for senior executives and business owners leading …...ngn123.50 per litre on april 1, 2020....
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PwC Nigeria in collaboration with Capital Club WebinarFor Senior executives and business owners
Thanks for joining:
Presentation starts: 10:00am
Leading through crisis and uncertaintyThe Covid-19 realityWednesday 29 April 2020
The Moderator
Welcome
Kenneth ErikumePartner, Tax Reporting & Strategy
PwC Nigeria
Speaker
Andrew S. NevinPartner and Chief Economist &
West Africa Financial Services
Leader
Coming up next
COVID-19 and the Nigerian EconomyAssessing the Impact
April 2020
Presentation TitleNNPC Retail Limited Lubricants Business Plan
Coronavirus pandemic economic fallout ‘way worse than the global financial crisis,’ IMF chief says
the Coronavirus pandemic has created an economic
crisis “like no other,” the top IMF official said.
“It is way worse than the global financial crisis “ of
2008 – 09, Gergieva said during a World Health
Organization news conference.
“ The eurozone –and Europe more widely – is going to suffer grievous economic damage as a result of COVID-19
An early sign of what is to come was provided by the
biggest slump in German business confidence on
record. When the official data comes out for those
countries in lockdown – Spain, Italy and France among
them – they are going to make for horrific reading
“
“The COVID-19 pandemic will have a substantial economic impact on sub-saharan africa”-IMF“ World Bank sees 'major global recession'
due to coronavirus pandemic“
Coronavirus: Millions will be left in poverty, World Bank warns
The financial impact of coronavirus will stop almost 24
million people from escaping poverty in East Asia and
the Pacific, according to the World Bank.
“
Headlines with economic devastation worldwide
Africa not immune - headlines showing economic devastation
6
April 2020
Nigeria will go into recession if
COVID-19 continues beyond six
months – Finance Minister
“If it is an average of three months, we should be able to close the year with positive growth.
But if it goes longer than that – six months, one year – we will go into recession.”
COVID-19: Kenyans brace
for tough times as economic
shock looms
South Africa declares ‘state of disaster’
as coronavirus threatens to derail
economic recovery
The outlook for the nation’s economy was bleak coming into 2020, but the arrival COVID-19 is
expected to further destabilize any fragile attempt at recovery.
Coronavirus Will Slam African
Economies, Experts Say
Ghana slashes GDP forecast over
coronavirus shock
COVID-19 and the Nigerian Economy
The Great Lockdown: Economic Outlook 2020
7
April 2020COVID-19 and the Nigerian Economy
• As at January 2020, the IMF
projected that global growth will
improve from 2.9 % in 2019 to
3.3% in 2020.
• Following the COVID-19 pandemic
and its impact on the global
economy, the IMF in April 2020 has
revised its global growth
projections downward to –3%.
• This implies that the world will
enter into a recession this year,
with the outlook much lower than it
was during the financial recession
in 2008.
• The IMF estimates that the global
economy will bounce back in 2021
with significant 5.8% growth, as
business activities return to normal
levels aided by supportive policy
measures from countries.
Economic outlook by region (GDP growth rate, %)
Source: IMF, PwC analysis
Economic outlook by selected countries (GDP growth rate, %)
2.9
1.7
3.73.1
-3.0
-6.1
-1.0
-1.6
5.8
4.5
6.6
4.1
World Advanced Economies Emerging Market & DevelopingEconomies
Sub-Saharan Africa
Economic outlook by region, percent
2019 2020 2021
Fiscal policy responses from selected countries globally
8
April 2020
United Kingdom
▪ The UK government plans to inject £200bn into the
economy
▪ The UK also implemented a plan to pay 80% of wages
up to £2,500 a month for workers who are out of work
as a result of the pandemic
▪ US$8.3 billion Coronavirus Preparedness and Response
Supplemental Appropriations Act and
▪ US$104 billion Families First Coronavirus Response
Act which together provide 0.5% GDP for health care, sick
leave, small business loans, and international assistance.
▪ Agreement has also been reached on a US$2 trillion
stimulus bill (around 10% of GDP) that is expected to pass
Congress in the coming days
▪ About $52 billion (2.3 percent of GDP) in direct aid to
households, including payments to workers without sick
leave and access to employment insurance, an increase
in existing GST tax credits and child care benefits
▪ $1.125 billion (0.05% of GDP) to the health system to
support increased testing, vaccine development, medical
supplies, mitigation efforts, etc.
