did things. It may seem scary to some, but it is the new normal and rather than live in denial, it is pertinent that company owners and managers design and follow a strategic path that will ensure they are not left behind in the scheme of things. It is important to emphasise that the primary drivers for this new normal are leader and technology. Be prepared, therefore, to leverage on technology to remain relevant and continue to provide your goods or services to your target market at even a much higher level than you ever did.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.