In this video, Dr. Ndubuisi Ekekwe explains what companies can do in this time of economic paralysis, arising from coronavirus. Insights were drawn from a brief he received from the legendary Sequoia Capital. Sequoia is one of the most preeminent venture capital firms in the world with billions of dollars of assets under management. Watch […]
Coronomics: Dangote, devaluation, stimulus …
According to Bloomberg Billionaire’s Index, Dangote’s wealth fell from $15.9bn as of February 25, 2020, to $13.4bn on March 26. As at 27th January 2020, he was worth $16.5bn. He lost about 15.7% of his wealth in 30 days, an equivalent of $2.5 billion. If you calculate from January, it’s about 18% loss in 60 days, an equivalent of $3.1 billion.
Why? What has changed in Nigeria in 30 days?
- On 17th March 2020, inflation hit 12.20% from 12.13%
- On 20th March 2020, we received news of the adjustment of the official exchange rate from N306 to N360. Put simply, a 15% devaluation.
You know what? The two terms, inflation and devaluation are harbingers of wealth/capital erosion, if they both visit you in a month, no matter how rich you are you will become poorer.
How does this concern you and your business?
Your wealth, same Dangote rule applies.
Your company’s working capital, say it’s N5 million:
- At 306, it’s worth 16.3k in dollar terms.
- At 360, it’s now worth 13.8k in dollar terms.
In context, imagine you placed a bid on 1st March for a project that demands a minimum $16.3k working capital, what this devaluation means to you is that you will need to recapitalise. Devaluation downgrades your capital and compels you to get more.
In more context, on 27th March 2020, Fitch Ratings downgraded the three-highest rated banks in Nigeria, Zenith, GTB and UBA, to Long-Term Issuer Default Rating (IDR) ‘B’ and Viability Rating (VR) ‘b’.
Expect more downgrades as another round of devaluation hangs over our head like an avalanche and COVID-19 infections surge on to force a total lockdown of the economy after crashing oil prices. An economy already infected with rising inflation, depleting reserves, weak infrastructure and rising unemployment.
Government is aware of all this right? Yes, they are, and that’s why they have put the following measures in place to ameliorate your loss at this critical time. It won’t solve many things but it will do something, please pay attention, take advantage; you and your company need every tonic during this crisis.
18th March 2020 – reduction in the pump price of petrol, from N145 to N125
This reduction will save 14% of your running/operating expenses depending on how deep petrol is in your operations or daily life.
16th – 24th March 2020: CBN announced policy measures worth N3.5 trillion
On 18th March 2020, CBN announced N1 trillion intervention in all critical sectors of the economy. The CBN Governor said the stimulus package is in addition to the regime of incentives contained in a six-point palliative announced on 16th March 2020.
The stimulus and measures were further confirmed in the Bank’s MPC communique on 24th March 2020 as measures to ameliorate the impact of the coronavirus on the Nigerian economy. They include:
- Additional moratorium of 1 year on CBN intervention facilities
- Interest rate reduction on intervention facilities from 9% to 5%
- Creation of N50 billion target credit facility for affected households and small and medium enterprises
- Granting regulatory forbearance to banks to restructure terms of facilities in affected sectors
- Additional N100 billion intervention fund in healthcare loans to pharmaceutical companies and healthcare practitioners intending to expand/build capacity
- Identification of few key local pharmaceutical companies that will be granted funding facilities to support the procurement of raw materials and equipment required to boost local drug production
- N1 trillion in loans to boost local manufacturing and production across critical sectors.
23 March 2020: FIRS announced the following measures to mitigate the impact of coronavirus on taxpayers:
- Extension of timeline for filing of value-added tax and withholding tax from the 21st day to the last working day of the month, following the month of deduction
- Extension of the due date for filing of companies’ income tax (CIT) returns by one month
- Use of electronic platforms for payment of taxes and processing of tax clearance certificates
- Filing of tax returns by taxpayers without audited financial statements which must be submitted within two months of the revised due date of filing
- Creation of a portal where documents required for desk reviews and tax audits will be uploaded by taxpayers for online access by the tax authority (Proposed)
- Submission of tax returns online by taxpayers via efiling.firs.gov.ng or by designated e-mail accounts published by the FIRS.
24th March 2020: Economic Stimulus Bill by the House of Representatives
The House of Representatives led by Speaker, Femi Gbajabiamila passed an Economic Stimulus Bill to help cushion the effect of coronavirus on corporate bodies and individuals as follows:
- Protect employees from loss of jobs as a result of COVID-19 by granting a 50% income tax rebate on the total actual amount due or paid as pay-as-you-earn (PAYE) tax under the Personal Income Tax Act, 2004 (as amended), to Nigerian companies who retain all their employees from 1 March 2020 to 31 December 2020
- Suspend import duties on medical equipment, medicines and personal protective gears required for the treatment and management of COVID-19 for three months, effective 1 March 2020.
