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The impending recession and how governments can assist businesses



While Nigerians were still battling with the effect of the lockdown of economic activities imposed by the federal and state governments in their efforts aimed at containing the community spread of the coronavirus disease (COVID-19), the federal government relayed the scary piece of information from the World Bank that the country’s economy would go into recession as a result of the coronavirus pandemic. 

Mrs Zainab Ahmed, the Minister of Finance, Budget and National Planning, at the briefing of State House correspondents after a recent NEC meeting, said the fall in crude oil price in the international market, as a result of the COVID-19 pandemic, has worsened the economic situation of the country, leading to World Bank’s prediction of recession for Nigeria. According to her, “The World Bank maintains that the impact of the COVID-19 on Nigeria will lead to severe amplified human and economic cost, which will move the country into a recession.” 

This is not cheering news at all, considering the facts that businesses in the country are yet to fully recover from the recession of 2016/2017, that economic recessions have lasting consequences on the people and businesses, and that the looming economic crisis would inflict more misery on the country through an increase in the poverty rate. Moreover, the fact that is making this prediction even scarier is that, while the country is yet to officially fall into recession, businesses in the country are already feeling the brunt of the COVID-19 economic lockdown.

Recently, one of the biggest banks in the country retrenched quite a huge number of its staff and placed those staff who were not retrenched on salary cuts of up to 40 per cent, citing the effects of the COVID-19 economic lockdown. Other banks and financial institutions were planning theirs and would have announced their own measures if the Central Bank of Nigeria (CBN) and the National Pension Commission (PenCom) did not intervene and order the banks and pension funds administrators under their respective purviews, not to layoff or place salary cuts on any of its staff as a result of the effects of the COVID-19 pandemic without the regulator’s express permission. 

Also, the Federal Airports Authority of Nigeria (FAAN) recently announced a salary cut for its workers. In a circular to staff dated May 19, 2020, the Management of FAAN said the reduction in salaries is due to airport closures occasioned by the coronavirus pandemic. The memo, which was signed by Musa Mohammed, the agency’s General Manager of Administration, read thus: “This is to notify all staff that due to the dwindling revenue generation amidst COVID-19 pandemic, management may not be able to pay full salary to staff as from May 2020.” It took the uproar by Nigerians for the government agency to rescind on this decision.

These employees could be said to be especially lucky, as many of their contemporaries in other sectors of the economy are not so lucky. Many micro, medium and small scale enterprises (MSMEs), and even the large corporations, cutting across most sectors of the economy have either formally terminated or placed between 30 to 70 per cent of their staff on no-pay forced to leave as a result of the loss of business on account of the effects of the pandemic. Those most affected are the workers in the private sectors of aviation, interstate transportation, marketing and events management, food vending, hospitality and entertainment, hospitals businesses, etc.

The harsh consequences of a recession are a major reason the government must work to ensure that the country does not get into a recession, and in the event, this COVID-19-induced recession happens, to ensure that it gets out of it as quickly as possible. One of the surest ways of making this happen is for the government to support and empower the businesses, especially those promising ones in the MSMEs sector, and major start-ups etc. For example, Jumia Nigeria and many other businesses, especially in the e-commerce and logistics sectors have shown tremendous promise in the face of the pandemic thus pointing to the possible areas that government could extend support to in its efforts towards curbing the adverse economic effects of the pandemic in the country.

The theory of the interrelatedness of the macro and microeconomics of every country shows how effective this approach could be in our current situation. In Nigeria, according to the Nigerian Bureau of Statistics (NBS), the MSMEs sector has over 37 million businesses and start-ups like Jumia Nigeria, who employ over 54 million skilled and unskilled labour and contribute about 54 per cent to GDP of the country. This means that if this sector is empowered to run optimally, it will obviously boost the country’s GDP, thus helping in keeping recession at bay.

One of the major effects of the COVID-19 lockdown and the recession that may follow on businesses, especially the MSMEs is the solvency issues, resulting from low patronage, operational losses and reduced access to financing. Small businesses and start-ups are, in many ways, the hardest hit by a recession. Without the financial or negotiating power of larger corporations, and frequently with severely restricted credit flows, many MSMEs will be struggling to prevent layoffs or cutbacks.

