“That pain which we’ve had for 18 months is abating somewhat … the business is growing very strongly. So I’m actually very bullish and confident that we’ll see strong recovery in Nigeria,” CEO Ralph Mupita told Reuters.

But the damage is still obvious. MTN reported a pre-tax loss of 4.4 billion rand ($243 million) for the year ending December 31, a sharp contrast to its 12.2 billion rand profit in 2023. In Nigeria, the financial blow was worse, with pre-tax losses growing over 200% to 550.3 billion naira ($355.76 million). 

The issues? A weakened naira, skyrocketing costs, and an economy choked by inflation and foreign exchange shortages.

MTN is fighting back. The company has renegotiated tower leases, saving 1.2 billion rand. A tariff hike in January is expected to ease some of the financial stress. The company is also betting on mobile money and data services to stabilise revenue. Altogether, cost-saving efforts have shaved off 3.8 billion rand in expenses.

In Sudan, ongoing conflict has affected MTN’s operations, leading to impairments of 11.7 billion rand. Network disruptions in Khartoum and surrounding areas have been severe, though Mupita noted that some sites are gradually coming back online.

Service revenue fell 15% to 177.8 billion rand, but in constant currency terms, it rose 14%. The real shock came in MTN’s headline earnings per share, which plummeted by 69%. Nonetheless, investor trust hasn’t collapsed—by 12:20 GMT, MTN shares were up 2.39%. 

Analysts see resilience beneath the issues. “If you look at the underlying performance, which is service revenue at constant currency, it does look strong. Management team is executing well,” said Peter Takaendesa, head of equities at Mergence Investment Managers.

Nigeria’s economic policies under President Bola Tinubu—removal of fuel subsidies, exchange rate reforms—are designed to attract foreign investment. But inflation is still high, and forex volatility isn’t going away overnight.

MTN’s strategy is to push mobile money, expand data services, and keep costs in check. The company has weathered crises before. Whether this recovery holds, however, depends on how well it navigates Nigeria’s economic sector and its own internal restructuring.

The economic downturn in Nigeria, leading to high energy costs, rising raw material prices, and weak consumer demand, is the reason for the sudden decision by Kimberly-Clark, resulting in the closure decision.

Reports revealed that production has been below capacity since late 2023 due to these economic difficulties. This comes after a previous closure in 2019, followed by a restart in 2021. The company initially enjoyed strong sales growth upon reopening, but the economic situation has greatly impacted its operations.

The high cost of running the factory is a major issue. Reports also note that the company spends over N500 million monthly on fixed operational costs, with an additional N100 million just for powering the gas generators. This, coupled with reduced production schedules — down to four days a week — has highly affected profitability.

The reliance on imported raw materials further heightens the problem. With the rising cost of these imports, combined with the weakening Naira, Kimberly-Clark is unable to keep up. The company initially set aside funds for operations, expecting Nigerian revenue to sustain them within five years. However, the current economic reality offers a difficult environment.

Last year, another major player in the personal care industry, Procter & Gamble (P&G), closed its Nigerian production facility after investing a huge sum (around $300 million). PZ Cussons is also evaluating strategic options for its Nigerian business, pointing at a need to maximize shareholder value.

The potential closure of Kimberly-Clark’s factory deals a huge blow to the Nigerian government’s efforts to attract foreign direct investment. It also reiterates the challenges faced by manufacturers in the real economy. 

With two of the top three diaper and personal care producers potentially exiting in the last year, issues are rising about the impact on consumers.

If Kimberly-Clark follows P&G’s lead and transitions to an import-based model, it could further inflate the cost of huggies and sanitary products for Nigerian households. This would occur at a time when the Naira’s depreciation is already placing a strain on purchasing power and when the government is pushing for increased local production.

Despite this, some markets continue to flourish even during tough times. These industries are often considered to be recession-proof, as they tend to remain stable and even see growth during periods of economic uncertainty. 

With the increasing number of layoffs and job losses, people are looking for safe investments that will always flourish, regardless of economic downturns. Hence, not limited to these, they are:

1. Healthcare

Healthcare is an essential sector that remains resilient during economic downturns. Projected to be worth $75.1 billion by 2026, from $27.4 billion in 2022 according to MarketsandMarkets, people will always require medical attention, regardless of the state of the economy.

In fact, during tough times, people may become more cautious about their health and seek medical attention more often. This increased demand for healthcare services makes it a recession-proof industry. Additionally, advances in technology and medicine continue to create new opportunities in healthcare, making it a constantly evolving and growing sector.

