Poverty traps and vulnerability …
Business must plan for economic slump rooted by mounting oil price
By Hildebrand Shayo
More than two thirds of business in Tanzania believes that a decline of business’s future rooted by mouthing on oil prices and global credit crunch would have a negative impact on their business, but 33 percent of those anticipating worsening conditions do not have a business plan to help them to ride out a downturn.
The research from business analysis also found that 65 percent of small and medium sized business analysed in Mwanza, Dar es Salaam and Mbeya expect economic conditions in Tanzania to get worse over the next year.
With the transport sector facing mounting oil prices and employment creation initiative dragging its feet to cope with more job opportunities, business national widely are more likely to believe that an economic downturn would have a negative effect on their business with 24 percent believing it would have a strong negative impact that might trickle over to other sectors.
However, analysis of those in the business and financial sector are less likely to believe that a downturn would have a harmful impact on their business (62 compared with 68 percent) across all business, possibly due to the fact that many business in this sector are focused on the business-to-business markets and do not rely on the economic health of the deprived consumers.
Although not all business in Tanzania would be affected equally by the economic downturn, our analysis signals that most business in Tanzania is worried to some extent so that is the time to take action and protect their companies. Those who plan now should be better equipped to withstand a storm.
From my analysis, and taking into account 2008/2009 fiscal budget forecast there are steps that can be taken to make battling a downturn in the economy that bit easier. For instance, having a sound business plan in place is an excellent start and can allow business to plan for various scenarios. Business may need to think about improving cash flow, diversifying, exploring new markets, becoming more efficient or focusing on their business unique selling point such as the quality of their customer services. In addition, if business have their business plans, it is vitally important to review it in the context of current world economic turmoil. Tanzania and business operating in Tanzania need to understand that we are not an island; we are part of global economy!
Fascinated on detailed analysis and full Dossier on “how business in Tanzania are struggling to survive with economic downturn, contact Dr. Hildebrand Shayo, Business Consultant on firstname.lastname@example.org