At the end of May, Executives in Africa MD, Sarah Fitzgerald, was in Nigeria for meetings with new and existing clients. While she was there, Fitzgerald took some time to observe how the businesses are faring in the midst of the some of the toughest currency challenges for nearly a decade.
“Basically it’s a costly time, especially for those businesses needing to find tens of millions of dollars each week to support working capital requirements. The weekly quota of Forex available through the Banks at the official rate has plummeted again just recently, which means anything above this has to be bought through the grey market at 338 to the dollar. This adds 70% to raw materials costs overnight,” commented Fitzgerald.
(Sarah Fitzgerald with search consultant Colleen McIntrye)
“I was keen to explore how businesses are managing this instability. As one client explained further, “We are passing the cost on to the customer. When I decided to raise prices by nearly 50%, everyone counselled against it thinking we would go bust. In fact, it was the companies who didn’t put their prices up that went under, and the rest followed suit and increased prices.” This makes it sound very simple, but it is a complex and on going situation which business leaders have to deal with in a fast moving landscape.”
“This week we have met with a variety of clients who are actively hiring; PE firms who have bought companies at a good price and can see the potential under the right leadership team, start up businesses looking to stamp their brand firmly on the Nigerian market and wider across Africa, and even established businesses looking to deliver 10% growth this year despite the market challenges,” adds Fitzgerald.
A Managing Director of one of the leading banks explained to Fitzgerald, “Now only the best will survive. It’s a challenging but the most exciting time to be in Nigeria. But to win, we need to make sure we get the best people with a different mind set and aptitude.”
“It’s times like this when the entrepreneur always rises to the top and shines. It’s a tougher than usual operating environment which really differentiates the successful business leaders; those who are resourceful problem solvers and who thrive under this sort of pressure. The best leaders will still deliver growth for their shareholders in 2016, gain market share and launch new products. So if you are one of the best in your field, embrace the market conditions, rise to the challenge and find the way through!” concludes Fitzgerald.