Global consulting firm, Mercer, have hosted a webinar on the impact of the deadly coronavirus (COVID-19) outbreak in Nigeria. Some of the challenges countries across the world are facing include debt increase, oil demand decline, and rising unemployment.
Lesiba Mothata, Head: Strategic Clients, Alexander Forbes kicked off by introducing some of the effects of the virus and how to better understand the times. He explained the trend of past crises such as the Great Depression and World War II by presenting two possible outcomes in relation to a global financial crisis.
- Scenario 1 showed that with the virus contained, there would be slow recovery which would then result in a -8% total drawdown.
- Scenario 2, on the other hand, points out that with a virus resurgence, there would be slow long-term recovery with a -13% total drawdown from the previous peak.
He also shed some light on the oil market’s impact. “Once the US is hit; the largest economy in the world, it impacts everything else. In Nigeria’s case it will affect the demand for oil which is its major source of revenue generation,” Lesiba explained.
Thus, in order for oil dependent economies like Nigeria to navigate the tides, the economy must be diversified while adopting a progressive approach that would boost the country’s Gross Domestic Product (GDP). The government will also need to nurture sectors that have increased in significance (agriculture, trade and services).
Secondly, private capital sectors that declined will need to be re-opened. For instance, manufacturing, construction, and public transport sectors. Also, SMEs make up about 70 percent of Nigeria’s GDP and as such need to be protected. The sector is a driver of growth which will prove to be unique post COVID-19.
Lesiba concluded by stating some of the available opportunities for Africa’s largest economy. Nigeria’s diaspora remains a significant market player, which means there will be no need to halt remittances as those in diaspora tend to be highly skilled professionals and in critical sectors.
Considering Africa is well on its way to adopting technological advancements, Nigerian regulators might be encouraged to expedite the commercial use of 5G technology to enhance faster mobile connectivity.
How are employers in Nigeria supporting their employees ?
According to Nick Zaranyika, Business Leader: West Africa, Africa has unique challenges and our fight against COVID-19 is going to be different.
Despite having a strong youthful population, who, according to research may be less vulnerable to COVID-19, Africa poses a large threat when compared globally, due to weak healthcare systems and testing capabilities. There is also the challenge of other existing medical battles such as, HIV/AIDS, Tuberculosis, Ebola and Malaria. Hence, organizations are tasked with supporting employee wellbeing and safety.
In Nigeria, big multinationals have started to review policies that will protect their businesses while exploring opportunities that may arise during this period.
There have also been cash donations. A coalition against COVID-19 has been established and they’ve donated about $56million towards the fight against the deadly virus. The Nigerian National Petroleum Corporation (NNPC), alongside others have also recently joined the movement. Guaranty Trust Bank (GTB) set up an isolation center in Lagos while Ecobank has launched a series of awareness campaigns. E-commerce and tech startups like Jumia and Lifebank are not left behind and have made their own contributions as well.
“Insurance companies in Nigeria would not usually include a pandemic in your insurance coverage. But a few who have established long term relationships with their clients are making exceptions,” Nick Zaranyika,
The new normal
What will the new working environment look like? How should companies approach things during this period? Does my insurance at the moment have the adequate cover for COVID-19?
- The first step would be for employers to rethink their strategies and working conditions. “One of the most important things would be hygiene,” Tamara Parker, CEO of Mercer South Africa. “HR has to redefine policies like remote working and provide internet access.”
- Secondly, there is a need for organizations to better understand various workforces and how best to move things along. For instance, industries like manufacturing may require different approaches when compared to the financial services sector. Also, various industries need to be creative while meeting demand. A good example is the fashion industry where top designers like Louis Vuitton are already producing stylish face masks as part of their outfits. But overall, there shouldn’t be a rush. The process of resuming regular work activities need to be phased.
- Productivity and mental health is another crucial factor to consider. During these trying times, employers are encouraged to provide mental health support. In response to a question from one of the guests on maintaining a healthy balance, Tamara emphasized the need for compassion and empathy from leaders. She also advised that considering certain administrative activities may be tedious or unnecessary during this period, other means of managing and reviewing performance should be adopted.
- Employers may also want to consider enhancing financial support to employees with additional innovative solutions which are emerging during this pandemic. For employees in Nigeria who will be returning from heavily infected areas like Kano state for instance, there needs to be regular testing and other appropriate measures to protect the entire workforce.
While COVID-19 may hit Nigeria hard, opportunities abound. By identifying the sectors with high growth rates alongside more efforts in the upskilling of labor, the country will be better positioned to cushion the impact of the pandemic.