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COVID-19: What businesses must do to mitigate crisis

KPMG has revealed six factors that businesses should consider to mitigate the impact of the COVID-19 pandemic in Nigeria.

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These Nigerian businesses are being affected by COVID-19, coronavirus, COVID-19: What businesses must do to mitigate crisis

KPMG has revealed six factors that businesses should consider in order to mitigate the impacts of the Coronavirus pandemic in Nigeria. According to a report by the financial services firm, the factors include ensuring the following:

  • Business Continuity/Information Technology
  • Marketing/Communications
  • Security
  • Pandemic Planning
  • Finance and
  • Proper Human Resources.

Business Continuity/Information Technology

KPMG explained that it is an important continuity to be sustained in business, especially in the private sector, as it is not proper for the economy to be shut. A major barrier to this could be critical processes that may not be concluded if movements are restricted.
But as far as analysts at KPMG are concerned, confirmed critical processes can be performed remotely or an alternative can be identified if necessary Information Technology tools are adopted.

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For instance, it explained that it is important for all businesses to validate essential tools to work remotely. Some of the tools are Laptop computer, video conferencing tools, and the Internet, among others.

(READ MORE: KPMG reveals 7 Fault Lines that may distort Nigeria’s economy in a new decade)

Other areas that must be touched are increased network bandwidth due to increased telecommuting, remote security access capabilities, establish a Help Line to assist employees that are not familiar with telecommuting or test thoroughly in anticipation of a pandemic.

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Analysts added that it is also important to review the organisation’s Risk Assessment and Business Impact Analysis to confirm the critical business sites, processes, products, services, and a prioritised list of customers that will be the focus of continued operations during a pandemic event.

“Sign-off that the Pandemic Plan has been reviewed and approved by the Board of Directors or Committee annually. Review the potential impacts on operations, customer service, SLAs and ensure a continuous supply of power and diesel for generators powering critical IT infrastructure,” it stated.

READ MORE: MTN Nigeria hires KPMG to handle tax dispute as face-off with FIRS continues

Marketing/Communications

KPMG explained that developing and adopting the right communication vehicles and frequency targeting is another factor that must not be overlooked. It tasked owners of businesses to develop a communication plan to facilitate consistent internal and external communications. While internal communications would be designed for the staff and employees of the organization, the external plan would be filled with information meant for either their customers/consumers, clients or the general public.

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It stated, “Determine the appropriate level of communication consistent with an organisation’s protocol to keep employees informed without introducing unnecessary stress. Determine an appropriate level of communication with clients.”

Patricia

Security/Facility/Health & Safety

The safety and security of employees should not be left in the care of the staff alone, as companies are expected to lead by example and ensure basic safety, security measures/tools are provided by the employers.

Analysts guide and tasked the direct leadership of firms to follow guidelines published by leading global authorities like the World Health Organisation. Signs and posts should be at strategic locations within and outside the business premises.

It added that hand sanitizers should be provided and ensuring appropriate distribution of devices near restrooms, kitchens, common areas should be encouraged and the cleaning of the facility should be increased.

READ ALSO: Why Maritime sector slows nation’s GDP

Pandemic Planning/Preparedness Team

“Closely monitor outbreaks and announcements as reported by WHO, and local health and emergency management agencies. Debrief and discuss any lessons learnt, assign any outstanding issues and report on the status of such issues until resolution. Open limited service locations with limited services, if applicable, Businesses that operated virtually now could migrate to 100% virtual operations after the crisis, if needed,” the analysts added.

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Finance

Analysts at KPMG expect entrepreneurs to review cash flow and revise expenditures as necessary to avoid being cash trapped. They explained that it is important for firms to work with the supply chain for inventory forecasts and predicts supply and demand.

The report said, “Assess financial stability and identify variables that will impact revenue and cost. Define scenarios that address global slowdowns and model cash flows. Include trigger-based moves in each scenario to stabilise organisations.”

READ MORE: KPMG raises concerns about going status of Federal Palace’s parent firm

Human Resources

Post-crisis plan is as important as the crisis plan and it is important for every business and individual to necessary attention.

“Issue guidelines provided by the public health sector, communicate with personnel to return to the worksite, once they are healthy and/or no longer caring for an ill family member and after any quarantine periods,” it added.

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - abiola.odutola@nairametrics.com.

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Economy & Politics

Output cut: Nigeria leads in OPEC non-compliance with 50 unsold cargoes of crude

Nigeria and Iraq were reported not to have kept to their commitment to the huge production cut deal that had promised to reduce output by 9.7 million barrels of crude oil per day.

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Petroleum Industry Bill to be passed by mid-2020, says Sylva, FG discovers crude oil in north, says there’s more , OPEC, non-OPEC countries to meet as Saudi, Russia price war affects Nigeria’s budget, FG considers fuel price reduction, OPEC deal: Nigeria to generate additional $2.8 billion revenue as FG reacts

As opinions continue to differ on whether OPEC will extend its current oil output cut beyond June, available information has shown that not all members of the oil cartel complied fully with their agreed quotas for the month of May. This is despite the fact that the oil output by OPEC member countries reached its lowest in almost 20 years.

