CPPE: Technology, backward integration to ensure business resilience in 2025

Businesses in 2025 are facing a challenging landscape, with the need to navigate various risks and uncertainties. The Centre for the Promotion of Private Enterprises has highlighted the importance of prioritizing technology, backward integration, and reducing debt financing to ensure business resilience in the upcoming year. Muda Yusuf, Director and CEO of the Centre for the Promotion of Private Enterprises, emphasized the critical steps that businesses need to take to stay afloat and resilient amidst the evolving economic environment. Yusuf pointed out that backward integration is crucial, especially for manufacturing companies, to reduce foreign exchange exposure and enhance resilience. Additionally, he stressed the importance of deleveraging and reducing debt financing due to the high interest rate costs projected for the year. Energy solutions that are cost-efficient were also identified as a key factor in ensuring business resilience, given the challenges posed by the high cost of energy in previous years. Managing foreign exchange volatility was highlighted as a key strategy for companies to withstand economic shocks and uncertainties in 2025. With the unpredictability of the previous year, businesses are urged to adopt robust risk management strategies to identify and mitigate potential risks that could impact their operations. Regulatory risks, interest rate risks, and foreign exchange risks were identified as key areas that require attention to safeguard businesses from economic uncertainties. While macroeconomic risks are expected to be less pronounced in 2025, fiscal risks could arise and affect the overall economic outlook. In terms of inflation and the policy environment, Yusuf noted that the forex situation is expected to stabilize, supported by improvements in foreign reserves, inflows from international money transfer operators, and increased non-oil exports. The outlook for the energy sector appears positive, with developments in domestic refining reducing the reliance on forex for petroleum product imports. However, interest rates remain a concern for businesses, with a need for interventions to address the challenges posed by high borrowing costs. Overall, businesses are advised to proactively address these key areas and implement strategies to enhance resilience and adaptability in the dynamic business environment of 2025.