Following the devastating effect of the COVID-19 pandemic on businesses globally and locally, the Philips Consulting CEO Report has forecasted August 2021 normalcy for business environment in the country to fully activate and operate optimally.
Phillips Consulting Limited recently engaged 100 Nigeria business leaders on the current economic landscape and presented the insights in its “CEO Report”, which stated that 57 per cent of CEOs expect that the earliest possible time for the business environment in Nigeria to normalize will be August 2021.
According to the report, CEOs are increasingly taking responsibility for their companies, and are not necessarily looking up to the government for solutions to the problems occasioned by the pandemic.
For a greater awareness on political leadership in the country, the survey showed that as against the 79 per cent CEOs who voted in the 2019 general elections, only 67 per cent CEOs have reported that the pandemic would make them more interested in the outcome of the 2023 election.
Speaking on the CEO Report, Philips Consulting’s CEO. Rob Taiwo said, “Results from our survey showed that the Nigerian government and business leaders should pay close attention to the post-COVID19 policies and strategies of the United Kingdom, China, and the United States of America as these will have the most profound impact on the Nigerian business environment.”
He said, “At pcl., we are committed to working with our clients and partners to build and develop people’s capabilities, technology systems and processes, effective and robust strategies, and business continuity plans. Let us work with you to future proof your business in the next normal.”
On managing money matters, Taiwo said, “Our 2020 Mask in the Air report states that “the most significant impact of COVID-19 is the restriction in movement, having its direct and detrimental impact on the local and global aviation industry”.
An already bleeding hospitality industry will experience slow recovery, as 68 per cent of CEOs identified travel and tourism as their number one cost-cutting area. 55 per cent of companies are considering reducing staff allowances and bonuses, while 40 per cent and 30per cent will cut rental costs and staff training respectively.
On the matter of fiscal adjustments, only 22 per cent of CEOs have laid off staff, as most of them found proactive ways to keep their workforce engaged and economically productive. However, due to reduced cash flow, 46 per cent of companies had to roll out pay cuts for their workers. The decision to employ pay cuts rather than termination as a cost reduction strategy is advisable to ensure that culture is not diluted, talent is retained, employees are not demotivated, and the company projects an excellent corporate image, the report highlighted.
The report also highlighted challenges facing the real estate industry in Nigeria and posited that the industry may be the worst hit among others. In the report, 84 per cent of CEOs agree that the real estate industry, especially companies in the business of office rentals, will be badly hit by this disruption.
About 83 per cent and 55 per cent of CEOs adopted a Work From Home Strategy and Standby Model Strategy respectively, and are beginning to question the need for large office spaces. Only 46 per cent of CEOs are considering retaining their current offices, while others will seek smaller and cheaper offices, shared offices, or adopt an entirely virtual working model.
In commercial cities like Lagos where massive high-rise office complexes are commonplace, real estate players must be ready for a shift in demand. They might be forced to repurpose their buildings or provide new services to suit the new mode of work.
Speaking on which industries benefit from the crisis, Taiwo, a transformational leader said, “Globally, the IT sector experienced a surge in the wake of the pandemic, as a result of the shift to remote working. This resulted in a heavy reliance (or dependence) on IT products for both personal and business purposes.
Nigeria is no exception, he stated, “From our survey, 86 per cent of CEOs reported that the pandemic led to them improving the IT infrastructure of their organizations. Our respondents predict that Nigeria’s healthcare, agribusiness, and manufacturing industries stand to benefit from the next normal.”
“They expect the professional services industry to experience comparatively minimal disruption. This is primarily due to their vast array of services, relatively low operational expense, lean and agile business model, and legacy clients.”
On the levels of preparedness for the pandemic, the Report said, only 6 per cent of CEOs reported that their organizations were prepared for the pandemic. Hence, it comes as no surprise that 55 per cent of Nigerian businesses are currently operating below 50 per cent of their operating capacity.
The 6 per cent mentioned above stated a strong leadership team as the most critical factor of their preparedness. Other important factors include having a robust business continuity plan, government support, and a well-articulated business strategy.
On forging ahead into the next normal, the CEOs Report revealed that 57 per cent of CEOs expect that the earliest possible time for the business environment in Nigeria to normalize will be August 2021.
CEOs are increasingly taking responsibility for their companies, and are not necessarily looking up to the government for solutions to the problems occasioned by the pandemic. As against the 79 per cent of CEOs that voted in the 2019 general elections, only 67 per cent of CEOs reported that the pandemic would make them more interested in the outcome of the 2023 election.
Taiwo said, “Results from our survey showed that the Nigerian government and business leaders should pay close attention to the post-COVID19 policies and strategies of the United Kingdom, China, and the United States of America as these will have the most profound impact on the Nigerian business environment.