Silver linings: Post-pandemic opportunities for African SMEs
By Bayo Oyewole, CEO, BayZx Global Strategic Solutions
The Covid-19 pandemic has caught the world completely by surprise and its huge global impact is likely to be felt for years to come. As the virus begins to spread at a quickening pace in many African countries, efforts to prevent its spread, including protracted stay-in-place lockdowns, have already had devastating consequences for their economies, leaving small businesses reeling from a sharply reduced demand for their goods and services. Following the pandemic, it’s unlikely that our lives will ever be the same again. Just as we have reluctantly adapted to the security precautions now routinely involved in air travel, so will the world be forced to adjust to a new normal: one that requires us to undertake all activities with a view to protecting ourselves from viral infection.
Opportunities for African SMEs
A post-pandemic Africa doesn’t need to lead to financial ruin for the African entrepreneur and, indeed, adaptation to the new normal can present opportunities for innovative small businesses on the continent. This article provides a guide for African business owners on how to identify new opportunities that could emerge in their countries as a consequence of the pandemic. A good starting point is to list as many of the economic sectors and industries in your country as you can and try to imagine how each might be affected by the pandemic going forward. Going sector by sector you should then try to identify specific ways in which your business could address the needs of that sector by providing a specific product or service. Below are a just a few examples of what opportunities could emerge in key sectors as we all seek to adapt to life after Covid-19.
The coronavirus pandemic has exposed serious flaws in the healthcare sector of most African countries, and this sector is the most likely to undertake significant reform as governments put in place measures designed to address the ongoing pandemic while also protecting their people from future pandemics. The supply of protective material will mean opportunities for local manufacturers that can produce surgical masks, plastic gloves, hand sanitisers and wipes, testing kits and an entire range of products that hospital personnel and private individuals will need to protect themselves from similar attacks in the future. In general, there will be a preoccupation with raising hygiene standards as all public places, not just hospitals and clinics, will be required to make soap, disinfectants and other hygiene products available to visitors.
While the vast majority of such products will still be manufactured by large multinational companies or, perhaps more likely, imported from China, there should be enough demand for cheaper, higher-quality local alternatives if they can be manufactured and delivered reliably at scale. It may be possible to interest some of the more affluent Africans in pandemic readiness kits to store away in anticipation of future pandemics or other emergencies, or in more unique, stylish protective gear.
Glaring shortcomings in public health systems will force African governments to give more urgent attention to the need for health insurance schemes, which can have the effect of shifting some of the responsibility for providing health services toward the private sector. This would open up opportunities for the entire supply chain, from private clinics, hospitals and pharmacies, to insurance provision, medical equipment supplies, all the way to medical waste disposal. Telemedicine is another potential growth area for many African countries, enabling smaller clinics and hospitals in rural areas and small towns to connect remotely with better-staffed and better-equipped healthcare centres in big cities or even in other countries through videotelephony technologies. Enterprising entrepreneurs can take advantage of these opportunities.
Many countries around the world responded to stay-at-home regulations by providing online classes to their students. This was shown to work reasonably well for educational institutions in richer countries and is likely to become a growing feature in countries with universal student access to computers and internet connectivity. Distance learning, while growing in popularity at the tertiary level has, however, been a challenge for many African countries, especially at the primary and secondary levels, largely constrained by technological infrastructure barriers. Businesses that can discover ways to make it more accessible to African students at the primary, secondary and tertiary levels can make huge profits while also providing learning opportunities for tens of millions of people at lower cost. The development of a basic, no-frills computer laptop or tablet to be made available to thousands of poor students at very low cost could transform education in Africa, also providing opportunities for converting textbooks and other teaching materials into modules that can be more easily disseminated online.
Just as the 9-11 attack on the World Trade Centre had lasting ramifications for the airline industry in terms of security, the Covid-19 pandemic is likely to lead to permanent changes in the way we travel. Air travellers will become more concerned about being exposed to diseases from circulated air in the confined space of an aeroplane. Health inspections, temperature screenings and instant tests will become commonplace before travelers embark on flights, when they arrive from their destinations and during transit stops.
While most of these testing sites will initially be maintained by the public sector, they may eventually be spun off to private firms that can demonstrate reliable service at reasonable cost. To reassure increasingly reluctant air travelers, airlines will be expected to disinfect their planes before boarding passengers, creating an opportunity for local businesses. There will also be demand, from both airlines and individual travelers for disposable gear, including face masks, seat covers, and other protective material that provide reassurance to would-be travelers.
These opportunities would exist, albeit to a lesser extent, with other forms of transportation, including in trains, buses, taxis and ferries. Cruise ship travel may be irreparably damaged by the distressing images we’ve all seen of thousands of sick passengers stranded for weeks on infected ships denied landing by country after country. However, if the industry is able to survive the impact of the pandemic, cruise ships will be held to a much higher standard of hygiene, and this could create business opportunities for African firms that are able to provide the necessary disinfecting and screening services.
The corporate world
Prolonged lockdowns to enforce social distancing guidelines have forced many African corporations to establish work-from-home arrangements for most of their staff. Many of these corporations have discovered that they can actually operate their businesses just as well with a large proportion of their staff working from home. Post-Covid-19, it’s reasonable to anticipate that many corporations will opt to save office space costs by having a percentage of their staff working from home for at least some of the time. This could also boost staff morale and productivity by reducing commuting and child-care needs. There is likely to be a demand from these corporations for the services of SMEs that can create suitable home-office environments for their staff at reasonable cost. This would go beyond installing appropriate furniture and lighting to include providing equipment and connectivity to enhance the work-from-home experience.
