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.