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Covid-19 Pandemic: Top Business Gainers and Losers

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CoronaVirus Header- Image credit: furma.edu

In early 2015, one of the most adorable personalities in the world, Bill Gates held a session on TED about “The Next Outbreak? We’re not ready”. This was immediately after the world survived the outbreak of Ebola. He explained how we reacted to the epidemic with detailed statistics but also stated that despite our efforts the world was far from being ready for another epidemic or a pandemic!

Fast forward to the year 2020: COVID-19 has become a flame without a fire that has engulfed the entire world and brought us all to a standstill, with “compulsory holidays” being declared in most countries and no logical end in sight to the pandemic! If Bill Gates were a religious leader, the entire world would have become his congregation by now and of course, with plenty prophet offerings!

According to Wikipedia, coronavirus disease 2019 (COVID-19) is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The disease was first identified in December 2019 in Wuhan, the capital of China’s Hubei province, and has since spread globally with common symptoms including fever, cough and shortness of breath. Other symptoms may include fatigue, muscle pain, diarrhea, sore throat, loss of smell and abdominal pain. The time from exposure to the manifestation of symptoms is typically around five days, but may range from two to fourteen days. As of 10 April 2020, more than 1.6 million cases had been reported in more than 200 countries and territories, resulting in more than 100,000 deaths!

The virus is mainly spread between people during close contact, often via small droplets produced during coughing, sneezing, or talking. While these droplets are produced when breathing out, they usually fall to the ground or surfaces rather than being infectious over large distances. People may also become infected by touching a contaminated surface and then their face. The virus can survive on surfaces for up to 72 hours. Coronavirus is most contagious during the first three days after onset of symptoms, although spread may be possible before symptoms appear and in later stages of the disease.

The Effect of COVID-19 Pandemic on Business Environment

The emergence of the mighty COVID-19 has definitely altered lifestyle on a global scale. The business environment has now become more challenged especially as no one knows how long the pandemic would last. But even in the current challenging reality, further opportunities have been created for some industries that now are enjoying tremendous cashflow despite the suffering of the world.

Imagine what the current situation would have been without access to information communication technology. Imagine what it would have been without online platforms for e-commerce, trainings and financial services.

Definitely, the financial industry has helped tremendously to stabilise the economy from collapsing through their various payment channels such as Internet Banking, Point of Sales (PoS) Terminals, Automatic Teller Machine (ATM), Mobile Banking Application and USSD. This management of the demand and supply flow is steadying various economies of the world and preventing another global economic recession.

In complementing the efforts of the financial industry, fintech companies are deploying innovative solutions for greater convenience in the performance of electronic payment transactions. Of late, one of such innovation is Paylink, a payment solution for anyone to receive money INSTANTLY into their bank account from anyone, anywhere, anytime! This particular payment solution has become the delight of SMEs, crowd funder, social entrepreneurs, religious organisations, individuals and others at this time of restricted movements and social distancing.

Also Read: Dr. Quist-Aphetsi Kester, A Global Scientist Leading The Fight Against COVID-19 Through Coding

The Biggest Business Losers

For industries that the pandemic negatively affected, the list is almost unending. But to kick-start discussions, here are the possible top losers:

  1. Aviation

This industry is one of the most capital intensive in the world and its operational cost is not a joke! The nature of the business involves continuous maintenance, high taxation, increasing operational and administrative costs which are the reason most airline operators utilise debt financing or are currently in huge debt with only bailout or liquidation as options.The outbreak of COVID-19 has complicated the struggling cashflow (revenue) of the airlines with several operators finding it difficult to survive!

  • Small & Medium Enterprises

SMEs have been the backbone of many economies as their activities have created employment opportunities and facilitated daily livelihood of many. However, with the lockdown, most SMEs have struggled to adjust as closure of business premises and markets has reduced patronage and sales. Although once business operations resume, it might be a slow start for them, but their recovery will definitely be short term.

  • Religious Organisations

Their major sources of income are donations and contributions of members and followers in terms of voluntary and mandatory giving through their various beliefs and principles. Many of such leaders have become richer than organisations in the real business world!