Available data from oilprice.com showed that OPEC members cut their output by 5.91 million barrels per day from the April level, producing 24.77 million barrels per day. This figure also showed a 4.48 million barrel per day of the agreed output cut, thereby representing a 74% compliance level.

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Nigeria and Iraq were reported not to have kept to their commitment to the huge production cut deal that had promised to reduce output by 9.7 million barrels of crude oil per day.

Iraq was able to achieve just 38% compliance of its agreed output cut for the month of May, while Nigeria, which achieved a much lower compliance of the agreed output cut, recorded 19% compliance of what was agreed. Saudi Arabia showed the highest compliance, recording 96% of the agreed output cut.

Some have attributed the noncompliance of some members of OPEC to the agreed output cut, to the contractual obligations and commitment to buyers, given the short timeframe between when the agreement for the output cut was made and its implementation.

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Meanwhile oil exports from Angola and Congo remained steady at high prices on Friday, while Nigerian oil fared lower amid huge inventory of unsold cargoes.

Nigeria continues to face some difficulty in the oil market, primarily due to sluggish demand from Europe; it has around 50 unsold cargoes of crude oil yet to be sold for the months of June and July.

Meanwhile, India has become one of the few buyers for the Nigerian oil. Indian oil firms bought about 5-6 million barrels of Nigerian crude oil last week and has bought about 2 million barrels as at Thursday this week.

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Business News

President Muhammadu Buhari reshuffles NNPC’s board of directors

Note that the former board included the late Chief of Staff to the President, Abba Kyari as a member. Stakeholders have since expected the President to reconstitute a new board to take over.

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President Muhammadu Buhari to address Nigerians on Monday, receives update and recommendations from PTF

President Muhammadu Buhari has approved the reconstitution of the board of the Nigerian National Petroleum Corporation (NNPC) after the expiration of the tenure of the current board.

The newly constituted board members are expected to serve for a tenure of three years, effective immediately. They will take over from the last board, whose 3-year tenure officially ended in 2019. Information about this development is contained in a State House press release that was published on the official twitter handle of the Nigerian Presidency on Saturday morning.

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READ MORE: Construction of ICT Parks nudges Nigeria into digital transformation

READ ALSO: CBN and NIPOST open pilot microfinance branches

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The newly constituted NNPC board is made up of six members from each of the geo-political zones in the country. The members include the following individuals:

  • Mallam Mohammed Lawal, representing the North West
  • Dr Tajudeen Umar from North East
  • Adamu Mahmood  Attah from North Central
  • Senator Magnus Abe from the South-South
  • Dr Stephen Dike from the South East, and
  • Chief Pius Akinyelure from the South West geo-political

READ MORE: Boko Haram: A protracted battle yet to be won?  

Of the six members, three are returning members on the board – Chief Pius Akinyelure, Mallam Mohammed Lawal, and Dr Tajudeen Umar from North East.

Note that the constitution of the new board is considered a welcome development, as it balances the representation of the six geo-political zones on the board. The previous constitution of the board was faulted for not being “balanced”.

READ ALSO: Full text of President Muhammadu Buhari’s 58th Independence day broadcast

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Note that the former board included the late Chief of Staff to the President, Abba Kyari as a member. Stakeholders have since expected the President to reconstitute a new board to take over.

Patricia

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Around the World

Zoom’s market valuation hits $50 billion mark, thanks to COVID-19

Zoom’s share price now trades at an eye-watering 55 times estimated revenue compared with an average of 7 times for information technology stocks in the S&P 500, according to information obtained from Bloomberg.

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Zoom

Zoom Video Communications’ shares surged to record highs on Friday, as bullish runs in the last hours of trading helped the company to close with a market capitalization of more than $50 billion. The stock gained about 9.7% to jump to $179.48, thereby giving it a market value of $50.6 billion. 

Note that this is the first time Zoom’s valuation is reaching this high level since it became a quoted company. The tech giant, which owns popular video conferencing software “Zoom”,  has gained more than 160% this year. This is because investors are betting that the surge in Zoom users amid the COVID-19 pandemic, would eventually translate to long-lasting revenue growth.

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READ ALSO: How VCs are encouraging terrible business practices by founders

Zoom’s share price now trades at an eye-watering 55 times estimated revenue compared with an average of 7 times for information technology stocks in the S&P 500, according to information obtained from Bloomberg.

Following the significant jump in the company’s valuation, the net worth of its founder and Chief Executive Officer, Eric Yuan, also rose significantly by more than $800 million on Friday. He now has a net worth of $9.3 billion, according to the Bloomberg Billionaires Index. 

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Meanwhile, in reaction to Zoom’s overnight success, Gennie Gebhart, a researcher with the Electronic Frontier Foundation, said she hoped Zoom would change course and offer protected video more widely. It should be recalled that some users of the app had raised security concerns back in April, as Nairametrics reported

READ ALSO: Did Satoshi Nakamoto cause the panic sell-off in Bitcoin market

Meanwhile, Zoom has recruited Alex Stamos, a former chief security officer at Facebook, and other top security experts to help deal with the security issues which led to some top companies banning its use. While discussing efforts being made to deal with the security challenges, Stamos told Reuters:

 “At the same time that Zoom is trying to improve security, they are also significantly upgrading their trust and safety. The CEO is looking at different arguments. The current plan is paid customers plus enterprise accounts where the company knows who they are.” 

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