The current state of the country has posed some challenges for businesses. In this time of recession, every company has to think outside the box and find a way to survive. Since the beginning of 2016, companies in Nigeria have faced a series of economic problems, such as a lack of foreign exchange for imports. This has created serious bottlenecks in production and in meeting customer demand, although the demand for local raw materials has increased (only imported raw materials that have a local substitute).

Prior to this time, Nigerian companies have been struggling with a couple of issues such as poor infrastructure, poor power supply, global competition, counterfeit products, regulations and taxes etc. Working capital has been seriously depleted and banks are not lending. The inflation rate has been ridiculous and the devaluation of the Nigerian Naira has been alarming. The recession in the economy has greatly affected all sectors of the economy and many companies have to close operations while others are operating below the minimum.

Therefore, it is important that any company that wants to survive this recession has to come up with new strategies to survive. However, the first area to focus on is the cost of the business. The recession calls for cost cutting, especially those costs that we can eliminate. These include the cost of wastage (double handling). It is not time to rework the products, which increases the cost of production. The cost of power/energy (for the fuel of the generators) should be reviewed. Do you need to run all the machines? Do you need to run the current capacity of the machine, even though you are not doing the usual volume with it? Do I need a large generator at this point or do I use smaller generators for small machines, therefore spending less on diesel or gasoline? These are questions for decision making regarding the efficient use of energy.

The company has to analyze the costs resulting from the luxury or high-end lifestyle. It is an important area to reduce costs. The number of staff can be reduced as most companies are not doing the usual volume required by the current number of staff. It is better to have few staff who can be well paid doing all the work than a lot of staff whose salary the company cannot pay at the moment.

Procurement manager needs to do more research on local substitutes/alternatives for some materials as Forex is not even available. You may need to consider other providers and see what they can offer. The production manager can also look for a possible production synergy between the production plants.

Another important area to consider is also the new business idea. Given its current machines and labor, the company can think of a new product with 60-80% use of local raw materials. This will help the company to operate and pay its fixed cost while sorting Forex and importing other products. The new product can be well managed to make room for export, if to neighboring countries. This is not a bad idea. Just survive!

Nigeria is going through a phase and it will pass soon. However, every company has to figure out how to stay in business before the end of the recession.