▪ About $85 billion (3.7% of GDP) in direct support to
businesses, including tax deferrals and wage subsidies
United States
Canada
Source: Government of Canada, CNBC, Bank of England, IMFCOVID-19 and the Nigerian Economy
Germany
China
India
▪ The German government released a €156bn
fiscal impulse to support small business owners
who have been affected by the pandemic and
to boost spending on its health sector.
▪ The government is expanding the volume and
access to public loan guarantees for firms of
different sizes, with an allocation of at least
€825billion (25% of GDP).
▪ The government approved a sum of Y1.3
trillion to aid in the increased spending on
disease prevention and control, production of
medical equipment for the coronavirus and
part of the fund is meant for its unemployment
insurance and fiscal stimulus for individuals.
▪ The government announced a sum of 150bn
rupees to boost spending on healthcare
infrastructure needed for the COVID -19.
▪ Individual states like Kerala released fiscal
stimulus packages of 200bn rupees to
support poor households.
Multilateral responses
9
April 2020
World Bank IFC IMF AfDB
World Bank prepared
to deploy up to $160
billion over the next
15 months to support
COVID-19 measures
that help countries
respond to health
consequences and
bolster economic
recovery
IFC to provide $8
billion to provide relief
aid for private
companies and
employees affected
by the pandemic
The IMF has released
$50bn through its
emergency financing
facilities to help
emerging economies
that might require
additional support.
The AfDB launched its
Fight COVID 19
Social Bond, which is
a $3 bn bond with a
3year maturity to
reduce the impact of
the pandemic on
African countries
Source: World Bank, IMF, ECB, AfDBCOVID-19 and the Nigerian Economy
Fiscal policy responses from SSA
10
April 2020Source: ECB, Financial Times, IMF
South Africa
▪ The government is assisting companies facing distress through the Unemployment Insurance Fund and
special programmes from the Industrial Development Corporation.
▪ Within the realm of the budget, workers with an income below a certain threshold will receive a small monthly
payment during the next four months.
▪ The government plans to cut $10.5bn from civil-servant pay in the next three years to halt rapid rise in public
debts between 2020 and 2021.
▪ The government committed US$100 million to support preparedness and response. Additional funds have
been earmarked to address availability of test kits, pharmaceuticals, equipment, and bed capacity.
▪ The government earmarked funds for additional health expenditure, including enhanced surveillance, laboratory
services, isolation units, equipment, supplies, and communication.
▪ The government also earmarked funds for expediting payments of existing obligations to maintain cash flow for
businesses during the crisis.
▪ The President and his deputy will take an 80% pay cut, while the ministers and their assistants will take pay
cuts ranging from 20% to 30%.
Ghana
KenyaCOVID-19 and the Nigerian Economy
Fiscal Policy responses by the Nigerian government
11
Source: FGN, MoF, TVC news, PwCApril 2020
Contingency funds of NGN984 million ($2.7 million) were released to Nigeria’s Centre for Disease Control and an
additional NGN6.5 billion ($18 million) is planned.
Establishment of a N500bn COVID-19 Crisis Intervention Fund which will be channeled to the upgrade of healthcare
facilities at the national and state-level, as well as provide intervention for states.
The President approved the employment of 774, 000 Nigerians to ameliorate the suffering caused by COVID-19 in the
country. The 774,000 youths will be engaged in Special Public Works Programme aimed at cushioning the effects of
economic downtown. Each of the 774 local government area in the country will be allotted 1,000 slots.
Three-month repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans with immediate effect. Similar
moratorium above to be given to all Federal Government-funded loans issued by the Bank of Industry, Bank of
Agriculture and the Nigerian Export Import Bank
NGN15 billion grant from Federal Government to the Lagos State Government.
Conditional cash transfers for the next two months to be paid immediately to the most vulnerable at Internally displaced
persons camps.
Also, due to the reduction in global oil prices, the government reduced the petrol pump price from NGN145 per litre to
NGN123.50 per litre on April 1, 2020.
Suspension of the proposed increase of electricity tariffs by the electricity distribution companies (Discos).
