How we made it in Africa’s Nelly Murungi asked a selection of African entrepreneurs how the Covid-19pandemic is impacting their operations. Below are slightly edited excerpts of their responses.
Feleg Tsegaye is the founder and president of Deliver Addis, an Ethiopian company that offers online food delivery services in partnership with restaurants.
“A number of the restaurants we work with have almost completely stopped receiving walk-in customers, which majorly impacted their businesses. We’ve already seen quite a few close down for the time being. Ethiopia, being the diplomatic hub of Africa and the base of Africa’s largest airline, is also home to a number of diplomats and expats, many of whom have left Ethiopia, further impacting on the small businesses that relied heavily on their patronage, and will certainly feel their absence. Ethiopia’s experience certainly isn’t unique and we expect that we at Deliver Addis will become much more essential in helping incentivise people to remain at home but, like in most countries, it will be a long road ahead for businesses in Ethiopia.”
Wandia Gichuru is the co-founder and CEO of Vivo Woman, a Kenyan-owned clothing brand operating stores in shopping malls across the country, and Shop Zetu, an online store stocking African fashion brands.
“We started feeling the impact of the Coronavirus in early February, when a container of fabric that we had already paid for was stuck in China because the factories were all closed down. For a business our size, the impact of having our cash tied up and our supply chain interrupted is hugely disruptive.
“Since mid-March, the impact started to be felt on the ground. Traffic to stores greatly reduced and our revenues dropped over 70%. But regardless of revenues, our main concern was the safety of our staff and our clients – and therefore a week ago, we took the decision to close our stores and back-end operations (design, production, etc.) until the virus is contained and have asked our staff to stay home and stay safe. We are still able to process online orders at www.shopzetu.com, but even those have dropped significantly over the past two weeks. We have over 170 staff and a strong brand. We are determined to survive this crisis, save our jobs and keep the business alive.”
Edmund Olutu is the founder and CEO of TechAdvance, a Nigerian payment application development company that provides platforms to enable transaction processing and payment collection, aggregation and reconciliation.
“Frankly [there has] not [been] much negative impact on [my business] … yet. As more people stay home, they consume more electricity, so we have seen something of an upsurge in revenues. Our staff are working from home, so operating costs are also lower.
“However, with a total lockdown planned for the next two weeks, there might be more of a negative impact because people may decide to pay for electricity online and avoid our physical cash offices. Stronger online brands may eat into our market share. So we are watching [the situation] closely.”
Hasnain Noorani is the founder and group CEO of PrideGROUP, a Kenyan-based group invested in diverse sectors, including hospitality, transport and energy.
“The hospitality sector in Kenya generally has been deeply shaken by Covid-19 which continues to spread across the globe. This has severely affected our hotels’ occupancy rates and the revenues hotels are able to achieve per available room.
“To this end, the situation has forced us to send most of our employees on compulsory leave since there are no guests to be served. If the situation continues, we may be further forced to close more of our hotel units temporarily until the situation gets back to normal and we are back to our usual day to day activities.”
“Most of our customers are international companies. All of them shut down operations and sent everyone home. Therefore, we had scaled down by 85%.
“The impact is inevitable for economies around the world. We’re bracing for a recession like all other regions. The biggest hit will be service providers. African leaders must really consider and deeply understand the private sector’s challenges when making the difficult decision to lock down cities and countries. A solution could be to tier business categories into ‘essential’ and ‘non-essential’.
“Providing secure services such as armoured vehicles, guards and executive transport are obviously essential, so there could be tiers of mandates allowing specific departments of companies like ours to still serve. It is time to really live our company mission now more than ever – to serve, provide jobs and elevate the livelihoods of our communities.”
Jonas Schwarz Lausten
Jonas Schwarz Lausten is the co-owner of Nordic Hotels, a collection of boutique hotels in Nigeria.
“It’s clear that Covid-19 has an impact on the hospitality and travel industry, both locally in Nigeria and internationally. The financial impact can easily be characterised as devastating.
“With more than 90% of companies having cancelled or postponed their international business travel and with the closure of international flights in and out of Nigeria, it’s clear that we are feeling the heat of the world-wide economic fallout due to Covid-19. We do hope, and somewhat expect, travelling to start normalising within the next four to six months.”
George Gachara is the managing partner of HEVA Fund, which provides financing to early-stage businesses in the creative industry in East Africa.
“In light of recent developments concerning the coronavirus disease, we are taking necessary precautionary and safety measures to ensure that the wellbeing of our team, our beneficiaries and all those we interact with remains a top priority.
“We are experiencing the adverse impact on the creative sector and ecosystems, and as a result, in order to provide relief to our beneficiaries, we decided to suspend all interest charges owed to us for the period of the next 60 days – in line with the national emergency declarations. Furthermore, we are looking to extend a repayment holiday, until the situation is stabilised.
“We are aware that as a result of the crisis, creative business cycles have slowed down or stopped. We are in conversations with our board, our stakeholders and the relevant government agencies, to roll out targeted interventions to protect creative labour from job losses, to forestall loss of capital and to help build the resilience of practitioners and businesses to revive after the emergency is over.”
Manuel Koser is the co-founder and managing director of Silvertree Holdings, a South African-based investment firm that focuses on growing early and mid-stage companies.
“This has been a crazy week in the world. To many of us it felt like a whole year in just a week. But with all the scary news and huge changes, it’s worth remembering that South Africa has acted much faster than many other countries, and so there is hope that we can avoid the worst.
