Refocus all CSR budgets towards the fight against Covid-19

What you need to know:

  • In Kenya, the extent of devastation that the coronavirus can unleash on the economy is just beginning to take shape.

  • A recent projection by global management consulting firm McKinsey shows Kenya's GDP could plummet to 1.9 per cent.
  • These figures are not good news and should serve as a driver for all in the corporate world to join hands and stop this plague in its tracks.

Since President Uhuru Kenyatta made a passionate appeal to the corporate world to help the government its efforts to stop the spread of Covid-19, companies are relooking at their books of accounts to see what they can do to support the initiative.

One by one, the corporate world is lining up to join hands in the fight against the novel coronavirus disease. Already, hundreds of millions of shillings has been pledged directly or indirectly to fight the scourge. From the manufacturing sector to finance, the petroleum industry to agriculture, every corporate entity is doing its bit to join the war against the deadly virus.

Pointedly, the main focus now is on containing and mitigating the virus itself. But the economic consequences are glaring and firms are navigating their paths towards understanding, reacting to and learning lessons from the unfolding events.

Unanticipated twists and turns will be revealed with each news cycle. Companies must, however, work to keep their supply lines open to continue serving the public to the best of their ability.

We all understand the risks that the spread of the coronavirus poses to businesses, society and human existence. Since it was first diagnosed last December in Wuhan, China, Covid-19 has infected more than a million people and claimed nearly 60,000 lives across the world. The ravaging virus does not seem to be slowing down, with projections indicating that it could be months before it is put under control.

The petroleum industry, in particular, fully supports to the government initiative against the coronavirus. The companies have ensured that their staff are safe and have flexi time to server customers, with some of us donating the items necessary for prevention of infections, such as hand sanitisers, to the public.

We have also effectively leveraged our financial, logistics, distribution and bulk storage capabilities to ensure all the nine markets where we operate are sufficiently stocked and serviced with quality oil products to avoid further disruptions to normalcy.

Companies must refocus their corporate social responsibility programmes and budgets to help to create awareness while pumping up the fight against Covid-19.

In Kenya, the extent of devastation that the coronavirus can unleash on the economy is just beginning to take shape. At this point in time, nobody knows how it will pan out.

A recent projection by global management consulting firm McKinsey shows Kenya might lose up to Sh1 trillion in output if the spread of the coronavirus is not checked. The firm further indicated that gross domestic product (GDP) could plummet to 1.9 per cent — from the current 5.2 per cent growth.

These figures are not good news and should serve as a driver for all in the corporate world to join hands and stop this plague in its tracks.

The pandemic comes at a time when the economy is stretched. It must not be allowed to worsen the situation. All the available statistics so far point to a shrinking economy.

The latest Stanbic Bank Purchasing Managers’ Index (PMI) survey indicates a drop in business activity to levels last witnessed 13 years ago, with a large drop in consumer demand and client orders. The headline PMI dropped to 37.5 last month from 49.0 in February. This trend is expected to continue, even as stricter measures to contain the coronavirus pandemic are rolled out by the various government agencies.

The biggest issue with the coronavirus menace is that a majority of firms downplayed the risks associated with the scourge. Covid-19 caught everyone flat-footed. Few companies envisaged, planned and budgeted in their yearly projections what is being witnessed. The emergence of Covid-19, therefore, means that the corporate world must go back to the drawing board and relook at their growth projections and strategies and include its adverse effects.

In addition, companies must take into account the effect of the measures that the government is putting in place to fight the spread of the disease. As it stands, it is a requirement by law to release workers by 4pm to ensure that they comply with the 7pm-5am countrywide curfew imposed recently as part of efforts to contain the virus. This means less productivity on the part of the labour force.

But firms will still have to budget for additional costs in trying to ensure employer safety. Implementing working from home programmes will, in many cases, mean additional operational costs that were not envisaged at the time of planning for the year.

In such a scenario, there is only one thing to do: Refocus and rebudget all the CSR programmes towards the fight of Covid-19.

Mr Mohamed is the CEO, Hass Petroleum Group. [email protected] @HassPetroleum