Prior to this period, there still existed a huge gap between the financing needs in this sector and its present realities, which Godwin Emefiele, the Governor CBN, recently put at N48 trillion. The government can address the solvency issues by boosting the MSMEs’ access to finance, through special funding arrangements like funds provision, low-interest rates, credit guarantees and an extended moratorium on loan and credit facilities. 

Almost all countries across the world that are being faced by similar predictions, including Nigeria, have created special bailout measures to ameliorate the economic effects of the pandemic. In Nigeria, however, the N50 billion intervention fund created by the CBN as a stimulus package for families and MSMEs is relatively too meagre to make the needed impact in the economy. The government should up this ante to reflect, at least, the current financial needs of the MSMEs sector.

Also, governments can also institute some tax measures like tax and duty waivers on some categories of business, tax holidays and reduction in/extended filing time off, tax obligations for businesses in the country. Some analysts have advocated for tax relief for businesses in the frontline of the covid19 like Jumia and other eCommerce companies because they have been playing the role of driver and aggregator for a lot of MSMEs/SMEs. According to them, a well incentivised private sector will not only kick-start the post-COVID-19 economy but will also boost the revenue of the government to ensure that recession, and its ugly consequences are averted. 

The catch is this, a good proportion of the government revenues comes from defined percentages of the company profits paid as taxes, and the more the profits these companies make, the more the taxes they pay to the government. So, when the government assists these businesses reduce their cost of operations by adopting any of these recommendations, the businesses will make more profits and the government, in turn, will increase its revenues.

By Olusegun Koiki

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Jumia Offers Exciting Deals to Customers With Naija Shopping Festival Campaign




Nigeria’s leading e-tailer Jumia, is offering a thrilling shopping experience to Nigerian customers with the Naija Shopping Festival campaign, running from the 12th of July to 29th of August.

The festival offers customers a unique opportunity of a good bargain on every product of their choice at the best market prices.


The campaign period (12th of July to 29th of August) is a window of opportunity for parents to leverage price discounts for holiday play items and back to school materials for their kids. It is also an ample opportunity for those working on their beach body for the holiday to get sports gear at the best prices. Customers are expected to download the Jumia App to fully exploit the benefits of the shopping festival. 



Head of Brands at Jumia Nigeria, Moyosore Oduwobi while commenting on offers available during the festival period said, Jumia marketplace offers simplicity and affordability to the Nigerian customers, and is offering them more on a wider range of products during the festival. 


Naija Shopping Festival is every shopper’s dream. Every product you can think of that you’ll need this season, it’s available on Jumia. It’s a good opportunity for customers to delve into the simplicity of the experience and the affordability we offer. It’s our identity to give customers unbeatable prices from the comfort of their homes, and this and more is what they will be getting during this festival,” Oduwobi said. 



Some of the partners for the Festival include Pernod Ricard, Edifier, Adidas, Nivea, Xiaomi and Fanswedy.


The campaign offers customers amazing shopping experiences and benefits such as Daily Flash sales, free shipping on selected brands, N100 clearance sales, live giveaways and surprises packages for shoppers on the weekends.

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Customer Appreciates Service Delivery Of Nigeria’s Ecommerce Market Leader




E-commerce is still in its infancy in Nigeria and Africa in general. Despite this, many would agree that a lot of progress has been made in the industry.

What we have today is a big leap to what obtained twelve years ago. More consumers are onboarding the e-commerce train. The hardest skeptics are beginning to have a taste of what online shopping entails.

Urban centers are gradually becoming a beehive of e-commerce activities, as the majority of small businesses now showcase their wares online. Several logistics brands are springing up to meet the delivery demands of sellers and customers.

Hardly would you ply major roads in states like Lagos, Rivers and Abuja, without coming across a delivery van or motorcycle. Their presence is an indication of e-commerce momentum in the country.

More important is the improvement on service delivery by the industry players. The early days of online shopping was fraught with complaints. Late delivery of orders, wrong items and payment itches were prevalent at the time. Though these issues are still being experienced at intervals, it is fair to say that online platforms have put in effort to reduce such occurrences.

And in cases where this happens, measures are in place for a speedy refund process. These efforts are also being appreciated by customers. “I have been using Jumia for like six years now and my experience with Jumia has been nice.

Even when I returned my order, I got my refund back less than the time they gave me. Even on their JumiaPay wallet, which you have to pay online before you get your order, I have had a very good experience with them,” said Ogechi Celestine, a Civil Servant resident in Rivers State.

