As the Coronavirus pandemic continues to affect Nigeria and the rest of the world, albeit negatively, it has become essential for companies and employees to re-strategize in order to survive. This is the advice that was given by Nairametrics’ Founder (Ugodre Obi-Chukwu) who spoke, yesterday, during a live webinar by FCMB Nigeria on the topic “COVID-19 & Economy Downturn Response”.
Unprecedented changes require adjustments
According to Ugodre, the pandemic has completely altered the normal ways of doing things. Therefore, it has become imperative for everyone to adapt by adjusting to the current realities before it becomes too late for them to do so.
To this end, therefore, he recommended some steps that employers and employees may consider right away. Chief among these recommendations is the need to cut down on operating costs; especially the non-essential ones. This is a no-brainer, by the way, bearing in mind that the global economy has taken a serious beat by the pandemic, even as Nigeria is now said to be heading towards what could easily become its worst recession in years.
Below are the actions to take now
- Ugodre advised companies to consider cutting down on non-essential fixed and recurring costs.
- He also advised on the need for companies to secure their existing assets (property and equipment), in view of the unfavourable economic situation which the oandemic has wrought.
- Companies should also become cash-flow-positive and desist from purchasing fixed assets and illiquid investments in the meantime.
- In the same vein, it has become imperative for companies to quickly review their 2020 budget and any multi-budget strategic plans.
- They should front-load essential costs in order to avoid the impact of devaluation.
- They should review all variable cost lines and consider reducing unit costs.
- Now is also the right time for companies to explore e-commerce to increase their sales.
- Companies should also review existing contract commitments and consider activating force majeure clauses.
- They should also ensure to actively engage their shareholders, investors, and other critical stakeholders during this difficult period.
- This is also a good time for companies to renegotiate their loan terms and seek moratorium on principal repayments.
- Nigerian companies should consider applying for concessionary loans and grants.
- They should also ensure to buy loyalty by contacting existing customers and offering loyalty programs.
- A good way to retain customers during this time is by sending frequent messages about new deals.
- In the same vein, companies should improve on their public perception by channeling CSR activities towards COVID-19. A lot of companies are already doing this, by the way.
- Companies should encourage virtual workspace and utilize work from home tools. They should also reduce non-essential third-party employee-related contracts.
- Meanwhile, this is a good time for companies to consider pivoting to newer business ventures in order to diversify.
- In all, companies must rejig their entire business operational models to conform with the new norm.
(KEEP READING: Nigeria’s cocoa exports to fall by $100m)
What employees should do to survive
Meanwhile, Ugodre also recommended a number of actionable plans that Nigerian employees should consider doing in order to survive the looming economic disaster that is facing Nigeria. These recommendations range from the need to improve on one’s professional skills, to the importance of imbibing basic financial literacy skills. See below:
- Learn new professional and soft skills.
- Attend online courses, webinars to broaden knowledge.
- Accept unpaid leave if offered and use the opportunity to learn new things.
- Cut out non-essential living expenses.
- Suspend non-committal travel plans and social obligations.
- Support dependent family and friends if possible.
- Hold more of cash and invest in liquid assets.
- Access existing investing and sell of low yield investments.
- Hold cash electronically and avoid sharing personal banking details.
- Draw up personal budget and review periodically.
- Create joint expense account with spouse/partner.
- Be accountable and have a mentor to guide you.
- Utilize Financial Mobile Apps to save towards a project.
- Refinance existing personal loans. Hold cash.
- Explore short term borrowings but payback if debt-free.
- Subscribe to mutual funds.
- Read up on personal finance and listen to podcasts.
- Join investment clubs, online communities, money fellowships.
- Have a diverse portfolio – forex, real estate, stocks, bonds, mutual funds.
CBN grants Mortgage Refinancing Companies approval to refinance Non-member banks
The CBN has expanded access to mortgage financing by removing restrictions on refinancing mortgages earlier imposed.
The Central Bank of Nigeria (CBN), has granted approval to Mortgage Refinancing Companies (MRC), to re-finance non-member banks.
This is contained in a circular referenced FPR/DIR/GEN/CIR/07/056 and signed by Ibrahim Tukur, the Director of Financial Policy and Regulation Department, CBN.
The circular improved on the earlier provisions contained in section 22.214.171.124 which states that “A mortgage refinance company (MRC) shall not, without the prior approval of the CBN, extend total outstanding credit to any single borrower, which is equal to or more than twenty times the value of the borrower’s shares with the MRC or 25 percent of its shareholders’ funds unimpaired by losses.”
