WBAF is an affiliated partner of the G20 Global Partnership for Financial Inclusion (GPFI), in a latest release by Chairman, Altuntas Baybar led WBAF and explained by WBAF International Partner in Nigeria, David Lanre Messan (DLM). The release state that for the first time since the Great Depression of 1929, every country, every society and every economy in the world is witnessing the impact on health, employment, finance, trade and business; noting that reports from the World Bank, International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), World Economic Forum (WEF), and NASDAQ forecasts wide-ranging effects of this great disruption which has adversely affected the current state of the global entrepreneurship ecosystem.
Revealing this recently, David Lanre Messan (DLM) disclosed that WBAF has submitted comprehensive policy recommendations to the G20 leadership in order to alert policymakers about the urgent needs of start-ups. He noted that the organisation elicited opinions on issues in a variety of domains, ranging from financing, the workforce, business model realignment, and types of support that are needed during this turbulent economic period.
David Lanre Messan, an alumnus of Harvard Business School Online, Nexford University and Pan Atlantic University is an award winning idea strategist, entrepreneur and investor with key interest in entrepreneurship and technology (Tech-Startups, Fintech and Sharing economy). He is highly skilled in idea development, brand strategy, disruptive strategy, fund raising and startup development and has worked as a global advisory board member (West Africa) for Innovate Africa and Scalabl international advisor (Africa), his works has also been recognized by the World Economic Forum, Global Shapers Community, World Bank, Taking IT Global, African Business Leadership Forum, and European Research Council.
He noted that the survey also quoted other institutions like the WEF identified a number of key risks, such as, 500 million people falling into poverty, a 3% drop in world output, an anticipated fall in global trade of up to 32%, and an estimated 40% drop in Foreign direct investment (FDI). “The report forecasts that bankruptcies will skyrocket, that many industries will fail, and that structural unemployment levels will be elevated for years to come,” explained Lanre Messan.
Continuing, he said that NASDAQ survey indicated that start-up investors expect there will be a significant impact on investing activities and that this pandemic-induced environment will last between 1 and 2 years.
“The comprehensive survey and key findings show that 52.22% expected their funds would last 3-6 months without any additional funding while 29.6% of respondents reported that their current funds would last more than 3 months. Secondly, 41.1% of respondents reported a 50% drop in market demand for their services or products and 63.1% of startups surveyed; plan to change their business model in the post-pandemic business cycle while 36.1% of respondents have definite plans to pivot their business during this business cycle.
Thirdly, 46.5% of respondents believe that the impacts of the pandemic will last6 months to a year while 11.3% believe it will persist beyond 2 years. Fourthly, 39.90% of respondents reported a drop in the valuation of their business, but 21.67% reported an increase. Lastly, funding, demand, and workforce represent 37.93% of the challenges start-ups face, with funding ranking highest,” Lanre Messan added.
Meanwhile, there is an additional insight from WBAF survey showing comparative analysis of the global impact from professionals and corporate bodies that include Prof. Inderjit Singh, former Singaporean Parliament Member and Chair, WBAF’s Global Startup Committee; Baybars Altuntas, a former Senior Advisor to the London Stock Exchange Group, now chairs the World Business Angels Investment Forum and Hauwa Yabani, WBAF High Commissioner for Nigeria.
This insight survey however, highlighted impacts across all industries with Consulting and professional services being the most heavily affected at 29.02% and electronics, the least at 1.96%. The survey also indicates that there was a high level of agreement at 74.88% among respondents, about the need for and the benefits of liaising between business owners and policymakers, while pointing an equal downturn in short- and long-term investments at 39.41% and widespread, complex contingency plans. But these accordingly, included reducing costs, laying off staff at 27.9% and seeking additional capital to sustain their business placed at 41.38%.
Prof. Singh says, ‘At this point, we would like to provide a summary of insights from other global surveys conducted by international organizations over the past few months that offer complementary views. Some focused only on one segment within the entrepreneurial ecosystem, while others attempted to get a more comprehensive picture. Overall, you will see that the WBAF findings are consistent with these other major surveys.”
Prof. Singh’s observations follow with Ernst and Young Global, a consulting firm. Two of the key findings were related to the status of existing projects, specifically that 65% of existing foreign investments were proceeding as planned, 25% were delayed, and 10% were cancelled.