2. Food and Beverage

With Statista revealing that this industry is expected to show an annual growth rate – CAGR 2022-2027 – of 7.14%, resulting in a projected market volume of $1.10 billion by 2027, and The Business Research Company projecting $9,225.37 billion market size in the same year, the food and beverage industry is another sector that is considered recession-proof. 

The need to eat is an ever-increasing one, and this demand remains relatively stable during economic downturns. While people may cut back on luxury items, they will still need to purchase basic necessities like food and beverages. In fact, during tough times, people may even choose to eat out less and cook more at home, leading to increased demand for groceries and cooking supplies.

3. Education

Education is an industry that remains stable even during times of economic uncertainty. In fact, during a recession, many people may choose to go back to school to improve their job prospects or to learn new skills. This increased demand for education leads to job growth in the education sector and Statista’s research revealed a projected market volume of $10.50 billion by 2027. 

Additionally, advances in technology have created new opportunities in online education, making it more accessible and convenient for people to pursue their educational goals.

4. Utilities

ResearchAndMarkets disclosed that the global utilities market is expected to grow from $4230.3 billion in 2020 to $4534.38 billion in 2021 at a compound annual growth rate (CAGR) of 7.2%. While The International Energy Agency estimates that $7.2 trillion will be invested in the sector in the decade to 2025, The Business Research Company projected the market to reach $8,314.78 billion by 2027.

Utilities such as electricity, gas, and water are essential services that people cannot do without, regardless of the state of the economy. These services are typically provided by government-regulated companies, making them a stable and reliable source of income. Additionally, many utility companies offer essential services to businesses, making them even more recession-proof.

5. Pharmaceuticals

The pharmaceutical industry is another market that remains relatively stable during economic downturns. Statista’s research agrees that individuals will always require medication for various health conditions, and this demand remains relatively constant, with results showing that the market is projected to reach $1,163.00 billion in 2023 and revenue expected to show yearly growth rate – CAGR 2023-2027 – of 5.39%, resulting in a market volume of $1,435.00 billion by 2027.

Again, advances in medicine and technology continue to create new opportunities in pharmaceuticals, making it a constantly evolving and growing sector.

6. Renewable Energy

Globally, renewable energy has been on steady growth for several years now and the market size by 2025 has been projected to reach $2.15 trillion worldwide.

Renewable energy is a growing industry that is already proving to be recession-proof. As the world becomes increasingly focused on sustainability, the demand for renewable energy sources like wind and solar power will only continue to grow. In addition, renewable energy projects often create jobs, making them a valuable investment for local economies.

7. Technology 

Technology is constantly evolving, and people will always seek to adopt new technologies that improve their lives and businesses. 

Oberlo explains that statistics on smart homes showed approximately 29.5 million households were utilizing smart home gadgets in 2018, this is only half of the current number. However, this trend is anticipated to persist and escalate in the forthcoming years, with an estimated 64.1 million households expected to use these gadgets by 2025. Similarly, the percentage of households using smart home devices is predicted to rise in the same period, more than doubling from 23.1% in 2018 to 48.4% in 2025.

In Statista’s opinion, revenue is expected to show an annual growth rate – CAGR 2023-2027 – of 6.86%, resulting in a market volume of $1,570.00 billion by 2027. 

In fact, during times of economic downturns, people may even prioritize technology expenditures as a means of increasing efficiency and productivity. This is why the technology industry remains stable and continues to thrive, regardless of the economic climate.

In conclusion, while economic downturns can have a significant impact on certain industries, some markets remain relatively stable and even see growth during tough times. These industries provide essential services that people cannot do without. If you are looking to invest in a stable and secure industry, these top 7 markets are an excellent place to start.

Layoffs have been seen across industries, from tech to retail, with companies from all over the world making tough decisions to reduce costs and improve efficiency. But why are there so many layoffs in 2023?

At the heart of the matter, the reasons for the widespread layoffs in 2023 can be attributed to a number of different factors. These include the global economic downturn, increased automation and AI, and the ever-changing nature of technology.

The economic downturn of recent years has had an impact on layoffs. Many businesses have been forced to reduce their staff in order to cut costs and remain profitable. This has been especially true in industries that are heavily reliant on consumer spending, such as tech, retail and hospitality.

With fewer people having the ability to purchase goods and services, organizations have had to make cost-cutting decisions to remain profitable.

Technology is changing at a breakneck pace, and businesses must keep up or risk being left behind. Companies are increasingly turning to automation for tasks that were once performed by humans, resulting in a decrease in labor costs. Companies are also relying more heavily on cloud computing, further reducing their need for staff. As a result, many businesses are forced to downsize their staff in order to stay competitive.