Definitely, they were shocked that such an outbreak could turn their worship centres into ghost sites with many of them now embracing and adopting technology to reach to their members. As their members are also affected financially, the impact would reach the religious organisation. However, their recovery could be medium term as they would need time to convince their members to continue in belief and obedience of the doctrinal principles of giving!

  • Entertainment

They were one of major cashcows before the COVID-19 with several shows, albums and events for brand visibility and definitely more money. The industry has produced more celebrities and overnight millionaires with little or no knowledge of wealth or fame management!

The belief is that all you need is just to have a talent and the world would be at your feet.But the reality is that the industry is a Red Ocean with several people struggling for the same audience.  At the moment, it is even difficult because the lockdown and social distancing measures have put shows and events on hold.

Regardless, the industry would still continue to survive through innovation that can create a new path to Blue Ocean within the medium term but definitely not in the short term!

  • Transportation & their Unions

It was necessary to specifically separate this from Aviation Industry and combine it with unions especially if you are from this part of the world where National Union of Road Transport Workers (NURTW) is a major stakeholder in the affairs of the state. Outsiders think its members are illiterates but majority of its leaders have their family abroad and their children schooling overseas. Yet, we think they are not that smart but they milk money through extortion and harassment of motorists.

However, since governments across several states have ordered a lockdown to limit the spread of the pandemic, it has been very challenging for the transport operators and their unruly unions to eke a living. But once this period phases out, their business would resume as usual and their recovery will definitely be a short term!

Top Business Gainers and Next Emerging Opportunities!

While some will definitely find it hard to recover immediately after normalcy returns, a few will reach huge opportunities as the “Next Cashcow Industries” They include:

  1. Food & Beverages

The demand in consumption will increasing as people would put survival as a priority – and access to market will increase demand for food items.

  • Communication

There will be a change in culture and attitude in some areas such as work pattern, education, commerce and access to information, with more preference for online channels which in return would increase demand for data.

  • Lending

With many current loans going bad due to collapsed businesses and loss of jobs, the lending business would be receive huge patronage by people looking to start all over again.

  • Logistics and Distribution

Commerce and demand for commodities across locations as a result of the impact of current situation and fear of the unknown would create an increasing need for logistics and distribution of commodities.

  • Lottery

People will be desperate for quicker ways of making money and lottery would give hope even when such people might end worse off.

So, while we can’t change the reality of the challenges that would arise from the COVID-19 pandemic, we can at least apply wisdom to prepare towards joining the “Cashcows” when the season changes for good!

The next season is just around the corner! Are you Ready?

Article by:

Oluwaseun Adesanya: An international consultant with great wealth of experience across several countries with special interest in fintech, financial inclusion, insurance, innovation, financial services, strategy, social impact, business transformation and technology. He is currently, the Group Head, Strategy & Innovation of SystemSpecs, leading financial technology and human capital management firm.

Visit: SystemSpecs

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Entertainment

TuneCore Launches Operations in Africa, Appoints Two Female Regional Executives

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TuneCore Jade Leaf and Chioma Onuchukwu

TuneCore, the leading digital music distribution and publishing administration company for independent artists, has launched operations in Africa. Jade Leaf has been hired as Head of TuneCore for Southern Africa and will share responsibility for key countries in East Africa with Chioma Onuchukwu, who has been hired as Head of TuneCore for West Africa. Both Leaf and Onuchukwu will report to Faryal Khan-Thompson, Vice President, International, TuneCore.

Onuchukwu will be based in Nigeria and oversee countries in West Africa including Nigeria, Ghana, Liberia, Sierra Leone and The Gambia. She will also look after Tanzania and Ethiopia in East Africa.  Leaf’s territory encompasses Southern Africa, including South Africa, where she will be based, as well as Namibia, Botswana, Zimbabwe, Zambia, Malawi and Lesotho. Leaf will also manage TuneCore operations in East African countries Kenya and Uganda.

Said Onuchukwu, “I am elated to be joining a renowned, independent music distribution powerhouse, especially in an incredible era for music creators in Africa at a time when we are gaining global recognition and increasing momentum. I look forward to collaborating with and supporting local artists.”