Waiver of import duty on medical equipment, medicines, protection equipment for the treatment of COVID-19.
All 43 Cabinet Ministers donated 50% of their March 2020 salaries to support the Federal Government’s efforts.
COVID-19 and the Nigerian Economy
COVID-19 Economic Impact on Nigeria
12
April 2020Source: NBS, PwC estimates
Real GDP(%)
2016
20172018 2019
2020f
-5% to -10?
2.27
-1.58%
0.82 1.93
Unemployment rate(%)
2016 2017 2018 Q3 2019f2020f
14.23 20.24 23.13 28.65 >35%
Nigeria should expect an
unprecedented economic
shockAlthough comprehensive structural
reforms could reduce impact
• Massive spike in employment
• Massive number of people in informal sector not earning daily wage between lockdown and recession
• Huge food security challenge
• Fiscal crisis at both FG and State level
• Depletion of external reserves
Further impacts
COVID-19 and the Nigerian Economy
Thank you
Taiwo OyedeleFiscal Policy Partner and West
Africa Tax Leader
Speaker
Coming up next
COVID-19: Leadership EffectivenessManaging crisis and positioning
for opportunity
April 2020
16
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NNPC Retail Limited Lubricants Business Plan February 2020
Content
Managing the crisis
Leading for result
Thinking ahead
Final thoughts
Managing the crisis
Managing the crisis
18
April 2020
People first
• Staying safe
• Staying sane
• Information hub
• FAQs
• Corporate
responsibility
Business continuity
• Liquidity
• Cash flow
• Working capital
• Supply chain
• Productivity
• Scenario planning
Sustainability
• Brand / ethics
• Efficiency
• Profitability
• Strategy
• Stakeholder
management
Lessons learnt
• Feedback / surveys
• Institutional learning
• Keep it simple
• Assume new normal
• Best practice
• Innovation
COVID-19 and the Nigerian Economy
Success
builds
confidence,
crisis builds
character! Anonymous
Leading for result
The challenges facing businesses are multidimensional
20
April 2020
PwC COVID-19 Survey: Top challenges facing businesses
In a recent survey by PwC
Nigeria on the most pressing
needs for businesses (with
over 500 Business Owners and
C-suite Executives), a number
of issues were highlighted by
respondents.
Below are the top 3:
1. Liquidity (availability of
cash to pay bills)
2. Safety of personnel
3. Infrastructure to work from
home
Liquidity
Infrastructure
to work
remotely
Cost
reduction
Sales and
distribution
Working
capital
management
Safety of
personnel
Business
Leading for results – identify what matters, possible risks and mitigating factors
Accessing govt
credits at
concessionary rates
Staying connected to
your customers using
technology / social
media
Review of business
model and consider
diversification
Review contracts
and find areas of
cost reduction
Take advantage of tax
reliefs and other
available supports being
provided
Explore new market
opportunities
provided by Covid-19
Review supply chain
and consider
opportunities for
alternative sources /
local substitutes
21
April 2020
Thinking ahead
The crisis presents opportunities - strategy for post Covid-19 competitiveness
23
Optimized production output
Identify alternative suppliers
Agile Covid-19 impact mitigation
Governmental support
Realize immediate price reductions
Competitive advantage
Elimination of waste
Improved customer satisfaction
Improved cash flow
Final thoughts
Recommended Covid-19 responses
25
April 2020
Don’t just worry, take steps to address the challenges you
face and capitalize on the opportunities presented:
• Workforce - Protect yourself, your staff and plan
how you remain safe, sane and productive
• Operations – Consider options to maintain business
continuity and protect your supply chain
• Communication – Stay informed and provide clarity
to your stakeholders. DO NOT PANIC.
• Insights – Look for insights and assess
opportunities in the market, don’t just complain.
• Customer and brand - Balance customer and staff
care with commercial priorities.
April 2020Covid-19 Nigeria's Fiscal Policy Responses
26
The Chinese use two brush strokes to write
the word “crisis”. One brush stroke stands
for danger; the other for opportunity. In a
crisis, be aware of the danger – but
recognize the opportunity. ”
John F. Kennedy
Thank you
Olusola AdewolePeople & Organisation, Advisory
Associate Director
PwC Nigeria
Speaker
Coming up next
COVID-19: Leading through crisis and uncertaintyPeople, Process, Productivity
and the new normal
April 2020
30
Key People challenges for Business Leaders…
01
06
05
04
03
02
Stakeholder Management
How do we manage the fears
and anxiety of our stakeholders?
