Economic Resilience: A key factor for business success in emerging markets

In today’s volatile global economy, businesses in emerging markets face a unique set of challenges. From fluctuating exchange rates and political instability to limited access to capital and shifting regulatory environments, these companies must navigate a landscape fraught with uncertainty. Olumide Fowowe, a seasoned expert in financial management and strategic leadership, understands that the success and sustainability of businesses in emerging markets depend on one crucial factor: economic resilience.

According to him, economic resilience is the ability of a business to absorb shocks, adapt to disruptions, and thrive in a changing economic environment.

“In emerging markets like Nigeria or India, businesses can face extreme volatility due to factors beyond their control, such as economic downturns or sudden policy changes. For example, a small agricultural firm in Nigeria may experience supply chain disruptions due to fluctuating oil prices. The ability of that firm to quickly adapt and continue operations is what we mean by economic resilience,” Fowowe explains.

Fowowe highlights two primary areas where businesses can strengthen their economic resilience: diversifying revenue streams and building financial reserves.

“One of the most important strategies for building resilience is to diversify revenue streams. Relying on a single product, service, or market can expose a business to unnecessary risk. For instance, a technology startup in Kenya that relies solely on domestic clients may be vulnerable to economic slowdowns in the country. By expanding into other African markets or offering additional services, that company can better withstand local economic disruptions.”

Fowowe also stresses the importance of financial reserves and liquidity.

“Having cash reserves is vital for businesses in emerging markets. A manufacturing company in Ghana, for example, could face delays in importing raw materials due to currency fluctuations. A strong financial reserve allows the company to weather these temporary disruptions without halting production or cutting staff. Strategic financial leadership ensures that the business builds these reserves during prosperous times so they’re available during downturns.”

He further emphasizes that effective cost management is essential for economic resilience.

“In markets where inflation and currency volatility are high, controlling costs is critical. A retail business in Lagos, for instance, may face rising costs for imported goods due to currency depreciation. Strategic financial leaders will implement cost control measures, such as renegotiating supplier contracts or switching to local alternatives, to protect profit margins and maintain operational efficiency.”

Fowowe also points out that access to capital plays a pivotal role in ensuring resilience.

“Businesses in emerging markets often struggle with access to finance, especially during times of economic uncertainty. A key part of building resilience is ensuring access to various forms of capital—whether it’s bank loans, private equity, or even government grants. For example, a small agricultural business in Uganda may benefit from government-backed financing programs aimed at boosting rural enterprises. By securing these funding sources early, the business can sustain operations even when market conditions worsen.”

He notes that leveraging technology is another essential component of building economic resilience.

“Digital transformation can make businesses more agile and better equipped to handle economic disruptions. A manufacturing company in India, for instance, could use cloud-based software to streamline its supply chain, reducing costs and improving efficiency. By investing in technology, businesses can remain competitive and adaptable in the face of economic uncertainty.”

Fowowe also stresses the importance of adapting to regulatory changes in emerging markets.

“Emerging markets are often characterized by rapidly changing regulatory environments. A financial services firm in Kenya might face new compliance requirements that could affect their business model. Strategic financial leadership ensures that the company stays ahead of regulatory changes and adapts its operations to comply with new laws without losing momentum.”

In addition, building local partnerships is a strategy that helps businesses become more resilient.

“Local partnerships can provide valuable insights and resources that make businesses more adaptable. For instance, a healthcare startup in South Africa could partner with local suppliers to ensure they have access to essential equipment during supply chain disruptions. By building strong relationships within the local business ecosystem, companies can tap into local expertise and resources when faced with challenges.”

Fowowe also mentions the importance of community engagement in enhancing economic resilience.

“Businesses that are actively involved in their communities are more likely to survive economic downturns. A food processing company in Brazil, for example, might invest in local education or healthcare initiatives, earning goodwill and customer loyalty. In tough times, the community will likely support businesses that have made meaningful contributions, helping them stay afloat during difficult periods.”

He also talks about the need for long-term strategic planning to ensure resilience.
“Economic resilience is not something that happens overnight; it requires long-term planning and a proactive approach. A construction company in Egypt may build contingency plans for various economic scenarios—whether it’s a sudden increase in material costs or a political upheaval that affects their supply chain. Strategic leaders must always be thinking ahead, preparing for potential disruptions, and making decisions that ensure the business can adapt to whatever comes next.”
Finally, Fowowe underscores the importance of leadership and corporate culture in fostering economic resilience.

“The mindset of the leadership team and the culture of the organization are critical. A resilient business is one where leaders are proactive, not reactive, and where employees are empowered to make decisions that drive long-term success. For example, a retail chain in Tanzania that encourages innovation and risk-taking among its staff is more likely to adapt quickly to market changes than a rigid, hierarchical organization.”

In conclusion, Olumide Fowowe believes that economic resilience is the foundation for long-term success in emerging markets. By diversifying revenue streams, managing costs, leveraging technology, and building strong local partnerships, businesses can weather economic disruptions and thrive in unpredictable environments.

“As emerging markets continue to evolve, businesses must prioritize building economic resilience. The future is uncertain, but companies that plan for volatility, invest in their communities, and maintain financial flexibility will not only survive but also grow stronger in the face of challenges.”