- Introduce a new moratorium on mortgage obligations of Nigerians under the National Housing Fund. The Bill was sponsored by all principal officers of the House and is awaiting the Senate’s review and passage before presentation to the President for his assent.
29th March 2020: FG grants 3 months moratorium for repayment of all govt funded loans
President Muhammadu Buhari in his nationwide presidential broadcast on Sunday, 29th March 2020 disclosed the following as part of its efforts to cushion the economic effects of the Coronavirus pandemic.
- Three months repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans with immediate effect.
- Similar moratorium be given to all Federal Government funded loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export-Import Bank.
Please stay informed, stay safe, stay at home and let your money work for you.
Sit at Home and Don’t feel Bored
IT IS A HOLIDAY, AND NOT A WORRY-DAY
Pandemic do happen, just focus on being grateful that you will survive it, and the ideas to survive will come your way. This is how the law of attraction works and the universe is a support system to it.
Corona Virus is yet another type of the history unfortunate occurrences, and this one will be history one day, and very soon. So do not panic.
The government across various nations who cares for her citizen and desire the survival of everyone, and have advised that all, both the local man and the foreigners, young and the old, stay at home for a while, so that the work to contain the corona virus outbreak can be effective. The more people gather in large numbers is the more, the virus finds new hosts; hence it becomes uncontrollable.. which nobody wants.
There are ways to stay lively and enjoy this period without getting/feeling bored and the list follows below:
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First understand that this is a holiday, and not a worry-day
Although it is themed, “Stay-At-Home,” or “Lock-down,” it is also a type of holiday, but of which we do not want this sort of holiday to re-occur. You still have the option to make this period a resourceful and positive moment, by first changing your mindset to think of it as that holiday that the school management declares and everyone goes home smiling, and it is a privilege to be alive while this holiday passes by. It will help your mind to become very creative and sure suggest you more ways to enjoy your time.
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Stay Organized, make sure your environment is breathing fresh air
Even in a normal day to day living in your home, if you stay organized, plan your day, nothing will overwhelm you. And once nothing overwhelms you, then you can be sure of a clear mind to be in control. A man in control does not feel bored, rather he or she feels energized every time.
Look at it this way:
If you notice that, the organized man, have everything under control, and he can easily feel the fresh breathe in and around him. His environment is clean and well arranged, hence no need to look up and down each time. He sees this lock down as a normal day in the office with a few familiar colleagues to work with, this time his family.
Unlike the unorganized party, he tends to complain a lot, everything is dirty, his mind is clumsy, nobody and everything is welcomed. He just want to escape this period and run away, but it is still the same home or office that he will run back to. So no time is the best to stay organized and no place to run to, just arrange your home, get things under control and the lockdown will feel as a new town holiday.
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Get Enough Sleep
You remember those days you wished you could get enough sleep, but the long day at office never allowed you the opportunity.. yesss! Now you have the time. Do not be like the man, who wished for rest in busy day, but feel sad when the opportunity come, only wishing to go back to the party hall.
Be grateful that you are alive, go back to bed, help your brain to get enough rest, relax your cells, allow your skin to experience new fresh air. It is very ok to be lazy during this period, just wake up, make a cup of tea, and go back to sleep, no alarms, no mama pats to prepare for college, its just a free time to enjoy the cloud under your blanket. Do not loose this opportunity, it may only come again, just at the time you become as rich as Bill Gates, although Mr. Gates does not sleep a lot as you think.
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Family Time, No fights, be the peace maker
Have you ever thought of becoming a lawyer, ok now is the time to be a good one. Be the peace maker in your home, do not allow anybody to fight. The more you fight, the more the stress. A stressed brain is a depressed man, hence a boring day all through.
Did you notice that your last born baby could draw, may he or she is a great artist, and you never had time for her.. ok that’s fine, no judgments, just make peace with everyone and help out as a the tutor you should have been in a long time. Avoid any form of fights and you will scale this period with sound mind.
Hey married man, it is time to enjoy your wife’s delicious meals, and ye wife, make the best of all yummy. And you will also notice that dancing is not too hard to learn, so give it a try this time and entertain the house.
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Love your work, find a way to convert it to work from home
Have you noticed that almost every type or category of work have a home version of it, except that some of the special equipment may not be at home, just at the factories. That is fine, you can start to do the paper work planning now, within the next few days, you will round up with a lot of market plans and be having multiple alternatives to achieve greater goals.
This is the time to have enough time to discover new ways to beat the reshaping industry, innovatively. For example; what if after the pandemic, and your employees refuse to return to the office, would you close down your company? Obviously no! so it’s a good time to hand out that work manual, duties for your staffs to also continue working from home, while you still remain the boss from the comfort of your dining table. Try it now, and if doesn’t work, at least you tried, no harm and it is in the free time, so you can get back to work soon as you always do. Enjoy!
