I recently saw the movie 'Tenet' about a secret agent who was given a single word as his weapon and sent to prevent the onset of World War III. He had travel through time and bend the laws of nature in order to be successful in his mission.
As
the year of ellipsis 2020 winds to a gradual end, as is customary at the time
of the year one begins to take stock of the events that have brought gains and losses.
While many analysts and pundits have always tried to come up with perspectives
for the new year in prior times, many had guessed the year 2020 would be one of
slower growth for the Nigerian economy, as the global economy was tipped for a
3.3% growth in 2020. It was a 'no brainer ' to understand that with slower
hydro carbon sales and lower prices, there was bound to be hiccups in Nigerian
being a mono product and import dependent economy. Some prepared for
devaluation. increase in taxes, inflation etc, but no one expected a Pandemic
that would throw the world economy and send most markets tumbling and
disrupting many business models.
With
a redistribution of wealth imminent and a restructuring of the world order,
Companies like Amazon,and Tesla have blazed the trail making Jeff Bezos and Elon Musk the world’s
richest and their companies record setters. Governments around the world were
forced in a chain reaction to impose lockdowns in many cities hoping to nip the
transmission of the COVID-19 Virus in the bud. We are now fully in the age of
DISRUPTION.
Zoom
Video Communications, an American
communications technology company headquartered in San Jose, California
providing video telephony and online chat services through a cloud-based
peer-to-peer software platform and used
for teleconferencing, telecommuting, distance education, and social relations,
reported third quarter total
revenue of $777.2 million, up 367% year-over-year, number of customers
contributing more than $100,000 in TTM revenue up 136% year-over-year,
Approximately 433,700 customers with more than 10 employees, up 485%
year-over-year.
Basically,
the company’s revenue outlook takes into consideration the sudden huge demand
for remote work solutions for businesses. The lock down automatically
benefitted the company as many businesses needed to continue running as
seamlessly as possible turned to it,
For
companies like Amazon the Covid 19 could have been a God sent as the company
brought on more than 175,000 new warehouses and delivery workers between March
and mid-April to be able to fulfil customer orders. Amazon added
36,400 people in the three months ended June 30, bringing its head
count to 876,800, an increase of 34% year over year making the company worth
over $1trillion dollars and Mr Bezos the world’s richest man.
In
Nigeria, many of the known billionaires experienced a clean ‘hair cut’ in their
net worth largely as a result of devaluation and weaker consumer spending. Some
of which sprang from supply chain disruptions, and cross border restriction,
reduced cash inflows and liquidity challenges arising from significant downward
pressure on demand as people tried to halt spending and prioritize especially
with a lot of uncertainty. Businesses groaning under pressure had to adjust by
cutting spending, laying off workers and staying lean.
The
twin evil of the pandemic and oil shocks adversely affected the Nigerian economy
as consumer spending power weakened. Borrowers were unable to repay their loan
and this started to affect the NPL of banks. Banks reduced exposure to many
borrowers in attempting to salvage the situation. Oil prices which were
bench marked at $57 per barrel were now trading at $30 and had made the budget
obsolete. People were no longer travelling and driving automobile so the demand
for crude dropped and at a point in time Nigeria had vessels on the high seas
begging to berth with no buyers for weeks. Nigeria as an import dependent
country suffered as the global supply chain shut down. Ultimately the NSE
Nigeria Stock exchange lost N2.3 trillion when foreign investors pulled out their
funds and moved to US treasury securities in search of safety.
Access
bank Plc. (a Nigerian Bank) was one of the most vocal as the pandemic hit
Nigeria, Herbert Wigwe ( the Managing Director) in a video to all staff
explained the rationale behind the banks intention to shed weight and close
some branches, so as to increase its chances of survival. This may be construed
as accepting the disruption of the banking model in Nigeria which may have
implications for decades to come.
While
many established market players were groaning in pain especially in the real
sector, super markets, logistics and consumer giants saw an increase in their
revenue as people started to panic buy, stocking up in order to survive for a
long period at home.
