As the world grapples with the coronavirus, Uganda’s richest man Dr Sudhir Ruparelia has tipped people on what to do [if they are to survive] in this current slowdown
The virus outbreak which first emerged in the Chinese city of Wuhan last December, has become one of the biggest threats to the global economy and financial markets.
Uganda’s economic performance is influenced by developments in the global economic environment. Therefore, a slowdown in the global economy as a result of coronavirus automatically has a negative impact on the East African country’s economy.
Here are Dr Sudhir’s tips on how to survive the COVID-19 shock-waves:
We are entering into recession period globally and the exception is likely to be India and China with ~2% GDP growth in 2020 which is way below ~5 – 8% in the past several years.
For the benefit of all, I am sharing my perspective on such scenario on few aspects as below:
What will change during the slow down:
1. Spend on luxury will come down drastically
2. Long-term / Capital expenditure such as construction, technology will be almost cut to nil
3. Lifestyle expenditure such as salary, rent, infrastructure, entertainment will be minimised
4. Working capital will be under tremendous pressure. Businesses will go out of business especially those who are riding on borrowed working capital
5. New innovative business models will evolve
What will NOT change during the slow down:
1. People consumption on essentials will continue
2. Rise in Investment on ideas / technology solutions that will improve efficiency
3. Short-term trading businesses with healthy cash flow practices will thrive
4. Rise in investment on spiritual / self-learning practices
5. Value for money products / services will shine
What you should do as an individual:
1. Hold back any luxury / high risk investments where visibility of returns is difficult to predict
2. Minimise expenditure on the routine stuff – keep a watch on your lifestyle spend – ask the question, is it really necessary!
3. Develop yourself on improving competency and developing skills to become more sharper and efficient
4. Share the financial situation with your family members and educate them on the family financial position and the plans to improve
5. Invest – yes invest on the right things. History repeats. Take risks based on thorough research. This is not the time to follow tips.
What you should do as an Entrepreneur:
1. Take care of your employees – communicate more than ever. Be reasonable and transparent with them
2. Use the slow down to improve your processes / people
3. Invest in technology / systems that will accelerate your reach in adding value to your customers
4. Be frugal in working capital decisions and operating expenditure
5. Capital expenditure to be on hold unless there is clear visibility on the associated returns
Let us get smarter by helping ourselves and economy to bounce back stronger.
The planning for the coming foreseeable .🔥🔥🔥🔥🔥
Dr Sudhir Ruparelia
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