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Thanks for joining: PwC Nigeria's FS Webinar COVID-19 and the Financial Services Industry Conversations with Business Leaders Accounting, Financial reporting and Tax Presentation starts: 9:00am

Kenneth Erikume Partner, Tax Reporting & Strategy PwC Nigeria The Moderator Welcome

Andrew S. Nevin Partner and Chief Economist & West Africa Financial Services Leader Opening Remark

Bolanle Adekoya Partner and Capital Market Accounting and Consulting Services Leader, PwC Nigeria Subject Matter Expert 1

COVID-19 and its impact on Financial reporting

COVID-19 and its impact on Financial reporting Expected Areas of Impact for the FS Industry: 01 IFRS 9- Impact of financial assets 02 Valuation of other assets 03 Impairment of non-financial assets IAS 36 Interim reporting under IAS 34 and other disclosure 04 considerations Other considerations 05 Internal Date PwC 6

IFRS 9 – Impairment of Financial Assets Estimating Measuring Use of Collateral Expected Effects of Significant Expected Forward values Cash flows Government relief – Increase Credit Loss looking pledged on from loan Credit Risk (ECL) information loans portfolio Moratorium, (SICR)/ and bearing in forbearance, Staging Macroeconomic mind declining reduced factors profitability& interest rates liquidity Impairment of Other financial Hedging - low risk asset instruments including valuation – classes and instruments receivables Fair values designated for affected by hedging changes in interest rates

Valuation of Other assets Current changes in market realities affect valuation inputs – cash flows, market inputs Fall in share prices hence entity’s market capitalization Availability and fluctuation in data would affect Collateral values and assets on books Disclosure of sensitivities around assumptions and fair value hierarchy Change in counter party credit risk Investment property valuations Additional disclosures on assumptions

Impairment of non-financial assets IAS 36 ( Value in use vs Fair value) Must carry out Downward Quality of impairments – turn in market earnings and – affects Triggers exist cashflows carrying value - - Measuring Expected Credit Loss Models (ECL) Measuring Expected Credit Loss Models (ECL) Goodwill and Effects on Assumptions other budgets and used intangible forecasts assets

Interim reporting under IAS 34 and other disclosure considerations Current changes in market realities affect valuation inputs – cash flows, market inputs Tax impact including deferred tax – is it a discrete event for effective tax calculation? Use of estimates and judgements, especially for valuations and impairments Effect on any recent future transactions like Business combinations - - Measuring Expected Credit Loss Models (ECL) Measuring Expected Credit Loss Models (ECL) Possible breach of loan covenants as a result of ratios being breached temporarily Significant disclosures (IAS 34 paragraph 15B) ▪ Around segment information ▪ Risk management – credit risk, liquidity risk, capital management, financial risk, Market risk (Forex, Price, Interest) ▪ Events after balance sheet date ▪ Additional regulator requirements ▪ Going Concern

COVID-19 and its impact on Financial reporting Other considerations: Share based payments Leases ▪ Valuation ▪ Modifications ▪ Effect on dilution ▪ Impairment of right of use assets ▪ Warrants ▪ Cashflows Employee benefits Provisions, contingent liabilities and contingent assets ▪ Curtailments ▪ ▪ Restructuring provisions, if required Planned assets Other ▪ ▪ Outstanding contingent considerations Sensitivity analysis and liabilities considerations Extensive disclosures required Government relief programmes ▪ Including from other stakeholders ▪ Financial services vs Customers ▪ IAS 20 Internal Date PwC 11

Key considerations for the FS Industry What should you do next? ▪ Do thorough assessment of impact ▪ Recalibrate ECL models using macroeconomic realities, possible scenarios (look ahead) and probation periods ▪ Carry out valuation exercises both for financial and non financial assets ▪ Update assumptions in business use cases, budgets and forecasts ▪ Look at opportunities for hedging and capital management strategies ▪ Stress-test the balance sheet of entities ▪ Prepare adequate disclosures to tell the story including sensitivities of assumptions used ▪ Incorporate interim reporting considerations Internal Date PwC 12

Thank you PwC

Sam Abu Partner and Financial Services Assurance Leader, PwC Nigeria Subject Matter Expert 2

