P&G Nigeria CFO: Steering Africa’s business recovery

Finance teams need to consider macroeconomic vulnerabilities and consumers’ lower purchasing power in planning for recovery.
Eniola Ogunbodede, ACMA, CGMA, Nigeria CFO (associate director) at the consumer goods giant Procter & Gamble

With spiralling public debt levels, high unemployment, and an acute overdependence on commodities exports, Africa’s major economies are particularly vulnerable to the supply chain disruptions triggered by COVID-19.

For Nigeria, Africa’s largest economy and biggest crude oil producer, the dual shock of the pandemic and a collapse in oil prices threatens to drive the country into a deep economic downturn. In South Africa, the region’s second largest economy, the government’s strict lockdown has accelerated an economic contraction that has been underway for some time. The country had record high unemployment levels at the end of 2019, coupled with rapidly declining business activity in the face of frequent power outages.

For Africa’s finance teams, these macroeconomic vulnerabilities will play a major role as they steer companies through the pandemic and its difficult aftermath. To find out more, FM magazine spoke to Eniola Ogunbodede, ACMA, CGMA, Nigeria CFO (associate director) at the consumer goods giant Procter & Gamble.

What are the major challenges facing African finance teams during the crisis?

Ogunbodede: There are several challenges that come with a crisis, ranging from supply chain disruptions, devaluation of the local currency, securing cash, and running operations and business processes required to keep the business afloat. 

The biggest challenge would really be the uncertainty. There is simply no playbook for a crisis of this magnitude. The disruption to business as we know it is massive, and in the current crisis, this will continue to evolve even after the worst of the pandemic is over.  

On a positive note, the crisis has revealed the vast opportunities that technology can offer business: the seamless shift to remote working and ability to manage complex operations, driving decision-making, and engaging organisations and teams. With the unfolding realities of the crisis, I expect to see even more innovative approaches, some of which will become the new way of doing business.

How can African finance teams help their companies pull through this tough period?

Ogunbodede: Considering the vulnerability of our markets, this crisis calls for resilience from African finance and business teams, discipline in making tough decisions, and defining actions to successfully navigate the crisis. This starts with ensuring critical business operations can be carried out under the current circumstances and where needed, developing innovative solutions to support operations.

A key priority and focus area for all businesses now is managing cash flow to keep the business operations running within the confines of the market realities. This requires assessing key areas where immediate action may be required, such as working capital management; securing payments from customers and minimising exposures to bad debts; inventory management given the impact of the crisis on selling activities; securing processes to manage payables; enabling replenishment of materials for production; reduction in capital expenditure (unless absolutely critical or relevant in the current crisis); and sustaining profit margins in the face of cost inflation and devaluation.

What are the unique features of Nigeria’s economy that finance teams have to navigate?

Ogunbodede: The Nigerian economy is unique in several ways that are important to consider in the context of this crisis. Having gone through a recession a few years ago and with a high poverty rate, the economy was in a slow recovery prior to the pandemic. This is expected to aggravate the situation, with recession looming and increased pressure on the purchasing power of consumers.

Another major feature of the economy is the high dependence on oil exports as the key source of revenue and foreign earnings. During the crisis we have seen oil prices plummet and a glut driven by the low demand, significantly increasing the vulnerability of the Nigerian economy. The effects of this are similar to the 2016 crisis, when the naira devalued by around 80% and the market experienced a huge forex liquidity crisis.

In addition, Nigeria’s low levels of infrastructural development pose a threat to the economy. In the event the crisis escalates to levels seen in some more advanced countries, the burden on the government and its resources will be significant and will have a proportionate impact on the broader economy.

How should these factors guide Nigerian finance teams during the crisis?

Ogunbodede: Finance teams have the responsibility of leading their businesses through the crisis. The features unique to the Nigerian business environment are critical considerations in scenario planning and risk evaluation. Considering these factors are beyond anyone’s span of control, they need to be layered on top of the business realities to capture their potential impact and define a clear plan of action.

The extent to which these factors impact the business will be determined by the relative strength of the business pre-crisis, and the industry in which the business operates. Finance teams will need to evaluate their company’s alignment with these macroeconomic realities in defining the strategic direction in order to secure the long-term viability of their business.

For example, the impact of lower purchasing power among consumers will be a key consideration in evaluating the business recovery plans — and options to recover from the effects of devaluation on the business. Learnings from previous crises provide a good basis for scenario planning and identifying relevant variables to consider. The current crisis will also generate new habits and behaviours, some of which will positively impact certain industries — and this will be key in evaluating future business plans and strategies.

Overall, finance professionals are uniquely positioned to steer businesses through the crisis. Our training equips us with the skills to identify key risk factors, define operating principles for crisis management, evaluate the range of options, and propose key actions for the business while staying agile to react to evolving market conditions.

— Jessica Hubbard is a freelance writer based in South Africa. To comment on this article or to suggest an idea for another article, contact Alexis See Tho, an FM magazine associate editor, at