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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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16

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