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Discover a new Art, everybody have some artistic part of them but may not have paid enough attention to it
Bill Gates have always been a lover of books, but it is during his long-supposed boring holidays, that he started putting down his thoughts into; Gates Notes.
Well, you can confirm within yourself, there is an expert artist, a superb Vlog producer, an audible podcast creator and even a great content writer. These all have been sitting right there, within you, but you have not had the time to work it out, and not that you can’t, it’s just that, you never had the time.
So here lays the time in quantum, and a lot of fans with you (the family) to cheer you up even when you make the clumsiest of art work. They will still say, wow! So you could draw as good as this… do some more. Opportunity comes but once, and here is one, don’t wait to create another one.. time waits for no man. Thank you.
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Read something new, which is not very serious and not really related to your work books, just some casual children stories
This is not the time to get too serious with work. This is the time to be very flexible, allow that humorous part of you to emerge, read something that is way jokingly, so different, so playful, tell those old stories to your kids before he or she sleeps at night.
Except you are a nerd, who must soak head in your school work book, you can also, pay simple attention to other editorial contents that doesn’t relate to your work, just to give your brain a different kind of vibe. Who knows if this unusual knowledge may be the new wave of the industry after this period.
You may also try to learn a new language, this will take your time, so before you realize it, the whole lockdown period is over. Listen to new genre of music. Watch different type of movies. Turn on those TV channels you always skipped. Just learn something new. If it is new, it will always be worth your time and effort.
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Spend more time with God than you ever did
It is time to pray extra 30 minutes. It is time to allow the world of science to breathe and ask your God what is the next step, the solution, your other callings and pay attention, he speaks and will surely talk to your heart with a mild voice.
God deserves praises, so give him extra hours in this time.
God is the greatest and will always be the greatest.
Do not worry about your religion, your God lives in your heart, so listen to him and ask those questions you have always had, and he will answer you now. We will all make it out strong, and God will be praised at last.
Trump Liberalizes the Conservatives
During the Obama Presidency, some politicians threw everything at him. Yes, some people who call themselves the Tea Party, fiscal hawks, conservatives or whatever made things very hard for him. Today, most of those men smiled as President Trump signed a $2 trillion stimulus bill, accelerating the U.S. deficit. As they clapped, hugged and boasted about the spending victory, one thing came to mind: why do men deceive themselves?
President Donald Trump signed a $2 trillion coronavirus relief bill on Friday, as Washington tries to blunt economic destruction from the pandemic ripping through the United States.
The House earlier passed the stimulus package, believed to be the largest in U.S. history, by voice vote, which simply measures if more lawmakers shout for “aye” or “nay” on whether to support it. The chamber scrambled Friday to block an effort to delay its passage.
If you see how these men opposed Obama as he looked for funds to get America out of the miry clay of 2009 market collapse, you would not expect them to join the current chorus of a bailout.
Ladies and gentlemen: every politician is the same – American, Nigerian or British. It is no permanent enemy, no permanent friend but a permanent interest. Yes, they simply want job security, and they would do everything to manipulate enough votes for a Win.
Since President Trump came, he is doing what he does best: spend other people’s money. And all those men who made a career of preaching fiscal conservatism, opposing any federal help to communities, have magically had brain transplants. Today, the liberals are outflanked because they cannot go big enough – on spending.
Sure, this is not to diminish the paralysis of Covid-19. My point is this: had Obama been running this show, these conservatives may be singing different stanzas. Not that they believe the spirit of their opposition; it is just that it would help them keep their jobs!
Mr. President’s Tweet
If you are a healthcare worker in the U.S. on any type of visa, the U.S. government will renew it or update it for work rights provided you can help in the fight against covid-19. As the U.S. does that, Nigeria is pulling out its health experts from Central Africa because it has a virus war at home to deal with. Ladies and gentlemen, Chinua Achebe would write about Eneke, the bird, thus: “Men have learned to shoot without missing their mark and I have learned to fly without perching on a twig”.
Mr Buhari said he has “directed the NCDC to draft all its recent retirees back into service to beef up our manpower as we respond to the pandemic.”
He added that all staff of the agency undergoing training or on foreign assignments should return to the country.
“Furthermore, all NCDC staff and experts who are away on training or international assignments are to return immediately.“Already the Nigerian Air Force (NAF) are conducting an evacuation mission to bring back some of our specialists in Central Africa, to enable them support the national response,” he said.
Yes, when things go really bad, the spirit of globalization collapses and readjustments happen on the rule of engagement. In Central Africa, there is a high chance that some hospitals will close just as without Nigerians, the Gambia legal system will struggle. Recently, a Nigerian was the head of the courts after another coordinated the writing of the constitution.
Mr. President has to do what he has to do, which is to protect Nigerians and mobilize his team from around the world. Certainly, while it is very painful to our neighbors for this recall, we need to face the reality of the time.
Yet, President Buhari needs to ensure that the U.S. and Europe do not come after his team as the hourly rate for nurses in San Francisco is hitting $120.
