Corporations will need to evolve
business plans that try to map out future consumer needs and not their
past preferences, a report has stated.
Proshare Nigeria Limited, a business
information online platform stated this in its latest report titled:
“Coronomics and the Nigerian Economy: Understanding the Realities of an
Impending Recession,” obtained at the weekend.
The import of this is that companies
would be required to construct several scenario models with attendant
probabilities to determine the most likely outcomes.
According to the report, organisational
changes in strategy and planning would be needed to address the fluidity
in consumer experiences and expectations.
It stated that the COVID-19 pandemic has
shown that an integrated and tightly knit world could create lasting
and catastrophic problems and that nations may increasingly need to
secure domestic supply chains by strong backward domestic integration.
“The potent ‘Asianisation’ of global
supply chains has started to unravel as North America and Europe revisit
their production links to China, the world’s second-largest economy.
Emerging markets such as Nigeria have also had to take a step back to
see how they can protect their economies from imported contagion of both
a health and an economic variety,” it added.
The report made a case for a new
approach to fiscal and monetary policy management, which it described as
‘Fiscmon.’ This is to represent an integrated approach that sees
monetary and fiscal management tied into a forward plan of action to
achieve clearly stated objectives within a specified time frame.
It also observed that this approach was
becoming a global ‘normal’ as central banks become more assertive in
intervening in the push towards domestic economic growth and employment.
“Nigeria’s resource mindset has stayed
trapped in a past that is fast becoming a burden. Within the dynamics of
the new COVID-19 inspired economy, fiscal policy is reduced to the task
of bean-counting while monetary policy increasingly ascends to the
status of the country’s premier macroeconomic policy driver. “The recent
ascendency of monetary authorities has become a global event as new
economic management frameworks adopted by nations blur the once solid
line between fiscal and monetary policy.
“As supply chains get disrupted, and
consumer spending power tails off, the trilemma of balancing growth,
jobs and low inflation has become a Gordian knot,” it added.
It disclosed that monetary strategies
have ranged from concessionary agricultural loan schemes and insurance
cover to aviation sector loans and special credit programmes for
manufacturers.
According to analysts at Proshare, the
outcomes of the various interventions had been stretched, “from being
good to being weak.”
“The most successful intervention of the
CBN appears to be its agricultural sector interventions but the
aviation and manufacturing initiatives have proved to be more difficult
to resolve.
“The Central Bank of Nigeria (CBN) has
since 2015 (four years before the COVID-19 pandemic), taken on an
increasingly aggressive role towards determining the trajectory of
economic growth by implementing a series of intervention strategies
designed to spur the growth of the real sector,” it stated.
Furthermore, the report looked at the
traditional methods of handling macroeconomic disruptions and
demonstrated why the old ways of doing things no longer suffice.
“The post-COVID-19 ‘new normal’ will
mean different things to different people and organisations as human
cope with the reality of COVID-19, business and individual resets will
be inevitable as companies and employees make decisions to ensure
sustainability.
“However, new normal will differ across
countries and continents. The pre-existing realities of each country and
the fiscal head rooms of each government will determine what the new
shape of economic and personal management would look like in months to
come.
“While in Noth America, Europe and Asia, citizens would vote for
greater digital interaction in Nigeria this would be difficult given the
challenges of acquiring computer hardware, the cost of internet access
and the intensely communal nature of Nigerian lifestyles,” it added.
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