Tools
How will our people learn and
adopt remote working tools?
Productivity
Now that our people are near
100% remote, are they
engaged and productive?
Strategy
How do we quickly articulate/ execute
our remote working strategy and
policies?
Workforce
How do we enable our leaders to
successfully manage a remote
workforce?
Programmes
How do we advance critical programmes
that have relied on in-person collaboration
(client meetings, training, appraisals)?
31
The outbreak of COVID -19 has accelerated a number of trends relating to the future (now) of
work. With the pressure of the pandemic, business leaders need to navigate this uncharted
territory.
In this conversation, we will focus on the following realities and imperatives:
Navigating uncharted territory during the Pandemic
1 2 3
Managing People during
Covid 19
Managing Productivity
Aligning Key People
Processes
4
Adapting to the new normal:
Upskilling for Digital
Roli EsisiPeople & Organisation, Advisory
Manager
PwC Nigeria
Speaker
Coming up next
How to support your teams/ organizations through the COVID-19 crisis…
3304
• Share openly and often
what the real impact of
the crisis is on your
business
• Normalize what to
expect
• Communicate
expectations
• Create an
environment driven
by a sense of
community
• Provide and support
employee wellness
initiatives e.g. Digital
therapy, company-
wide digital events,
etc.
• Avoid making
employees work round
the clock
• Trust employees to do
their work even if you
can’t see them
• Coach managers to
focus on outcomes
and not micromanage
CommunicateConnect
Emotionally Manage Flexibility
How you can support
• Enable supportive
interactions among
employees using
technology e.g.
Google Meet, Slack,
etc.
• Ensure employees
are aware of your
cyber security
policies
Bolster Technology
Enablement
3404
Key People Processes impacted by COVID 19
01
Remote working is the new normal. Client contact,
training, performance management discussions,
meetings and work place collaboration have been
radically transformed
02
Employee wellness has become priority especially
with the growth of the digital economy and the always
on culture
03
Quantum increase in Job Values and Compensation
for specialist skills (digital skill gaps are now evident
and in high demand)
Managing Productivity
35
A few tips leaders can adopt to manage productivity:
01 03 05 07
02 04 06 08
Determine which critical
function that must remain
onsite or can be remote
Refine business
continuity plans for
critical onsite roles
Develop/update
remote working
policy
Refine performance
expectations
Understand the
remote working
constraints
Determine IT
infrastructure
readiness
Build leadership
capability for remote
working
Develop and roll
out remote
working training
Olusola AdewolePeople & Organisation, Advisory
Associate Director
PwC Nigeria
Speaker
Coming up next
Skills
The right digital skill sets
and capabilities exist
across an organization –
people and leaders – to be
successful in a digital age.
37
A more holistic view for accelerating your organization’s digital workforce transformation, based on leading research from PwC’s Katzenbach Center
Mindsets
The values, beliefs,
attitudes, assumptions,
biases, and ways of
thinking about digital to fuel
innovation.
Behaviours
The application of new
learnings to adapt habits
and actions that drive
digital innovation.
Relationships
The right connections,
collaboration, relationships,
and influence within an
organization to foster
digital innovation.
Confidential information for the sole benefit and use of PwC’s client.
Assess Learn Grow
38
Introducing PwC’s Digital Fitness for the World
or you can call it DFA
Includes a COVID-19
Resource Channel
Free till July 31, 2020
Navigating uncharted territory during the Pandemic
pwc.com/us/digitalfitness
Visit the Apple App Store or Google Play
and use the invite code “LRNALL.”
Thank you
All
Questions
Answers&
The Moderator
Kenneth ErikumePartner, Tax Reporting & Strategy
PwC Nigeria
Closing
For more insights on how to respond to the business impacts of COVID-19
Visit our COVID-19 Content Hub
at www.pwc.com/ng/covid-19
Access COVID-19 Resources on
PwC Nigeria's Tax 247 Mobile App
available on both Google Play Store
and the Apple App store
Thank youThis webinar has ended