Business Leaders Give Survival Recipe At BCI Forum

Business survival in the midst of the economic challenges and uncertainties was the focus of the seminar held for captains of industry and business leaders by the Business Club Ikeja recently.
Guest Speaker and the Director General of Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, said businesses must consider the reality of changing business and economic landscape, the context of current economic conditions, global trends in corporate governance, global and domestic risk outlook; and adopt workable strategies for survival.

Yusuf, a renowned Economic Analyst and former Director General of Lagos Chamber of Commerce and Industries, said the theme of the lecture, “Adapting to a rapidly changing economic environment” was apt and timely because several businesses are going down due to the socioeconomic malaise prevalent in both the local and global space.

He said the Nigerian situation is not all gloom and doom because there is silver lining if businesses could be strategic and adaptive. “As bad as things are, some people are leaving the country and some are coming, it depends on the kind of strategies you are using to deal with the prevailing economic situation,” he said.
He said: “In every situation, there are challenges and opportunities. Our business models cannot afford to be static in a dynamic and sometimes volatile environment.

Therefore, to ensure business resilience, domestic and global economic trends must shape or influence the character of our business and corporate strategies without compromising the core values of our business organizations. Business models must be fit for purpose.”
The diverse factors shaping the context of business operations, according to him, include the macro-economic environment especially the volatility of critical economic variables such as the sharp depreciation in the exchange rates, the liquidity issues in the official forex, the spike in energy prices, high interest rates and the galloping inflation as well as the security situation.

“Other factors are market disruptions mainly by competition, technological disruptions, geopolitical development, emerging economic nationalism and protectionism, global economic fragmentation, supply chain disruptions, the changing nature of work and climate change. These are the realities that impact our business directly or indirectly.”
The quality of regulatory institutions, the regulatory environment, the infrastructure, the political and cultural environment which business leaders need to regularly reckon with must be incorporated into corporate strategies.
He said smaller businesses adapt faster because of flexibility and when a business is too big, it takes a lot to adjust because they have Standard Operating Procedure, they have template which sometimes come from headquarters abroad whereas the local situation is evolving by the day.
Yusuf noted that the current government is contending with a legacy of weak macroeconomic fundamentals namely currency depreciation and volatility, high fiscal deficit, low revenue, unsustainable debt levels to revenue ratios, declining reserves which they inherited.
He said: “Evidence of deteriorating macroeconomic conditions did not fully manifest before the exit of the previous administration. But the reality is that the economy was already in a floundering mode. The current reforms were designed to correct the legacy of economic distortions and the deteriorating economic fundamentals. Regrettably, the reforms had come with enormous pains: high energy costs, acceleration of food inflation at about 30% and surge in transportation costs. But the truth is that these reforms were necessary to pull the economy back from the precipice.”
Other things businesses need to watch out for in 2024 and beyond, according to him, include geopolitical uncertainties such as rivalry among countries and competition, cybercrime and cyber security, natural disasters, large scale migrations, availability and affordability of food supplies, rising inflation and climate change.

In formulating workable strategies, business owners, directors and managers must embrace critical elements such as artificial intelligence and the values it is bringing to business, talent retention policy and career development for the workforce, and leadership and succession plan.
They must also manage exposure to forex, because it has brought down many businesses. “They should explore equal substitution options and avoid offshore debt financing, reduce commercial bank credit; go for intervention funds development financing.”
He said apart from opportunity for import substitution, the current forex regime could boost sectors like the hospitality industry, the Education sector and the medical sector because people would begin to interact with the sectors locally instead of spending forex.
President of Ikeja Business Club, Chief Tajudeen Akande, in his welcome address, advised businesses to seek the opportunities in the budget rather than do wholesale criticism. “The budget gives you the direction where there is soup, where there is bread and butter.”
He, however advised the government to think through policies in a way to create an enabling environment for businesses to thrive.

Policy reversal or adjustment in a business environment creates distortions, according to him.
He said: “When a policy is introduced, the government must be patient enough for it to mature. An emotional reaction of reversing yourself within a few months doesn’t help anybody.
“If they think through any policy before it is introduced, you would have predicted the likely reactions. And once you predict that such a policy would have contained measures to cope with the headwind and turbulence, you think of an alternative.”
Akande, a former President of Lagos Country Club, said BCI was founded in 1991 by business entities around Ikeja to serve the business interests of the community, corporate bodies and organizations across board like manufacturing, financial services, professional services, telecoms and business enterprises.
He said the formative period was shaped by the visionary leaders including its first President Dr. Christopher Kolade who worked assiduously to achieve collective vision that is yielding results today.
The business club has since been contributing to Corporate Nigeria and the country through debates, business and political engagements and other public discourses that verge on exchange of strategic ideas.