Others
below the poverty line especially the daily wage earners such as mechanics,
Vulcanizers and other artisans, traders etc were left at the mercy of the
government and well-wishers. However, the CBN and some state governments
chiefly Lagos State in partnership with some prominent banks, and consumer
giants set up a COVID-19 palliative fund and proactively set up isolation’s
centers. In the midst of all these efforts there seemed to be some distribution
problems as the recipients majorly reported ‘audio gifts’ or paltry
distributions of rice in little hand cup portions.
These
thus lead to increased insecurity and crime rate with the advent of the 1 million
boys (armed robbers who stormed residences to unleash mayhem)
With
the phased re opening of the economy, these abated and businesses tried to
return to work but with most bankers working from home or shifts. (I guess the
banks have also been smart enough to save cost by embracing remote office).
In
all of these, the new economy is being born and some of the changes from the
way we live birthed by necessity, fear and the need for survival are being seen
in the medical world where health care is typically fragile and expensive.
Information asymmetry as an advantage by some players who now link patients to
doctors with the use of technology and tele-medicine, is creating a market
which intends to slice a niche off the traditional hospital visits and deliver
a customized experience in Nigeria.
Market
shopping for food stuff can now be done online on many sites similar to the
amazon style grocery home delivery, oke arin markets, many small businesses,
restaurants, pharmacies and others have resumed home delivery. This has
obviously increased the demand for logistic services and made it look attractive
to market players for entry, the government also cashed in by imposing a
licensing fee of N200,000 per bike for companies. In the midst of all these Paystack,
a modern online and offline payment platform for Africans raised a 2nd
round funding of $200m which is a vote of confidence in the payment space. On
the flip side Health plus which is a chain of pharmacies has been in a tussle
with its UK investor over the control of the company insinuations by the
founder Bukky George that a known Nigerian businessman connived with the
foreign investors to take control of health Plus and relegate the founder. The
matter is still in courts and also the court of public opinion. All these show that
the market has tremendous prospects if well harnessed in spite of COVID-19.
Joshua
Cooper Ramus in his book ‘the 7th sense’
talks about the central reality of the world we live in, connecting people, and
machines. The links between humans and machines getting tighter with oceans of
data readily available to be used for and against.
The
availability of data and links in the era of Artificial Intelligence (AI) makes
it a lot easier to seek and receive answers to the world’s deadliest virus yet.
Countries can share knowledge on the COVID-19 strains, variants and its cousins
which should speed up the delivery of viable vaccines and treatments. However,
it is beginning to look like another Nuclear arms race with various Bio tech
and Big Pharma coming up with their version of the Vaccine with claims and
counter claims.
Big
Pharma typically sees this as another opportunity to cash out, while Governments
are eager to weaponize the availability of the vaccines.
As at the writing of this piece,
several companies have started to ship and deliver their vaccines across the
world with the UK, USA and other global leaders posturing on TV to take their
shot, which is seen as an encouragement to the populace to take the vaccines
and feel safe doing so.
The race for the future has
earnestly resumed, with Africa not really factored in the equation. The Pfizer/
Bio Tech N vaccines with 95% effectiveness which are pricey have been bought by
rich countries with countries such as Canada having access to 5 vaccinations
per person while the poorer countries may have to jostle for the Oxford
University/ AstraZeneca vaccine which is cheaper, with 70% effectiveness to be
available to vaccinate about 1 in 10 people.
The world may no longer be looking at humanitarian consideration primarily as the rich world tries to take care of itself. It is indeed a time of harsh practical reality for all concerned.
With the advantage of weather, lifestyle (herbal
concoctions), herd immunity and elevated defenses to most viruses, Africans can
come out of this new world calculation at the upper end of the ladder with
reduced infections and mortality if we properly educate on social distancing,
use of face mask and continue the practice of eating alkaline (fruits) and
develop our local herbal medicine into world class.
Just like the secret agent in the movie tenet who went through time to try to avert world war 3, as we cross over to the new year 2021, preparing our customary new year’s resolutions, we must hold the lessons and experiences of the landmark year 2020, which have been a classic ‘what they do not teach you in Business school’ free curriculum
