Business organizations in Nigeria have identified liquidity and the safety of their employees as priority business needs, as they grapple with the impact of the Covid-19 pandemic. This was part of the findings of a survey conducted by a multinational professional services firm, PricewaterhouseCoopers (PwC) Nigeria.
The survey findings were disclosed during a recent webinar which was hosted by PwC, on the economic implications and policy response to Covid-19.
The survey had about 3000 respondents, ranging from managers to CEOs and business owners. When asked what their top business concerns were, 22.5% of them settled for liquidity, which is the availability of immediate cash to pay bills. This is especially important to them considering the disruption of business activities that have been experienced.
Meanwhile, 15.4% of the respondents identified the safety of their staff as a top priority. Note that this is a good indication that Nigerian businesses have a people-focused approach and are not just concerned about their profitability.
(READ MORE: Businesses most affected by COVID-19 outbreak)
The third significant business concern identified was infrastructure for remote working. According to the survey, about 14.6% of the respondents stressed the need for access to electricity and internet connectivity.
While providing the results of the findings, Taiwo Oyedele, the Fiscal Policy Partner and West Africa Tax Lead at PwC Nigeria noted that 78.4% of businesses do not plan to lay off staff as a result of the crisis. Again, this is something optimistic. However, decisions to retain staff are often top management decisions and could mean that a good percentage of the respondents may not be privy to such plans by their organizations.
On the other hand, 21.6% of the respondents admitted that they will lay off staff due to the pandemic. Of this group, 55.3% do not think government intervention will influence their decisions on laying off staff. The rest, however, expressed their willingness to retain their employees if government intervention takes care of varying percentages of their staff wage bills.
As part of its societal impact, PwC has said it will provide free business continuity support services to small businesses employing between 5 to 50 employees who undertake to retain all their staff during this period.
On investments, 56.7% of the respondents said they will delay their investment decisions while 19.4% said they will invest less. This shows that the much-needed investment to stimulate growth will be greatly impacted.
Meanwhile, 23.8% and 43.9% of the respondents think that the government’s interventions have either been grossly inadequate or just inadequate respectively. About 17.5% of the respondents expressed indifference to what the government has done. Only 14.4% agree that the government’s intervention has met their expectations. This clearly shows that both the federal and state governments need to do more in terms of palliatives.
The top two areas that respondents believe the government’s intervention should be focused are:
- Tax relief (30%)
- Provision of loans at zero or low-interest rate (29.3%), and
- Cash transfer to the poor (16.9%).
Overall, the businesses surveyed agree that the private sector has a role to play in supporting the government’s fight against Covid-19. About 85.5% of the respondents suggested that they are best suited to provide support in the areas of relief items, equipment, and facilities. Only 10.7% indicated their willingness to donate cash to government.
Niger Insurance Plc gets shareholders nod to restructure business
Niger Insurance Plc has announced plans to restructure its insurance business into distinct but mutually dependent business entities.
Niger Insurance Plc has obtained shareholders’ approval to restructure its insurance business into general, life and business insurance, with each segment to be structured as a separate legal entity.
This is part of the resolutions passed at the 50th Annual General Meeting of Niger Insurance Plc., held on 20th of January, 2021 at Peninsula Hotel in Lekki, Lagos.
The decision to restructure the company is in a bid to make it more efficient and profitable to stakeholders, especially as efforts are geared towards overturning a loss of about 1,1723.2% Year-on-Year, earlier made by the company in its last reported financial statement, Q2, 2020, as reported by Nairametrics.
Other key decisions reached at the 50th AGM include;
- The re-appointment of Mr Ebi Enaholo and Mrs. Olufemi Owopetu as Directors of the company.
- Acceptance of the presented financial statement for the year ended December 31, 2019 and the report of the audit committee, directors and auditors.
- Directors were authorized to fix the remuneration of the auditors.
- Directors were authorized to appoint external auditors to replace retiring auditors of the company.
- The appointment of four individuals as members of the audit committee.
- A decision to restructure the company’s business capital was also reached.
In case you missed it: The shareholders of Niger Insurance Plc in the 49th Annual General Meeting approved the decision by the company’s board to raise additional capital to the tune of N15 billion, in a bid to meet the revised recapitalization targets for general and life insurance companies.
What you should know: The House of Representatives had in December 2020 directed NAICOM to suspend the mandatory deadline for the first phase of 50%-60% of the minimum paid-up share capital for insurance and reinsurance firms.
Nigeria’s Qua Iboe crude exports resume as ExxonMobil lifts force majeure
ExxonMobil has lifted a force majeure on Nigeria’s Qua Iboe crude oil exports as production resumes.