Before joining TuneCore, Onuchukwu was Marketing Manager at uduX Music, a music streaming platform in Nigeria. There she worked directly with popular African artists such as Davido, Yemi Alade, Patoranking, Kizz Daniel and more.

Commented Leaf, “I am incredibly excited to join the team in a time where the global conversation is around independence and ownership. TuneCore opens up a world of potential for independent artists at every level of their careers. Africa is home to a diverse range of artists who are seeking a reliable distribution service who understands their local needs and can ultimately give them the opportunity to turn their art into commercial success.”

Previously, Leaf worked at Africa’s largest Pay TV operator, Multichoice as the Marketing Manager for Youth & Music Channels, where she led brand re-imaging and marketing efforts for Music TV giant Channel O. Before that, she worked at Sony Music Entertainment Africa, focusing on African artists and content, as well as numerous marketing campaigns & projects for local and international artists.

There has been a meteoric rise in the uptake of streaming services in Africa, the growth has been attributed to several factors such as an increase in internet penetration via smartphones, the entrance of international and local streaming platforms in key territories and its youth population – More than 60% of African’s are under the age of 25.

In 2020, TuneCore saw an increase in music releases globally, with many African artists opting to use the DIY Distributor – DJ Spinall and Small Doctor in Nigeria, Spoegwolf in South Africa, Mpho Sebina in Botswana and Fena Gitu in Kenya to name a few.

Stated Khan-Thompson, “Africa is an extremely exciting music market with a lot of potential for growth. By hiring Jade and Chioma to lead our efforts, TuneCore is well positioned to maximize opportunities for independent artists across the continent. Both Chioma and Jade bring a wealth of experience and genuine interest in helping artists make their dreams come true. I couldn’t be more thrilled to have two incredible women representing the TuneCore brand in the continent”

TuneCore

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IFC Invest in Liquid Telecom Bond to Support Broadband Connectivity in Africa

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IFC, a member of the World Bank Group, invested in Thursday’s bond issued by a subsidiary of Liquid Telecommunications Holdings Ltd., which will allow the telecoms and technology solutions company to expand access to broadband Internet and digital and cloud services across Africa, further facilitating the growth of the continent’s digital economy.

Proceeds from the bond issued by Liquid Telecommunications Financing PLC, a wholly-owned subsidiary of Liquid Telecommunications Holdings Ltd, will enable the company to refinance existing debt and free up funds to expand its digital infrastructure network across Africa, including in markets with low broadband penetration.

By developing digital infrastructure, Liquid Telecommunications, Africa’s largest independent fiber, data center and cloud technology provider, aims to increase digital connectivity and inclusion in Africa and support the region’s growing digital ecosystem.

IFC played an anchor role and subscribed to 16 percent of the bond, equivalent to $100 million, which was listed on Euronext Dublin, Ireland’s main stock exchange, on February 25, 2021. The issuance raised $620 million.

Internet access in Africa relies largely on mobile networks, many of which are enabled by wholesale connectivity providers such as Liquid Telecommunications. Broadband penetration is low across the continent, with a mobile broadband penetration rate of 34 percent and fixed broadband penetration of less than five percent in most countries across sub-Saharan Africa, excluding South Africa.

“We are delighted that IFC has taken a significant anchor position in our new bond. In the countries in which we operate there are great opportunities to address under developed telecommunications and Internet access, as well as to accelerate the adoption of digital and Cloud-based services. Our refinance enables us to continue to invest in the African digital eco-system including driving penetration of digital and Cloud-based services to businesses who may not previously have had the resources to benefit from them, helping to bridge the connectivity divide, which is more crucial than ever in our current circumstances,” said Nic Rudnick, Liquid Telecom Group Chief Executive Officer.

“Our best chance at ensuring much-needed internet access for everyone in Africa, from large corporates and small businesses to individuals, is to invest in digital infrastructure. Our investment in the Liquid Telecom bond will help the company free up capital to further expand broadband access across Africa, laying a solid foundation for a faster, more resilient recovery,” said Stephanie von Friedeburg, Interim Managing Director and Executive Vice President, and Chief Operating Officer of IFC.