Another interesting way e-commerce brands are improving service delivery and customer experience is pick up stations. With a station close by, a customer can walk in and pick his item. It takes e-commerce closer to rural residents and further eases the deal for urban dwellers.

“Today is my first time coming to their pickup station to pick my order. I give kudos to Jumia and the team. They should keep it up,” Celestine added. The initiative is not only taking the service closer to customers, but also having ripple impact on small businesses.

Though the e-commerce industry still has a lot to improve on, the work being put in by the major industry players gives hope of a good future for e-commerce services in Nigeria.

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The path to financial inclusion holds different marketplace barriers and opportunities in different countries, but the push continues because of proof that an increase in economic activities among the financially vulnerable can reawaken a comatose economy.



For Nigeria, the last three years have seen significant growth of the financial inclusion rate from 56.8% in 2016 to 63.2% in 2018. FirstBank’s *894# USSD banking service is playing a key role in it.


FirstBank’s *894# USSD banking initiative is already averaging about 99 million transactions monthly, with a naira worth of (N’m) 370,543 on these transactions. This figure includes the undergraduate doing a mobile airtime recharge; the trader receiving a mobile payment from a customer; the IT person hurriedly buying a data bundle to keep business afloat; the anxious father paying his daughter’s hospital bills for treatment to commence, and the busy worker in Lagos transferring money to his parents in the village since he cannot get to a banking hall.


This is just a rough sampling of the financial transactions that amounted to over N3.6 trillion in transaction value on the *894# USSD banking service in 2020. There is practically no financial emergency that the USSD service does not come in.


The problems that the *894# USSD service from First Bank of Nigeria Limited is solving is the only justification for the rapid traction it has gained since it was introduced in 2015. It is easy to see Nigerians trust and confidence in the USSD system, with the Bank rapidly growing from 9.5 million customers on the USSD feature to 12.26 million customers within the last year. Over 1.02 million of the figure, are customers who registered in the first 6 months of 2021.


The first and perhaps the most attractive feature of USSD banking has got to be that it can be done from any kind of phone and without any form of internet connectivity. Although smartphones are getting more common, there is still a high poverty rate and many financially vulnerable people who cannot access internet banking. The internet penetration in Nigeria is still below the ideal, so users have to deal with poor internet connections in some areas.


That is why this kind of banking service that can be accessed without internet connectivity is ideal for the financial inclusion drive. The *894# USSD feature can be used across the four major GSM network operators in the country, meaning there is no added demand on the users.


Getting started on the service is as easy as dialling *894*0#, and creating a pin. With that done, you can do airtime and data purchase for yourself and other parties, transfer funds to other accounts, make a BVN enquiry, check your account balance and get a mini statement.


For non-customers, this feature allows you to open a bank account in a couple of minutes without having to visit the banking hall. You can open a bank account, receive your account number immediately and start transactions on it right away. The claims of “instant banking, anytime, anywhere” can’t get more real than this.


There is even an added security step, requesting a second-factor authentication (2FA) for transfers above N20,000 as a way to secure customers from being ripped off their funds. There is a cumulative maximum daily transfer limit of N100,000 to both FirstBank and other banks accounts.


How does FirstBank USSD improve the lives of Nigerians?

For one, the data being generated through this service is sufficient to help the bank understand its current and prospective customers and develop products that suit them.


Traders and small businesses can also get a Merchant ID which customers can use to make payments for products and services. This of course is better than having to send one’s account details to countless customers, even without knowing whether or not they are ready to make their purchase.


To ensure customers can meet emergency needs before month-end, the Bank’s FirstAdvance service is at their fingertips. FirstAdvance is a digital lending solution designed to offer convenient and easy access to cash for payroll customers awaiting payment of their salaries.


Offered through the Bank’s USSD Banking service and leading banking app product, FirstMobile, customers are exposed to a range of loan offerings which put them at an edge in meeting immediate financial needs. To initiate the service through the USSD banking service, the customer is to dial – USSD CODE-*894*11# or *894#. The service is open to customers with a salary account domiciled with the Bank and have received salaries for the last 6 months at the least.


There are much more about FirstBank’s *894# USSD banking that puts customers at a distinct advantage in carrying out their daily personal, financial and business activities; meeting unforeseen emergencies, and carrying out a wide range of transactions – with so much fun and convenience – irrespective of where they are in the country.


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