Nigeria Should Be Handled Like A Startup In Distress: Lessons From "Africa's Amazon", Jumia
Approaching the Nigerian situation the startup way.
Recently, I read an article on TechCabal about how the current CEO of Jumia is working hard to ensure "Africa's Amazon" survives Africa's current harsh economic climate. And what came to mind was Nigeria.
I am not an economist or financial expert. However, I have enough common sense, just like any ordinary person, to understand how things should work.
One of Jumia's strategies, among others, is to cut down on the cost of operations within the company.
They even went as far as forcing 60% of their top management in the United Arab Emirates to work on the African continent instead of from an office in the UAE to save costs and so that they could also see with their eyes, taste with their tongues and feel with their hands the current situation of things in the market.
Nigeria has to cut down on the cost of governance and rein in unnecessary profligacies.
When the body is in shock, what the brain does is quickly direct blood to vital organs of the body.
The brain, heart, lungs, liver, and kidneys are the organs that receive more blood during shock. This same physiological strategy should be used in the Nigerian situation.
The country is currently in a state of economic shock. And what we must do is direct all our efforts to the vital organs of the country.
Some expenditures don't make any sense.
Things we can do without for the next eight or more years.
What's the essence of all the luxury for government officials? And exorbitant expenses on things that don't add to the country's welfare.
Instead, money should be spent on boosting internal production, beefing up security, and strengthening the education system, health, and other vital parts of the economy.
This is how you handle a startup in financial distress.
When startups face financial difficulties, they try to manage blood (money).
They cut down on unnecessary spending, and the founders, co-founders, CEOs, and top executives sometimes even have their paychecks slashed and fat compensations deleted or drastically reduced.
Unnecessary perks and company benefits that are not needed at the moment are put on hold so that resources are directed to the vital aspects of the company.
Nigeria needs to change its priorities. We have been operating the same way for over fifty years, and see where it has brought us.
In startup business, you re-evaluate strategies all the time. Once a strategy is not giving the required results, it's either re-designed or changed entirely.
When startups continue to use ineffective methods and strategies, they fail. The same principle applies to the handling of a country's economy.
I might be wrong, and my analysis and exegesis may be a little skewed or inexperienced; please pardon me.
However, I feel that common sense should tell us what to do in the Nigerian situation.
Cutting down the cost of governance is one huge step towards redirecting our country to the right path.
It may not immediately cure the problem, but it will send a message to everyone that we are serious about rescuing our country from the doldrums.
When startups begin to suffer financially, one of the first things that should come to the minds of serious founders is how to manage costs.
Startups are very expensive to maintain. Only a few of them make it out of the days of darkness into the light.
Jumia was launched in 2012, when the Nigerian economy was on the verge of a restart.
There were government reforms put in place that created a conducive environment for companies and startups to grow.
Jumia and a couple of other companies at the time benefitted massively from this development.
There was a lot of investor funds at that time, and Jumia had a lot of cash in its bag.
Jumia began to face a significant struggle when it was exposed to the world as it was listed on the New York Stock Exchange.
From that point on, its weaknesses and fragile structures were put to the test, coupled with a changing economic situation in Nigeria, Africa, and globally.
Most of the startups you see around you are just standing on the weak foundations of heavy PR, publicity, and marketing. A lot of them will soon come crashing down.
Nigeria should be handled like a startup in distress.
If the leaders in this country see Nigeria as their only company, their only investment and approach the situation like a life-and-death situation, we will surely experience the difference.
It might not be an immediate cure, but they would have succeeded in preventing us from travelling further down into the valley.
This article is in no way a political one. So, I am not pointing fingers at anyone or trying to make one party look good or bad.
This here is just common sense.
As we gradually crawl out of 2023, which has been a very tough year for Nigerians, we hope that the current leadership will take running the country seriously.
Our economy is in a state of financial shock. And the only way we can survive is if we direct our focus to the most important sectors of the country.
Loans will not solve the problem if the haemorrhage isn't arrested immediately. Yes, we know that there are still very few folks who are being enriched by the current situation in Nigeria.
However, I want them to know that if we continue like this, there won't be a place we call Nigeria any more.
There's a pressure limit to what a system can take or bear. We are already at our breaking point.
It's a fatal shock. And in medicine, if nothing is done to avert a state of shock quickly, death can come in really fast when all end-organs begin to shut down!
The World Is Changing
The days of loans and external help are slowly coming to an end. We all should be able to read the handwriting on the wall.
We can't continue to rely on loans from China, the World Bank, or wherever. There's already too much in our debt bank as a country that has all the natural resources to become the biggest black economy on earth.
Global politics is turning into something else, and with the war in Ukraine and recently in the Middle East, tension building up in the far East, and current instability in most countries in West Africa, there's a lot of shifting going on behind closed doors, and countries like Nigeria have to start to learn how to stand on their own.
There's absolutely nothing wrong if all very high government officials and politicians in Nigeria take a stand and insist their compensations and allowances are significantly reduced for the next four or eight years.
It won't make them poorer.
"Of course, I'm interested in my salary. What matters to me is that we get back on track on growth." Francis Dufay. CEO of Jumia.
Francis Dufay's salary was significantly reduced as part of the move to manage resources in the company and prevent it from imploding.
"At least two of Jumia’s non-executive board members have also waived all or part of their hefty compensation packages in the last two years to help the company conserve cash."
It's all about making the country work.
Until Nigeria has leaders who will handle it like a startup in distress—nurturing it like it's their only business—we might still struggle as a nation.
Thank you for reading.
Sometimes, I write about politics, country, and economics. It's always on a surface level—nothing deep or serious (really).
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