Outpacing the trend: How Agribusiness Startups can stay afloat Despite COVID-19

COVID-19 took planet Earth by storm. like any other pandemic, The virus came with no warning signs, no prior notification and no advance indicators. It took us all unawares and yes!!! it is hitting us all so hard. The announcement February 14th 2020 of the first case of the virus in Egypt North Africa was greeted with a mixture of fear, fright and even despair across the continent and within months of its first confirmed case, the virus had made inroads into almost every one of Africa’s 54 countries

Unlike most European countries where COVID-19 response initiatives were accompanied with complimentary bail out schemes for citizens and most especially the unemployed and young enterprises, most African countries plagued by challenging national budgets and relatively young economic sectors are most likely to have little or no reservese for the economic consequences of any response initiatives being put in place to contain the spread of the virus. It goes without saying therefore that the continent is likely to witness far reaching economic and socio-political repercussions of a possible spread of the corona virus despite impressive reports of low infection and death rates when compared with other countries around the world.

While the virus has been proven to have no direct negative effect on food quality and production capacity in terms of soil fertility, The application and respect of corona preventive measures in the continent like #stayathome,  #nohandshakes and the closure of large gatherings such as markets, bars etc are likely to have serious short and long term negative effects on the continents agricultural sector and agribusiness in particular and on startup enterprises as a whole most of which are still plagued by financial instability, lack of infrastructure, inadequate adaptation capacity and unstable market environments.

However, amidst the talk and scare about the spread of COVID-19, There are a good number of measures that agribusiness enterprises and startups in general around the continent can adopt to contain and mitigate the likely and actual impact of COVID-19 on their enterprises. Some of these measures include but are not limited to the following:

  1. Digitalization of trade: One ‘positive’ outcome of the spread of COVID-19 is the adoption of digital methods of doing business by enterprise and companies around the world. With the use of technology, startup enterprises can communicate, correspond and deliver output to their customers almost as effectively without any physical contact and/or any overcrowding. Most enterprises around the continent are fast developing mobile applications, interactive websites, social media marketing strategies and a lot more to help mitigate income loss as a result of the virus. Agribusiness startups in the continent can also incorporate these technological innovations most of which will serve to increase customer engagement even when the virus is eventually contained.
  2. Grant seeking, mobilization of bail out funds from Donors: there are a few non-profit structures and individuals providing grants and support to startup enterprises and individuals in the continent to help them stay afloat in times of the Corona virus. Other bodies like banks and financial institutions are lessening interest rates on loans as a corporate measure to help enterprises in these COVID times. Aspects like staff cost, recurrent cost and depreciation are likely to cause an increase in expenditure for enterprises but without corresponding increase in output and income given the #stayathome measures being implemented around the continent. Startup enterprises can avail themselves of grant opportunities and other funding mechanisms during this period to cover such recurrent cost. Banks, grant-making organization and individuals are also encouraged to invest more in economic bail out for struggling startups in the continent especially in times like this.
  3. Diversifying Production, investment: while it is crystal clear that the COVID-19 is bound to have a serious effect on markets and profits for enterprises in the short term, agribusiness enterprises and startups could however take advantage of the shutting down of markets caused by the virus to diversify production and increase investment in long term projects and schemes. Enterprises hitherto involved in agricultural trading for instance could invest in agricultural production like setting up of farms and testing out new crops and increasing investment in cultivation. These measures though with little or no short-term profits can go a long way to produce huge long term benefits for agricultural startups in the continent. This is especially applicable in countries where physical markets are shutting down but without any complete ban on physical movement. This could be a good time to sow the seeds that will yield the post corona profits.
  4. Stock taking, evaluation: This is a very important element in business that most startups often overlook including agribusiness startups.  The quest to get to the market or attend to the increasing demands from customers has often pushed many enterprises to disregard the importance of stock taking as a measure of assessing growth, identifying gaps and re-strategizing. With the implementation of #stayathome measures around the continent and the partial closure of the markets, this could be a good time for enterprises to conduct internal audit, stock taking, evaluation and assessment and develop new strategies for growth based on lapses identified.
  5. Research, Study and Advancement. Yes, as a result of the Corona virus, companies are taking a break, markets are closing down, people are loosing contact and communication is weakening. But one thing that will not be quarantine these COVID times is the Internet. The biggest reservoir of knowledge available for humanity. While it might be costly affording internet access at a time of almost no profits, such investments might actually be worth it both in the short and long run. This quarantine period could actually be a good time to invest in personal capacity building, business studies and short courses on anything you feel passionate about. thankfully there are quite a good number of self-paced learning courses on the internet that could be readily available for us at this time. Such investment could be good for the advancement of your enterprise and even for your personal growth event when COVID-19 becomes defeated forever. It is not all bad news after all.

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