What this means
Based on the provisions contained in the latest circular, MRCs are now free and legally permitted to refinance the qualifying mortgages of banks and all other non-members ( that do not hold equity), subject to meeting all other relevant requirements specified in the framework.
In a nutshell, the restriction on non-member mortgage lenders from refinancing their mortgages with MRCs has been removed.
Why this matters
Prior to the provisions contained in the latest circular, CBN had expressed fears that provisions of section 126.96.36.199 negatively impacts the mortgages sub-sector, as it constrains the MRCS from refinancing the mortgages of non-shareholder banks. Therefore, the new order will help to remove the restrictions already highlighted.
In lieu of this, the latest circular stated that the provision of section 7.3.1 5 is hereby revised to “the MRC shall not, without prior approval of the CBN, extend total outstanding credit to any single borrower, which is equal to or more than 25 percent of its shareholders’ funds unimpaired by losses,” the circular reads.
Nascon Allied Industries Plc: Increase in sale of goods boosts revenues
Nascon Allied Industries Plc recorded a boost from an increase in the sale of goods revenue-generating unit
Nascon Allied Industries Plc recorded a boost from an increase in the sale of goods revenue-generating units, as total revenues increased slightly. The company reported revenues of N21.87 billion in 2020 (9months) – 4.01% increase compared to N21.03 billion in the corresponding period of 2019.
What you should know
Key highlights from 2020 (9months) results
- Revenues increased by 4.01% from N21.03 billion to N21.87 billion YoY.
- Revenues from sale of edible, refined, bulk grade salt; seasoning and vegetable oil, increased to N21.87 billion, +22.53% YoY.
- Other income increased to N12.81 million, +27.43% YoY.
- No revenue was recorded for freight income on the deliveries of salt and seasoning income-generating unit.
- Gross profit increased to N8.96 billion, +74.56% YoY.
- Operating profit increased to N3.64 billion +18.60% YoY.
- Pre-tax profits increased to N3.47 billion, +16.63% YoY.
- Post-tax profits increased to N2.29 billion, +13.27% YoY.
- Earnings Per Share increased to 115 kobo, +12.75% YoY
- Total assets increased to N44.36 billion, +45.79% YoY.
- Total liabilities increased to N32.04 billion, +67.21% YoY.
- Total equity increased to N12.32 billion, +9.35% YoY.
Nascon Allied Industries Plc recorded a boost from increase in sale of goods revenue-generating unit, but no revenue was recorded for its freight income on the deliveries of salt and seasoning revenue generating-unit.
Though companies have generally recorded decreased revenues in the last three quarters, mostly due to COVID-19; Nascon Allied Industries Plc was able to increase its total revenues and pre-tax profits in the period under consideration.
Instagram disables its “Recent” feature
Instagram recently announced it had removed the “recent” tab from hashtag pages on a temporary basis
Instagram disclosed that it would remove the “Recent” tab from its hashtag pages for people in the United States of America.
The social networking and video sharing service stated this on its official Twitter handle. It said it is “doing this to reduce the real-time spread of potentially harmful content that could pop up around the election.”
Starting today, for people in the U.S. we will temporarily remove the “Recent” tab from hashtag pages. We’re doing this to reduce the real-time spread of potentially harmful content that could pop up around the election.
— Instagram Comms (@InstagramComms) October 29, 2020
What you should know
Nairametrics had reported on Instagram’s apology for its algorithm malfunction that led to the flagging of #EndSARS posts as fake.
Instagram has also taken the following measures to ensure a successful November election.
- The registration of 4.4 million votes this year through its flagship platform – Instagram and Messenger.
- Serving as a means of information and tool to people in the US on the electoral process
- The ban of any content that can thwart the success of the election.
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Mark Zuckerberg, the CEO of Facebook, said he was perturbed about the high risks for civil unrest in the US due to the upcoming presidential election.
“I’m worried that with our nation so divided and election results potentially taking days or weeks to be finalized, there is a risk of civil unrest across the country.”
Furthermore, he disclosed on a call while discussing Facebook’s Q3 earnings, that “given this, companies like ours need to go well beyond what we’ve done before.”
Why this matters
The aim of the short-term decision is to decrease the spread of misinformation in the forthcoming US election.