Taiwo Oyedele Fiscal Policy Partner and West Africa Tax Leader Subject Matter Expert 3

COVID-19: Fiscal Policy Responses and Tax Measures Navigating a path never travelled April 2020

Content Overview and context: Economic impact of COVID-19 3 Key challenges for businesses Fiscal policy responses and tax Lorem ipsum measures dolor sit amet, consectetur Recommendations and closing adipiscing elit Lorem ipsum thoughts dolor sit amet February 2020 NNPC Retail Limited Lubricants Business Plan Presentation Title Date PwC 17 17

Overview and context: Economic impact of COVID-19

Nigeria’s pre -existing economic challenges amplified by the COVID-19 pandemic Fragile economy, low Low revenue, rising High unemployment rate, Insecurity: Boko Haram, GDP growth and rising debts and budget unequal access to limited kidnapping, ritual killing, poverty deficits (FG & states) opportunities internet scams, robbery etc Rising poverty – Nigeria Worsening infrastructural Low ranking on Low investment in human challenges – power, became the poverty competitiveness and capital development capital of the world transportation etc ease of doing business increasing vulnerability PwC Analysis PwC Analysis COVID-19 and the Nigerian Economy April 2020 PwC 19

Key challenges for businesses

The challenges facing businesses are multidimensional PwC COVID-19 Survey: Top challenges facing businesses In a recent survey by PwC Liquidity Nigeria on the most pressing needs for businesses (with over 500 Business Owners and Cost C-suite Executives), a number Safety of reduction of issues were highlighted by personnel respondents. Business Below are the top 3: Working 1. Liquidity (availability of Infrastructure capital to work cash to pay bills) management remotely 2. Safety of personnel Sales and 3. Infrastructure to work from distribution home April 2020 PwC 21

Fiscal policy responses and tax measures

Nigeria’s fiscal policy responses COVID-19 Crisis Intervention Fund Subnational support • Establishment of a N500 • Draw down on World Bank facility 1 2 billion COVID-19 Crisis (US$82m) and additional Intervention Fund financing from the REDISSE • To upgrade healthcare (US$100m) project to meet facilities COVID-19 emergency needs by • Fund Special Public Works States/FCT. • FG’s N102.5b in resources to be Programme to generate employment available for direct interventions • Adequate framework will be in the healthcare sector. Already put in place for the collection, disbursed N6.5b to NCDC and management and reporting of N10b to Lagos state • US$150m to be withdrawn from donations into the Fund • COVID-19 Donor Accounts to the NSIA Stabilization Fund to be opened with Zenith Bank, support the June 2020 FAAC Access Bank, Guaranty Trust disbursement • Debt and interest moratorium for Bank, UBA and First Bank • To form part of the existing States on FG and CBN-funded TSA arrangement loans to create fiscal space April 2020 PwC 23

Nigeria’s fiscal policy responses Budget revision and funding Tax reliefs and allowances • Benchmark oil price revised to • 2019 Finance Act already 3 US$30/b from $57/b and production 4 grants tax exemptions to small to 1.7mbpd from 2.18mbpd. businesses, while the tax rate • Concessional funding from WB, for medium-sized companies ADB, IDB and IMF’s COVID -19 has been reduced from 30% to Rapid Credit Facility 20% • • VAT exemption for expanded No intention to negotiate or enter into a formal programme with the list of basic food items plus IMF medical and pharmaceutical • Downward adjustment of non-oil products • Ministerial Orders for charitable revenue projections, customs receipts and proceeds of donations to fight COVID-19 to privatisation exercises be tax deductible • • Release and (where necessary) Budget Office to revise 2020-2022 MTEF / FSP enhance the hazard allowances • Amended Appropriation Act will of federal health sector workers • Affected States are enjoined to provide for COVID-19 Crisis Intervention Fund take similar measures. COVID-19 Nigeria's Fiscal Policy Responses April 2020 PwC 24

… and better coordination of policy responses and measures to be lead by the Economic Sustainability Committee Economic Central Bank MFBNP Petroleum Ministry of Industry, Trade United Sustainability of Nigeria Resources Health & investment Committee COVID-19 Nigeria's Fiscal Policy Responses April 2020 PwC 25