Businesses advised to develop resilience to withstand disruptive, uncertain economic environment
Businesses in Ghana have been advised to develop resilience to be able to withstand the current disruptive and uncertain economic environment caused by the Covid pandemic and the recent Russia-Ukraine war.
The inability of businesses to develop resilience amid the current uncertain and disruptive environment, will result in their collapse says Oyetolani Oyewolu, a strategy professional with 10 years of experience providing strategic advice to companies in diverse industries.
Making the assertion during a webinar themed “Doing Business in Today’s Economy” held by business consultancy firm, MalletWricketts in partnership with norvanreports, Mr Oyewolu, averred businesses amid the current global uncertainty are being forced to evolve and transition from business models with greater focus on efficiency to that of models with greater focus on resilience.
“There is increased uncertainty in our business environment, never have we been in such a disruptive and uncertain business environment like we are at the moment.
“And the uncertainty is driving businesses that were built to be efficient to now move or transition to being resilient. Because businesses that do not transition to being resilient won’t be able to adapt to the current environment and as such won’t survive (sic),” he remarked.
Adding that businesses that were built to be efficient suffered layoffs particularly amid the Covid pandemic as they were not able to adapt and withstand the adverse impact of the pandemic.
According to Mr Oyewolu, resilient businesses are more robust and responsive to disruption and uncertain economic environments.
To be resilient amid uncertain and disruptive economic environments, he advised businesses to develop the following; financial resilience, operational resilience, organisational resilience, technological resilience and business model resilience.
A survey conducted by the Ghana Statistical Service (GSS) during the Covid pandemic revealed that the coronavirus pandemic led to a significant decline of sales in about 90 percent of local businesses surveyed in 2,770 localities in the country from May to June 2020.
The report, dubbed ‘COVID-19 Local Economies Tracker’, which aims at accessing the impact of the pandemic on the local economy, stated that as a result of lock down measures and other restrictions imposed by government to contain the spread of the virus, about 72 percent of businesses experienced a decline in production, resulting in nine out of ten of those businesses also seeing drastic decline in sales.
Besides decline in production and sales, another area which was heavily impacted is labour, as the tracker shows about 36 percent of the businesses experienced labour shortages. Prices, on the hand, increased, with food and non-alcoholic beverages experiencing the highest price increase of 4.8 percent.
From the data, businesses in the services sector recorded the highest number of closures as more than 96,200 businesses were not operating within the period under discussion. Trade followed with more than 27,200 business closures, with accommodation and food also seeing more than 16,900 businesses closed in the period.
The manufacturing sector also had more than 14,900 businesses closed; with agriculture and other industry also seeing 5,157 and 445 businesses closed.