The recent explosion in the use of internet-based videotelephony technologies, such as Skype and Zoom, has highlighted the important role they can play for videoconferencing and telecommuting in the corporate world thus saving travel costs. Opportunities exist for African entrepreneurs in the tech industry to design apps that can make the use of videotelephony more widespread in the corporate world, perhaps also adapting them to the local environment.
Another business opportunity for SMEs in the corporate world could lie in installing decontamination reception areas in large offices where guests could be isolated, disinfected and temperature-screened before being admitted into the building, similar to the security screening currently required in many large office buildings.
Indeed, in the long-run, large office building construction may begin to take these isolation receptions into consideration at the design stage. Office cleaning services that pay more attention to disinfecting surfaces will also be sought after. These large corporations may also want their staff to be trained in such areas as maintaining good hygiene and preparing for future pandemics and other disasters, thus creating e-learning opportunities for corporate training and the development of online training modules adapted to local circumstances.
E-commerce and delivery services
In the more industrialised economies, the coronavirus-related lockdowns have meant a huge increase in the demand for e-commerce services, leading to massive gains for logistics companies, such as Amazon and UPS, that had consistently demonstrated an ability to deliver orders promptly and reliably. E-commerce remains a fledgling industry in most African countries, given the logistical and supply chain challenges in these countries. However, the demand for the services of e-commerce firms is expected to grow significantly in a post-pandemic Africa if they can address these logistical constraints and improve their delivery speed and reliability. In particular, food-delivery services, once the exclusive preserve of the affluent, will enjoy increased patronage at all income levels as people shy away from crowded restaurants. The most successful food delivery services will be those that develop a reputation for high sanitary standards, timely delivery and reasonable cost.
Event catering is one of the fastest-growing industries in many African countries given the important role wedding, birthday and funeral ceremonies play in these societies. Add to this the thousands of conferences, retreats and conventions that are arranged by both government agencies and the private sector, and the sheer size and potential of this market is evident. Following the pandemic, a growing reluctance to participate in large gatherings could result in declining demand for these catering services and may create opportunities for creative new approaches to service the needs of this industry. Virtual participation through remote videotelephony, common during the pandemic lockdown is likely to be a broadening trend.
Due to the imposition of stay-at-home restrictions in most countries, participation at events via Zoom and other videotelephony applications reached an all-time high, and even large global events such as the Spring Meetings of the World Bank in April 2020 were held virtually. More and more, the need for holding such large global conferences and conventions is being questioned, especially when also considered within the context of their climate effects. Firms that can provide videotelephony options with consistent reliability can be assured of a growing demand for their services.
Many African governments have already begun to make available online options for many of the services they routinely provide, such as passport applications, company registration and license renewal. Concerns about the large crowds will push governments to expand these options and they will seek the services of tech companies that can help them accelerate the rollout of more e-government services. Other aspects of the governments’ operations that seek to improve transparency and reduce bureaucracy, such as financial records, personnel records and payroll, will increasingly call for technological solutions.
Entertainment and sports
Netflix and other streaming services enjoyed sharply increased viewership globally during the pandemic lockdowns. With so much demand for new content on these streaming services, African movies and TV shows played to expanded audiences around the world. This increased recognition of what was an already burgeoning African movie industry has led to a global demand for higher quality movies from Nollywood and other African sources, well-known for their compelling plots and brilliant actors. This is likely to lead to entrepreneurial opportunities for the film-producing industry and its entire value chain.
For musical performers a post-Covid-19 Africa will likely mean fewer concerts and live performances and will call for innovative solutions in the live-entertainment industry. An example of innovation in this industry is celebrity performer Erykah Badu’s recent launch of her elaborate “Quarantine Concert Series” which is streamed live from her Dallas, Texas home to listeners who are charged between $1 and $3 to enjoy a live-streamed interactive experience, presumably also reaching a broader audience than would typically attend a live concert. Companies that are able to guide musical performers in how to profitably live stream their performances and make them available to large audiences can help extend the reach of their music.
All sports activities were halted during the pandemic and it may take some time before many would-be spectators become completely comfortable with attending sports events in large stadiums and sports arenas. Videogames are an alternative for sports enthusiasts and indeed many sports personalities helped to popularise them during the forced break imposed on them during the shutdowns. Videogame software design is an area of potential opportunity for tech experts, as is the design of board games or apps for games that can be played on smartphones, especially if these can be adapted to have an African theme. One example of a board game adapted for African users is the first African city edition of the famous board game Monopoly launched in Lagos in 2012.
These are just a few of the opportunities that can be exploited by African businesses in a post-Covid-19 world and is not intended to be an exhaustive list. There are no doubt numerous others in the different sectors of the economy, and with a little thought and some planning the creative and industrious African entrepreneur will discover money-making ways to address the new challenges consumers will need to confront in the coming years.
Bayo Oyewole is the CEO of BayZx Global Strategic Solutions, an international development consulting firm with offices in the United States and Nigeria.
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