“Within Silvertree’s portfolio, too, it’s been a dramatic week. Customers are definitely moving their buying online in order to minimise their exposure to risk. Faithful to Nature has seen order volumes double in the last two weeks; PetHeaven has seen a huge increase in sales despite most customers being on regular subscriptions for their pet supplies; and UCOOK has had record order volume on cook-at-home mealkits.
“PriceCheck has obviously seen vastly increased traffic, and has sent 75% more online users to merchants this week compared to just last week. Leading search terms are of course hand sanitiser and face masks, but also non-contact thermometers and even isopropyl alcohol blend, as people are evidently trying to source ingredients for sanitisers. Inverters and generators, leading search terms just a few weeks ago, have slowed down a lot.
“Particularly fast-moving products on Faithful to Nature are hand sanitisers and toilet paper, but we’re also selling immune support (e.g. vitamin C) as fast as we can source it, and are starting to see upticks in home cleaning, household essentials, personal care and pantry essentials.
“Our big challenge has been keeping fast-moving products in stock, and we’ve had to limit sales volume on some, and spend lots of time talking to suppliers. Our warehouse teams have so far been able to keep dispatching orders on time, despite the flood – unlike some online retailers elsewhere in the world that have had to close the sites for any new orders.
“Between managing the extra order volume, we’ve also had to focus on staff and customer safety and continuity in our businesses. A few of the things we’ve done include:
- Mandatory non-touch temperature screening of anyone entering any company building; hand sanitiser, regular hand washing, protective clothing (e.g. masks) for interactions; and a dramatic reduction in anything touched by multiple people. For example, we’ve closed office kitchens and required staff to bring their own cups and mugs to the office
- Many of our warehouse teams have moved onto shift-based working, to reduce the number of people in contact with each other
- Most staff that can are now working from home
- Plus, we’ve been working intensively with suppliers and delivery partners to make sure they have the same measures in place, and to help them scale up to meet increased demand.”
Brigitha Faustin is the managing director of OBRI Tanzania, a company that manufactures edible oils.
“As I am operating in the agri-food space, empty shelves can be frightening but empty fields would be devastating. The pandemic has brought fear to most of us. We depend on small scale farming and the fear is that if we skip this planting season then there is a great chance that the pandemic might not kill us but rather hunger. We are challenged to be more innovative to be able to survive during and after this Covid-19 crisis.”
Felix Mbugua is the co-founder and CEO of Legibra, a technology firm headquartered in Nairobi, Kenya. Legibra specialises in domain registration, hosting, website design, and web application development.
“Covid-19 to the ICT industry is a sword that cuts both ways. If you look at it as a business, the impact is as negative as it is for any other business in any other sector of the economy.
“However as a business in the ICT space, Covid-19 is more of an opportunity because continuity of businesses delivering products and services as well as companies continuing to be operational, is currently very heavily reliant on technology. At Legibra, we expect to register and host more domains, design more websites and generally increase uptake of our range of products and services.”
Nwamaka Okoye is the co-founder and managing director of Housessories, a Nigerian furniture manufacturing and interior design company.
“For over a week, watching what’s going on the news, I have grappled with the apparent conflict of making profit against the welfare of my people. The welfare of my people has won hands down. We are winding down operations today. This is because our factory staff have to ride the bus to work every day and exposing them to the dangers of the virus does not make any moral sense.
“Because I believe there will be severely restricted movement for between two weeks to a month, we have made arrangements to provide them with 25kg of rice each (as a palliative measure) and a salary advance so they can purchase necessary supplies for the inevitable lockdown.”
Gregory Chama is the founder and CEO of City Drive Rent a Car Ltd, a Zambian company that offers vehicle rental solutions.
“It’s really sad what’s going on. Our industry has been hard hit. I have fought many battles in my entrepreneurial journey but this pandemic has posed the greatest existential threat to our business. There is too much uncertainty. Our sales have dropped by more than half and we have had unprecedented cancelations of bookings.
“Unfortunately we have had to let go of some of our employees to reduce costs and to remain afloat. We are also in talks with our creditors to restructure our loans or get a payments holiday. We are in survival mode.”
Fred Swaniker is the founder and CEO of the African Leadership Group, which consists of: the African Leadership Academy (ALA); the African Leadership University (ALU); the African Leadership Network and the ALU School of Business.
“Last week we transitioned all in-person classes at ALU and ALX to remote learning channels. In light of this, we sent 300 students from our Mauritius and Rwanda campuses home to 40 countries to finish the term online. We also asked our team to work from home and banned all business travel as of 16 March. Because we were already utilising technology in our learning and already had many remote team members, it has been a fairly seamless transition. However, we know this situation is not ideal for anyone, and our hearts go out to everyone who is struggling at this unprecedented time.”
Hannah Clifford is the director of Nairobi Garage, a co-working space with three locations in Nairobi.
“Being a workspace for a lot of different businesses, we remain open during this time, in order to provide our members with that service. However, many companies are working from home. We’re also not hosting events and visitors and drop-in customers are restricted for now, just to allow us to keep the spaces as safe as possible for members to work from.
“The uncertainty of when things will return to normal is the biggest worry right now, as well as the overall effect this will have on people’s livelihoods – there are many people in Kenya living hand-to-mouth and it’s worrying how they will cope if this situation persists.
“Right now we are focusing on doing everything we can to continue offering value to our members – we’ve moved our events online; our members are offering up their services to other members for free or discounted. We are quite a strong community, even when not physically together, and that’s really good to see during this time. And we are also optimistic – in times like this, the benefit of flexible workspaces are clear, especially for those that have previously been sceptical and are currently in very rigid and costly setups.”