How Can the Coronavirus Affect Your Business?

How Can the Coronavirus Affect Your Business?

February 28, 2020

So far, there are around 70,000 confirmed cases of COVID-19, the new coronavirus that emerged in Wuhan, China, in December and is spreading around the world. The virus which has now spread to over 25 countries has officially been declared as a global health emergency by the World Health Organization and has sent alarm bells ringing across global capital markets.

Businesses across China have already been affected with closures to prevent infection. These interruptions to the supply chain are yet to be felt by Europe and the US, however they are to be expected. On a macro level, economic consequences of such an outbreak are profound. China is the biggest exporter and second biggest importer of merchandise, playing a crucial role in the global supply and demand value chain. Long term disruption caused by this outbreak could cause substantial damage to the economic growth of the country.

According to a Reuters poll of economists, due to this virus, China’s economic growth is expected to slow by 4.5% in the first quarter of 2020 and this is the slowest pace since the financial crisis. While the International Energy Agency says the “Global oil demand has been hit hard by the novel coronavirus”.

Factory shutdowns are slowing the flow of products and parts from China, affecting companies around the world, including Apple and Nissan. The inevitable slow down of construction activity and consumption in China may keep the demand for base metals such as steel, aluminium and copper low, putting a downward pressure on global metal prices, which will spill over into the domestic market. Metal prices have already plummeted in the global market and the Chinese supply-demand factors decrease has kept global inventories of metal products high, which is likely to weigh down on prices of steel, aluminium and copper.

Many businesses around the world would have to deal with lost revenue and disrupted supply chains due to China’s factory shutdowns as tens of millions of people remain in lockdown in dozens of cities and other countries extending travel restrictions. Even the Coca-cola company has just recently announced that there may a shortage of coke Zero and Diet Coke worldwide because the sweeteners used for them are sourced from China.

 

The virus however, is set to benefit some global buyers, such as the UK and USA who are turning to other countries such as India for exporting of goods, seeking to replace China as a supplier. Also, while the falling crude prices will not benefit countries like Nigeria, it will definitely be of benefit to manufacturers of paints and plastics with shares in major players likely to benefit.

Despite the above business disruptions worldwide, analysts have said that the stock markets will not see any long-term damage. Other major infections such as Ebola, SARS, Ziki and swine flu also caused similar growth forecast changes however quickly bounced back after around 6 months.

Team 618 Bees

 

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • Why must I file Annual Returns?

    It is a mandatory statutory requirement under the Companies and Allied Matters Act to file Annual Returns yearly. 

  • What’s the difference between a business name and an LLC?
    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 

  • What are the terms of a contract?
    • an offer and an acceptance.
    • competent parties
    • Consideration
    • Legal subject matter
    • Mutual agreement/ Assent
    • Conesus ad idem
    • Obligation
  • Can I process/register multiple products at NAFDAC at the same time?

    Yes, you can process/register multiple products at the same time

  • What is data protection?

    Data protection is a legal process of protecting sensitive data.

  • What is the difference between licensing and assigning a patent?

    Licensing a patent means granting permission to another individual or organisation to make, use as well as sell the creation that has been protected by patent.

    A patent assignment on the other hand, is a finished exchange of patent rights starting with one individual then onto another person.

  • Can I process/register multiple products at NAFDAC at the same time?

    Yes, you can process/register multiple products at the same time

  • Can my kids be shareholders in my company?

    Yes your kids can hold shares in your company but there must be a minimum of two adult shareholders before kids can be included.

  • What is a trademark?

    A trademark can be any word, sign, symbol or graphic that you apply to your company, goods or services to distinguish them from those of your competitors; for example, a brand, product or company name, or logo. The trademark serves as a badge of origin for your business and its brands and products, and can consist of words, logos, slogans, colours and shapes, or a combination of all of these.

Call Us Now on +234 901 719 0079 Whatsapp icon Chat on WhatsApp