Layoffs are not without their advantages. By eliminating certain positions, companies can reduce their overall costs and maximize their profits. This can be beneficial in the short-term, as businesses can focus their resources on other areas of the business and invest more in innovation.

However, there are also many disadvantages to layoffs. Employees may experience wage cuts and reduced job security, leading to financial insecurity and stress. Furthermore, the quality of work may suffer as a result of fewer staff members working on projects. This can have a detrimental effect on the overall productivity of a business.

The rise in layoffs in 2023 is a troubling trend. It’s important for businesses to be aware of the potential impact it could have on their operations, as well as their employees. Companies should take steps to ensure that their staff are adequately supported and provided with the necessary resources to remain competitive in the changing technological landscape.

Layoffs can be a necessary evil in some cases, but businesses should do all they can to minimize their impact on employees and their operations. By being aware of the potential risks and taking steps to mitigate them, businesses can ensure that their staff remain happy, productive, and competitive in the ever-shifting technological environment.

Y Combinator invests $500,000 in a large number of startup companies twice a year, although this wasn’t always the case. The accelerator initially invested $150,000 but reduced it to $125,000 in 2020. These amounts have changed since Y Combinator launched, but its equity rate has been the same at 7%. 

Since 2005, the community of over 7,000 founders has funded more than 3,000 startups globally, with the companies having a combined valuation of $600 billion.

The Accelerator’s advice is due to the economic downturn in the global markets. Explaining that startups need to cut their expenses and change their tactics, the email read:

“If your plan is to raise money in the next 6-12 months, you might be raising at the peak of the downturn. Remember that your chances of success are extremely low even if your company is doing well. We recommend you change your plan.”

It should be noted that one of YC’s portfolio companies, Shopify, lost 12% of its value this year, and Netflix saw a loss of over $54 billion in market value as its stock price fell by over 35%; there are several others.

Per TechCrunch, the letter stated:

Greetings YC Founders,

During this week we’ve done office hours with a large number of YC companies.  They reached out to ask whether they should change their plans around spending, runway, hiring, and funding rounds based on the current state of public markets. What we’ve told them is that economic downturns often become huge opportunities for the founders who quickly change their mindset, plan ahead, and make sure their company survives.

Here are some thoughts to consider when making your plans:

1. No one can predict how bad the economy will get, but things don’t look good.
2. The safe move is to plan for the worst.  If the current situation is as bad as the last two economic downturns, the best way to prepare is to cut costs and extend your runway within the next 30 days. Your goal should be to get to Default Alive.
3. If you don’t have the runway to reach default alive and your existing investors or new investors are willing to give you more money right now (even on the same terms as your last round) you should strongly consider taking it.
4. Regardless of your ability to fundraise, it’s your responsibility to ensure your company will survive if you cannot raise money for the next 24 months.
5. Understand that the poor public market performance of tech companies significantly impacts VC investing. VCs will have a much harder time raising money and their LPs will expect more investment discipline. As a result, during economic downturns even the top tier VC funds with a lot of money slow down their deployment of capital (lesser funds often stop investing or die). This causes less competition between funds for deals which results in lower valuations, lower round sizes, and many fewer deals completed. In these situations, investors also reserve more capital to backstop their best-performing companies, which further reduces the number of new financings. This slowdown will have a disproportionate impact on international companies, asset-heavy companies, low margin companies, hardtech, and other companies with high burn and long time to revenue. Note that the numbers of meetings investors take don’t decrease in proportion to the reduction in total investment.  It’s easy to be fooled into thinking a fund is actively investing when it is not.
6. For those of you who have started your company within the last 5 years, question what you believe to be the normal fundraising environment. Your fundraising experience was most likely not normal and future fundraises will be much more difficult.
7. If you are post-Series A and pre-product market fit, don’t expect another round to happen at all until you have obviously hit product-market fit. If you are pre-series A, the Series A Milestones we publish here might even turn out to be a bit too low.
8. If your plan is to raise money in the next 6-12 months, you might be raising at the peak of the downturn. Remember that your chances of success are extremely low even if your company is doing well. We recommend you change your plan.
9. Remember that many of your competitors will not plan well, maintain high burn, and only figure out they are screwed when they try to raise their next round. You can often pick up significant market share in an economic downturn by just staying alive.
10. For more thoughts watch this video we’ve created: Save Your Startup during an Economic Downturn

Best,

YC

Adding to this, Y Combinator stated: “PS: If for whatever reason you don’t think this message applies to your company or you are going to need someone to tell you this in person to believe it… please reassess your beliefs on a monthly basis to make sure you don’t drive your company off a cliff. Also, remember you can always reach out to your group partners.”