Nigerian Companies Should Embrace Innovation to Overcome Recession

Top chief executive officers (CEOs) across sectors of the economy have said that the recession provide an opportunity to innovate and take advantage of opportunities hitherto unseen. The CEOs, who were part of a panel at the Nigerian Stock Exchange (NSE) Bloomberg CEO Roundtable in Lagos recently, said the recession have made many of them to innovate in order to survive the challenging times.

For instance, the CEO of Stanbic IBTC Bank, said that 2015 was a tough year for Nigerian banks as it “affected the quality of our loan book (personal and corporate). People were just not able to pay. The loans became impaired. The situation was the same in 2016 and was exacerbated by forex illiquidity.”

Managing Director of Okomu Palm Oil Company, Graham Hefer, said in agriculture, there were significant revenue drops, leading to aggressive lowering of cost.

According to him, in this company, there “were issues with having to import and the lack of forex.”

In the words of the CEO of African Finance Corporation (AFC), Mr. Andrew Alli: “In the last couple of years there hasn’t been any new large scale infrastructure project due to the fact that the recession has constricted ability to pay.”

On how businesses stood up to the challenge presented by the recession, Sogunle said that when considering companies with which to do backward integration, his bank looked at firms who were able to source raw materials locally and whose reliance on foreign currency was moderated, or those who were in a position to export (and thus could earn FX to bring in their imports).

On his part, Hefer said the recession helped his company aggressively lower costs while guarding forex that it obtained.

According to him, to bolster their forex sourcing, they devised a system of selling palm oil locally and selling rubber to the international markets.