ExxonMobil has lifted a force majeure on Nigeria’s Qua Iboe crude oil export terminal, as crude exports resume for the first time in almost six weeks after a fire at the terminal halted operations.
This is according to a company spokesman yesterday, who confirmed the company had lifted force majeure on Qua Iboe crude loadings.
Qua Iboe production started to ramp up to normal levels of 200,000 b/d in the past week, according to sources, with the release of both the February and March loading programs.
The VLCC Dalia was also in the process of loading a 1-million-barrel stem at the Qua terminal since January 21, 2021, according to data intelligence firm Kpler. This will be the first export of Qua Iboe since December 15, 2020, after a fire hit the facility and injured two workers.
The company has been under pressure since the closure and prices have taken a hit as a result of the disruption. S&P Global Platts last assessed the grade at a discount to Dated Brent of 50 cents/b, down from a premium against the benchmark in December.
Bonny Light, a mainstay Nigerian crude which typically trades at roughly the same level as Qua Iboe, was last assessed 30 cents/b higher.
What they are saying
One trader said: “If you get a cargo of Qua now it could be 50 cents to a dollar below Bonny even – a January cargo is completely out of cycle and the reliability issues mean people won’t touch it.”
Another trader stated that: “[The return of Qua Iboe] is not what West African crude assessments (WAF) differentials needed.”
What you should know
- Qua Iboe is one of Nigeria’s largest export grades, and is very popular among global refiners, with India, the US, Canada, Italy, Spain, Indonesia, and the Netherlands being key buyers.
- Qua Iboe is light sweet crude, which has a gravity of 36 API and sulfur content of 0.13%. The crude, produced from fields 20-40 miles off the coast of southeast Nigeria, is brought to shore at the Qua Iboe terminal via a seabed pipeline system.
- Indian demand has steadied following a buying spree late last year, and European demand has been hit by renewed coronavirus lockdowns in the region.
- Prices for Nigerian crude have suffered in recent weeks, even with lower supply due to the outage.
- February and March loading programs have been issued for Qua Iboe averaging 169,643 b/d and 153,226 b/d respectively.
- Production of this key grade ranged between 180,000-220,000 b/d in 2020, according to S&P Global Platts estimates.
CBN says revised new cheque book to become fully operational from April 1, 2021
The CN has announced plans to discontinue the use of old cheque books with effect from March 31, 2021.
The Central Bank of Nigeria (CBN) has in a circular to all Deposit Money Banks (DMBs), accredited Cheque Printers/Personalisers, and the Nigeria Interbank Settlement System (NIBSS), stated that the revised cheque book will become fully operational from April 1, 2021.
The apex bank has directed all DMBs to enlighten their customers on the revised cheque book, introduced across all banks as full enforcement of its usage will commence on the stated date.
The disclosure is contained in a circular that was issued by the CBN and signed by its Director Banking Services, Mr Sam Okojere.
The CBN in the circular noted that the clarification became necessary as some stakeholders had been interpreting the circular differently from the intended purpose.
The CBN in the circular stated, ‘’Please refer to our circular dated 9th December, 2020, referenced BKS/DIR/CIR/GEN/02/042 on the above subject.
It has come to our notice that some stakeholders interpret the circular differently from the intended purpose. Consequently, it has become imperative for the CBN to issue the following clarifications;
- The parallel run, in which old and new cheques are allowed to co-exist, will end on 31st March 2021, and thus only new cheques would be allowed in the clearing system from 1st April 2021.
- Full enforcement of the second edition of the Nigeria Cheque Standard (NCS) and Nigeria Cheque Printers Accreditation Scheme (NICPAS) Version 2.0 will commence April 1, 2021 and the NCS/NICPAS 2.0. Sanction grid will be fully operational on April 1, 2021.
- All deposit money banks are (therefore) directed to actively enlighten their customers and ensure necessary provisions are put in place for a smooth migration to the New standard.
- The extension of full implementation date from Jan. 1 to April 1, 2021 is due to outbreak of the Covid-19 pandemic and the impact it had on the Nigeria Cheque Standard (NCS) and Nigeria Cheque Printers Accreditation Scheme (NICPAS) Version. 2.
What you should know
- It can be recalled that in an earlier circular issued on the revised cheque book, the CBN had put the cut-off date for the parallel run of the old and new cheques at August 31, 2020.
- This was further extended to December 31, 2020, with only new cheques intended to be allowed in the clearing system from January 1, 2021, due to the outbreak of the coronavirus pandemic and the impact it had on the project.
- This further adjustment of the deadline gives room for more sensitization by the deposit money banks to their customers, taking into consideration the disruptions that have happened in the economy.