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5 TYPES OF BUSINESSES THAT ARE THRIVING DURING COVID-19 PANDEMIC by Chinedu Nnawetanma

The Coronavirus Pandemic has hit the world economy like a ton of bricks. Countless businesses across various industries have practically shutdown or are operating at fraction of their full capacity as a result of the restrictions on movement imposed by governments around the world to curtail the spread of the virulent COVID-19.

The International Monetary Fund (IMF), through its Managing Director, Kristalina Georgieva, on March 27 confirmed that the global economy has already slipped into a recession. Also, the Organization for Economic Co-operation and Development (OECD) cut its GDP growth forecast for global economy for the year 2020 to 2.4%, the lowest rate since the 2008-2009 financial crisis. At the national levels, the United States, United Kingdom, Italy, France and Malaysia are just a few of the countries that are almost certainly headed for a recession.

However, not every business has been negatively impacted by the global pandemic. Businesses in certain industries are actually thriving amidst the COVID-19-induced economic downturn. Changing lifestyle and business patterns occasioned by the restrictions on movement in various parts of the world means that people are now forced to spend much of their time indoors and engage in indoor and online activities, albeit temporarily. This has opened up a window of opportunity for online-oriented businesses.

Below are 5 peculiar industries that are currently witnessing uncommon growth in a recession-hit global economy.

1. Healthcare: It goes without saying that this is a boom period for businesses in the healthcare industry and its value chain. A lot of medical products and services are in high demand, such as surgical masks, hand sanitizers, disinfectants, vitamins and supplements, home healthcare and medical supplies, with many healthcare companies struggling to meet demands. Though saving lives is paramount in times like this, that has not stopped healthcare companies from smiling to the bank.

2. Social Media: Social media consumption has risen sharply across the world since the onset of the coronavirus crisis. According to a survey by the London-based market research firm, Kantar, in 30 economies between March 14 and 24, instant messaging giant, WhatsApp, has seen a 40% increase in usage due to the COVID-19 pandemic. Similarly, social networking platform Facebook has witnessed a 37% bump in usage since the crisis began.

Thanks to the ubiquity of the digital media, people are now discovering and leveraging novel ways of staying in touch with friends, family and colleagues; keeping abreast of happenings within their locality and around the world; and combating boredom amidst the lockdown.

3. Telecommuting: Organizations, including businesses, government agencies and religious bodies, have been forced to modify the way they operate in order to simultaneously keep their employees safe and ensure that their operations do not grind to a halt during the pandemic. More people than ever before are now working remotely. This phenomenon has elevated telecommuting platforms once considered luxuries to bare essentials of the work setting.

While stock markets have crashed and sent shares of travel and logistics companies like Uber and Lyft plummeting, the valuations of telecommuting companies like the video calling app Zoom have skyrocketed. The estimated net worth of Zoom's founder, Eric Yuan, has increased by more than $4 billion since the start of the coronavirus crisis.

4. Gaming: The entertainment industry generally is among the worst-hit industries in the coronavirus crisis. Movie studios have suspended production, sporting events have been cancelled, cinemas are shut, advert revenues for TV companies have dried up and streaming services like Netflix are struggling to churn out new content that will keep their subscribers engaged.

But the surge in demand for home entertainment has particularly benefited one niche business in the entertainment industry: online video gaming. US telco, Verizon, revealed in a recent report that video gaming traffic on its internet network during peak hours has spiked by as much as 75% since the shutdown in the United States began, and similar figures have been reported by other sources across other gaming hubs around the world.

5. E-learning: For many, this lockdown is an opportunity for self-improvement. And they have seized it to develop their knowledge and expand their skill set by taking online courses in software development, cooking, makeup, fashion design, foreign languages and entrepreneurship, among others. Parents have also enrolled their children in online academic programs while waiting for schools to resume.

All in all, apart from businesses in the healthcare industry (for obvious reasons), the biggest winners – for the lack of a more somber term – here are online-based and online-oriented businesses. A key takeaway for entrepreneurs during this economic gloom and doom should be the need to embrace the digital economy.

by Chinedu Nnawetanma
IG & Twitter: @Chinedugn

https://nairametrics.com/2020/04/04/five-industries-that-thrive-in-covid-19-downturn/

Lagos Okada ban, its Socioeconomic Consequences

by Chinedu Nnawetanma

On February 1, 2020, the ban by the Lagos State Government restricting all forms of motorcycles (excluding those used for delivery services) and tricycles from operating in key commercial and residential areas of the state officially took effect. Though well-intentioned, the timing and blanket nature of this ban have left much to be desired.

Among the reasons given by the Lagos State Government for imposing this ban was the rising spate of insecurity in the state. The government has argued that criminality in the state was facilitated by the use of motorcycles, popularly known as Okada, as a getaway means by hoodlums.

Also blamed was the crippling traffic gridlock that most parts of the state have been forced to grapple with in recent times during the morning and evening rush hours. The state government also argues that commercial motorcyclists and tricyclists have contributed in no small way to the state’s traffic malaise due to their wanton disregard for traffic regulations.

If these were the issues, one wonders how the ban would provide a sustainable solution. For instance, these motorbikes often provide easy transportation for commuters in Lagos State, especially during those gridlocks, ensuring that they arrive at their destinations on time and save the economy man-hours that would have been lost in traffic. They also keep hundreds of thousands of low-skilled Lagosians away from criminality by providing them with a legitimate source of income.

If the Lagos State Government really wants to arrest the traffic situation in the state, it should look towards employing more sustainable avenues with less radical socioeconomic consequences. These include the completion of the Lagos monorail project, expansion of road networks, ban on street trading, relocation of roadside markets and motor parks and construction of parks for articulated vehicles.

The real cause of the traffic nightmare currently being experienced in the Lagos metropolis is the population explosion. The state’s existing road networks can no longer cope with the daily influx of vehicles as more and more people continue to relocate to the state from other parts of the country.

Similarly, if it wants to tackle insecurity, it must beef up its security apparatus and change its modus operandi from reactive policing to proactive policing through intelligence gathering. It should also create more employment opportunities that will keep Lagosians gainfully employed by incentivizing the private sector. All these and more should have been put in place before the ban to cushion the socio-economic impact.

Government policy is a major enabler of economic growth around the world, especially in developing countries like Nigeria. The government’s primary role in the economy is to create an atmosphere that enables the private enterprise to thrive through the formulation of business-friendly policies. More importantly, its ability to maintain a consistent and cohesive set of policies over long periods of time by formulating long-term policies rather than short-term, stopgap ones is key to buoying investor confidence.

Investors are attracted to stability, consistency, and predictability and they flee from instability, inconsistency, and unpredictability. Time and again, governments in Nigeria have demonstrated just how easy it is for one administration to overturn the existing policies of its predecessors overnight. The inconsistency of policies scares investors and accounts for the low inflows of foreign direct investment (FDI) and foreign portfolio investment (FPI) into the country.

Investors who backed motorcycle-based ride-hailing startups in the state like ORide (OPay), MAX and Gokada – who are also affected by the ban – would now be counting their losses.

What it means: Other startups operating in the state and the country at large, irrespective of the industries they play in, would now face an uphill task convincing investors to fund them. A trend that may emerge in the Nigerian venture capital space is a preference for small-ticket short-term investments and profit-taking over long-term investments.

By Chinedu Nnawetanma IG/Twitter: @chinedugn

https://nairametrics.com/2020/02/08/lagos-okada-ban-its-socioeconomic-consequences/