Impact of global decisions on Nigerian businesses.
As a country in a globalized world, Nigeria and its businesses are not isolated from decisions made beyond our shores. Global decisions profoundly affect economics and when economics is affected, businesses would invariably feel such effects. When it comes to Nigeria, global decision making affects its businesses, through politics, policy, and economics in the following significant ways;
- Crude Oil Prices.
Crude Oil prices after the Nigerian economy and businesses in profound ways, but what determines the price of crude oil has nothing to do with what happens in Nigeria. Nigerian currency reserves which are a determinant for interest rates, business productivity, and business ease are a function of stable crude oil prices, and since crude oil accounts for 95% of our exports a change in price has a make and break effect on the Nigerian economy and business environment. What determines crude oil prices range from external forces of demand and supply, market speculation, global political stability, and global policy shifts. When there are changes to these external effects and crude oil prices drop, for example, Nigerian businesses face high-interest rates, low loan access as well as an uncertain marketplace to operate and grow in.
2.Global Economic Action.
The fact that Nigeria does not operate in a vacuum should be a key reason why business and policy leaders in Nigeria need to pay careful attention to external actions taken all around the world. The action of major world countries for example can lead to economic and trade changes which can adversely change the state and nature of the Nigerian business environment and all the decisions that would be taken. Take the US-China trade war, for example, such political action had potential consequences not just on both countries, but on all countries around the world including Nigeria as well, due to the simple fact that the US and China account for more than 40% of the global economy. A scenario where the trade war got out of hand would lead to low demand for Nigerian mineral resource export which would lead to a drop in our reserves, economic vitality, and uncertainty in our business environment. Business uncertainty and environment are fundamental indicators for decision making and when there global economic changes, it is sure to affect the decision-making of business leaders in Nigeria in profound ways.
3.Global Political Action.
When it comes to the impact of global decisions on Nigerian business, none is more severe than that of political changes and modification. The world is a global village and when one country faces changes and instability, such actions have a way of trickling down into the shore of Nigeria. Take the Brexit vote in the UK for example, that vote has led to an economic separation between the UK and the European Union, leaving the UK to be more fluid in its trade and business policy. The UK and Nigeria have a long, colonial, cultural, trade, and business history together and it is not hard to assume that with its flexible business and trade policy going forward that the UK would not be more inclined to do more trade and competition with Nigerian businesses. Such changes in the dynamic in the UK which does at least £ 6.1 billion in trade with Nigeria are sure to lead to economic opportunities between both countries in terms of revenue and competition that most businesses would have to make a decision on.
