How businesses in East Africa can adapt and built resilience in the face of COVID-19

The COVID-19 pandemic has sent shockwaves through East Africa, impacting businesses at every level from macroeconomics to consumer behavior. With global shocks and local restrictions disrupting operations, businesses across sectors are facing unprecedented challenges. How can these businesses bounce back and adapt to the new normal? CNBC Africa's Arnold Kwizera spoke with Mills Schenck, Managing Director and Partner at BCG Nairobi, for insights on building resilience in the face of the pandemic. Schenck outlined three key strategies for businesses looking to weather the storm and thrive in the post-pandemic landscape. Firstly, appropriate planning is crucial as the pandemic phase may last longer than expected, requiring businesses to implement social distancing measures and restrictions for the next six to twelve months. Secondly, actively managing liquidity is essential, with a focus on maintaining cash flow, accessing credit, and establishing a cash management office. Lastly, adapting to the new reality is imperative, as businesses must be prepared to cater to changing customer preferences and behaviors. Schenck emphasized the need for businesses to recognize that the return to normalcy will vary by sector, with some experiencing a quick bounce back (V-shaped recovery) while others may face a more gradual recovery (U-shaped). Key sectors like healthcare and technology may see a faster recovery, while industries such as tourism and construction could face longer-lasting impacts. To build resilience against future shocks, Schenck highlighted the importance of liquidity, business model flexibility, and supply chain diversification. Businesses must ensure they have enough liquid assets to withstand short-term disruptions and adapt their operations to changing market conditions. Governments play a crucial role in supporting struggling sectors through stimulus packages, focusing not only on providing liquidity but also on improving competitiveness and repositioning the industry. In the wake of the pandemic, opportunities abound for businesses to capitalize on emerging trends and drive growth. Schenck pointed out four key areas of opportunity for businesses: capitalizing on shifts in supply chains, realigning to changing customer preferences, embracing digital transformation, and exploring mergers and acquisitions. By adapting to the new reality and seizing these opportunities, businesses in East Africa can build resilience and thrive in a post-pandemic world.