Also, Deloitte conducted and published the results of a survey on global human capital trends related to the future of work. The report addressed the purpose, potential, perspective and possibilities for the workforce during the COVID-19 economic environment.
PricewaterhouseCoopers has recently completed a CFO Pulse Survey, which gathered opinions from 150 international finance executives. More than 82% of multi-territory respondents reported that COVID-19 had a significant impact on their business, while 32% expected to engage in layoffs, and 52% of respondents expected productivity losses.
“As the world is faced with these widespread economic challenges, it is essential that leading organizations and their representatives take charge by raising awareness and proposing solutions. There is a general consensus among experts about several strategic areas that are recommended for recovery: focus on rebuilding operations and recuperating revenue, rethink the organizational infrastructure, and accelerate the adoption of technology. Only by designing novel business models can we rebuild the global economy and reshape the business ecosystem for future generations,” Prof. Singh said.
“We are convinced that we will be able to present a better road map of post-pandemic times for startups, scaleups, entrepreneurs, SMEs and investors if a greater emphasis is placed on knowledge, which is central to the transition debate to a ‘new normal’. We believe that simply keeping physical distance, washing hands, and staying at home is not enough to solve the challenging problems that entrepreneurs and the young generation will face after COVID-19 itself ceases to be a problem. We need better policies that are developed in the light of knowledge that can only come from the entrepreneurship and investment ecosystem,” says Altuntas.
He however, stated, “Entrepreneurs who are quicker to read the changing customer behaviour will take a more active and profitable role in the post-pandemic business environment,” Altuntas said.
Among other things he listed are business transformation, Digital transformation and traditional money, making its way to becoming smart money in the post covid-19 era.
In his recommendations, he enumerated expectations from government as a response to Covid-19 which include developing the digital infrastructure of their communities such as provision of computers to ease online education, acceleration of internet speed, fintech, healthcare, and creating smart cities as a response to COVID-19.These according to him will all lead to a better digital transformation of communities, better healthcare systems, more financial inclusion and more equal opportunities in education. “
“We believe that freedom of speech, human rights and gender equality are three important components of creating a healthy environment for citizens, which in turn opens the way for creative thinking. We believe the world of post-pandemic times will need more support from citizens with creative ideas if we are to turn the COVID-19 pandemic into long-term social good,” Altuntas said.
“As Executive Chairman of the World Business Angels Investment Forum, I encourage G20 leaders, policymakers, academics, global thinkers, entrepreneurs and investors to consider developing a new way of thinking.”
Hauwa Yabani is the WBAF High Commissioner for Nigeria. In her assessment of the challenges and impacts caused by the Covid-19 pandemic in Nigeria, she, unequivocally stressed need to utilise the various emerging transaction channels available.
“With an economy that is highly dependent on global crude oil demand for foreign exchange and government revenue, the crash in crude oil prices has devastated public finances, further exacerbating the situation. The resort to state-wide lockdowns to control the spread of the virus has led to a major slowdown of economic activities. The fragility of the health system has been exposed and employers are actively pursuing cost-cutting measures, including reducing remuneration and relieving staff of their jobs. While the public isolation centres for COVID-19 positive patients are yet to be overwhelmed with a relatively low level of fatalities recorded thus far relative to the population, the same cannot be said on the situation of the economy.
“While times remain tough for start-ups, the crises have created opportunities for evaluation and optimisation for the post-COVID-19 reality. Start-ups that are resilient, repositioning technology as a major enabler, and participating in various capacity building programs are increasing their chances not only of survival but also of attaining sustainable growth. Start-ups in some sectors such as the health sector, logistics and other essential services have seen spikes in the demand for their products or services, but have struggled to meet this demand due to the corresponding funding requirements which are not readily accessible. It is not surprising that some start-ups have had to fold up while others are grappling with appreciating the importance of digital literacy, establishing online presence to retain or gain new customers, and utilising the various emerging transaction channels.
“The general expectation in Nigeria is that the COVID-19 pandemic will eventually wither, as the Ebola, Zika, and Severe Acute Respiratory Syndrome (SARS) viruses have in recent years. However, the socio-economic impact on the economy, especially on the start-up ecosystem, will remain for long after especially for those that fail to adapt to the new normal. It is a time for optimistic pragmatism,” concludes Yabani.
