KPMG on COVID-19 impact on Nigeria's consumer & industrial markets

The COVID-19 pandemic has been a global disruptor, impacting economies and industries across the world. Nigeria, as an oil-dependent economy, has felt the brunt of crashing oil prices and a partial lockdown in April, which have severely impacted the country's consumer goods and industrial markets. Goodluck Obi, Partner and Head of Consumer and Industrial Markets at KPMG Nigeria, shed light on the challenges and opportunities brought about by the crisis during an interview on CNBC Africa. Obi highlighted key concerns and strategies that businesses in Nigeria are employing to navigate the uncertain terrain brought about by the pandemic. The easing of the lockdown in Nigeria has been a topic of debate, with mixed views on its effectiveness. Obi emphasized the need to balance the health and economic implications of the lockdown, acknowledging that sustaining a prolonged lockdown in a country like Nigeria poses challenges in terms of security and providing palliatives to citizens. He underscored the government's decision to gradually ease the lockdown, taking into consideration the socio-economic realities of the country. The oil market volatility has further exacerbated Nigeria's economic woes, with plummeting oil prices amplifying the impact of COVID-19 on the country. Obi pointed out that Nigeria, like other nations, has been forced to grapple with the repercussions of the 'triple shock' of falling oil prices, the global pandemic, and the subsequent economic downturn. In response to these challenges, the government has implemented various measures to mitigate the impact on the population. The Central Bank of Nigeria (CBN) has introduced new Forex regulations to stabilize the currency and manage foreign reserves effectively. Restrictions and lockdown measures have also disrupted the manufacturing sector in Nigeria, with essential businesses continuing operations while non-essential ones have been forced to halt production. This disparity has implications for economic recovery and growth prospects in the country. Specifically focusing on consumer goods, Obi highlighted the disruptions in supply chain management as a critical issue for the industry. The pandemic has underscored the importance of diversifying raw material sources and reducing reliance on imports, particularly from countries like China. Nigerian businesses have had to pivot towards local sourcing and explore alternative supply chain strategies to ensure continuity in production. Additionally, traditional marketing channels have been disrupted, necessitating a shift towards innovative ways of reaching consumers. The pandemic has accelerated the need for digital transformation and e-commerce adoption in the consumer goods sector. Overall, the COVID-19 crisis has forced businesses in Nigeria to rethink their operational models and adapt to a rapidly evolving economic landscape. While challenges persist, there are opportunities for growth and innovation for those agile enough to navigate the changing market dynamics. As Nigeria gradually emerges from the crisis, resilience and adaptability will be key drivers of recovery for the consumer and industrial sectors in the country.