To support Africa’s digital economy, which could be worth $180 billion by 2025, IFC provides financing to mobile network operators, independent tower operators, data centers and broadband connectivity providers. IFC also provides capital to help entrepreneurs and innovative businesses grow and works with financial institutions and telecommunications companies to speed the adoption of digital payments and lending to expand financial inclusion.

Source IFC

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Investment

Diaspora investments: A must for the development of Africa

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Image Source: rupixen.com

It has been three years since his Excellency president Nana Akufo-Addo of Ghana shared some controversial thoughts on Africa’s dependence on aid or support from Europe in a decades long effort to develop the continent.

He was applauded for his bold statement and stance, but many (especially people from the Ghanaian diaspora) thought they were only words. Words they had heard many times before, but without plans or actions backing them. This might be true from their perspective, yet for the current generation of descendants from those who have been sold into slavery, it was good to hear an African leader show some backbone.

“We can no longer continue to make policy for ourselves, in our country, in our region, in our continent based on whatever support that the western world or France, or the European Union can give us. It will not work. It has not worked, and it will not work”.

The Diaspora Is Linked To The Strength of Africa

President Nana Akufo-Addo’s views on European aid are commendable, even if we debate how much he will be able to back up his words with actions.

“The place of the Diaspora, the status of the people in the diaspora, of the African diaspora, is intimately linked with what happens on the continent. An Africa strong and performing, transforms your position, your status here in Europe”.

He was addressing diaspora members in France, but he could have been addressing all people of African descent worldwide. The fact is that his ability to back his words, not exclusively but to an important extent, is contingent on the support he as an African leader receives from the African diaspora.

Remittance Coming From The African Diaspora

As a member from the African diaspora, one might ask: “Are we not supporting enough?”

Ishmeal Lamptey (Source: unsplash.com)

According to the World Bank Sub Saharan Africa received an estimated 48 billion US dollars in remittance funds from the African diaspora in 2019.

A study by Comstock, Iannone, Bhatia published in March 2009 (yes, the phenomenon has been studied for some time now) shows most funds are spend on costs of sustenance (29%), medical costs (16%) and education (12%).

When looking at the order of precedence these costs take in relation to each other, we see that unforeseen costs come first, second are medical costs and the last are for education. This underlines what we all know. The fact that there is often a sense of emergency to these transfers.

The Need To Move From Remittance To Investment In Africa

So, to answer the question of the diaspora, if it is not doing enough…well no. Harsh isn’t it? The fact of the matter is that the remittance funds are our own version of aid to the continent. It is keeping our people our family from dying but it’s not helping with any development.

We, the African diaspora, need to make the transition from remittance to investment. Remittance will always be part of the financial flows, but when seen in relation with Foreign Direct Investments (FDI) from the diaspora, they shouldn’t dominate as they do at present.

Following the content of a few independent journalists, there is now ample proof that at least some in the diaspora are not only willing, but able to move to the continent and start new businesses. But this group is a very small minority. The vast majority will not be able to follow suit and we should not want them to.

The revenues of the use of their human capital is needed to generate the investment flows Africa needs. The challenge Sub Saharan Africa faces is that of aggregation of available funds originating from the diaspora. The funds are clearly there, the industries which need them for we’ve identified, but now we need to create a robust infrastructure to aggregate and get them to their destination.

Like we pointed out in our previous article about thinking sufficiently big; while we keep our eyes on the end goal, we might need to start building one stone at a time. From individual projects, to industries, to the whole economy.

When doing so, we need to keep in mind that Africa is a unique environment. The common instruments of capital allocation used in the world should certainly be our starting point, but not limit our imagination when pooling the diaspora funds and channeling them into the continent.

As we have admonished a few times now; Africa should think BIG. And that also applies to its diaspora. In the coming articles we will continue exploring the idea of “thinking big” in the African context. So please make sure to subscribe to our Newsletter. We invite you to share your thoughts with us on the matter and get a discussion going with us and our other readers.

Article By: Jerrol Cambiel, Chief Executive EU Operations Debnoch Capital

 

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