Leading figures in Nigeria's business ecosystem have offered crucial strategies to bolster the resilience and sustainability of Nigerian startups navigating the current turbulent economic climate. These insights emerged during an Executive Mixer, jointly hosted by Spacefinish and Campus HQ at Flutterwave's Lagos headquarters.
The high-profile event convened leaders spanning the technology and financial sectors, fostering a crucial dialogue on practical approaches for startups to weather the storms of currency volatility, shifting government policies, and heightened investor scrutiny.
Navigating Regulatory Landscapes:
Oluwafunmilayo Olaniyi, Senior Vice President of Business Development at Flutterwave, underscored the paramount importance of startups cultivating robust relationships with regulatory bodies. She cautioned that the dynamic nature of policy-making could render business models obsolete overnight, stressing the necessity of close engagement with regulators to stay abreast of impending policy changes that could impact operations. Olaniyi asserted that proactive communication with policymakers would significantly enhance a startup's ability to adapt swiftly to unforeseen regulatory adjustments.
Shielding Against Currency Fluctuations:
Dr. Austin Okpagu, Country Director at VertoFX, advised startups to implement astute treasury management practices, advocating for the diversification of holdings across a spectrum of currencies. Given the volatility of the Naira, he recommended that businesses with predominantly Naira-based revenue should strategically hold funds in multiple currencies.
Notably, he pointed out that even the US dollar no longer offers absolute security in the current economic environment. Dr. Okpagu highlighted the pivotal role of modern fintech platforms in facilitating this diversification, enabling startups to store and transact in up to 50 currencies without the cumbersome need for numerous bank accounts.
This approach, he explained, effectively mitigates the adverse effects of exchange rate shocks and streamlines cross-border payment processes. Furthermore, Dr. Okpagu emphasized the critical need for agility, stating that startups can no longer adhere to rigid quarterly strategies in the face of constant global economic shifts that necessitate more frequent strategic revisions.
Mr. Foluso Phillips, Founder of Phillips Consulting Limited, shared his perspective on the burgeoning frontiers of business in Africa, identifying the health and education sectors as prime areas for future growth. He posited that evolving consumer priorities are leading to increased spending on health and education, suggesting that organizations capable of effectively addressing these fundamental needs are poised for success.
Fortifying Governance for Longevity:
Mr. Jude Chiemeka, CEO of the Nigerian Exchange Group (NGX), addressed the critical aspect of long-term sustainability, emphasizing the significance of sound governance structures and the adoption of ESG (Environmental, Social, and Governance) practices.
He strongly advocated for companies to consider listing on the NGX, highlighting the dual benefits of price discovery and, more importantly, the imposition of a robust governance framework. Chiemeka argued that a strong governance structure forms the bedrock for enduring enterprises, making listed companies with transparent governance more attractive to institutional investors who prioritize trust and accountability. He noted that companies listed on the NGX's premium board are already witnessing increased funding due to investor confidence in their governance practices.
In her opening remarks, Oluchi Ajala, Managing Director of Spacefinish, articulated the event's core objective: to equip startups with the essential tools and insights required not only to survive the present economic challenges but also to flourish in the long run.
The Executive Mixer served as a vital platform for knowledge sharing and networking, empowering Nigerian startups to navigate the complexities of the current economic landscape with greater resilience and strategic foresight.