Duration: Date: 3 hours Thursday, August 24, 2022 Case Study - Gredon Nigeria Limited Aisha Ajibade has just been promoted from General Manager to Chief Operating Officer (COO). Part of her mandate is to reposition the company for sustainable superior performance. She has tasked her team to organize a strategy deep dive session to review performance of the company and plan for the future. Brief profile of Gredon Gredon Nigeria Limited is a large local conglomerate with average annual sales of N15b. The company manufactures and distributes footwears for men and women across the West African sub region. Nigeria however accounts for 75% of company's turnover and profit. Gredon is a major player in the footwear industry with about 7% of the market share (a 10% reduction in the last 2 years). The company's turnover fell by 8% last year and profitability was curtailed by the harsh operating environment in Nigeria Economic outlook 2022 The IMF predicts economic recovery gains from services and agriculture with GDP growth reaching 3.6% (y) in Q1 2022 in their recently published Economic outlook for Nigeria. The report also predicts that economic growth is expected to broaden to all sectors except oil with reduced production worsened by security challenges. Inflation has peaked at 17.7% (yly) in May. This was driven by a renewed surge in the prices of food, and further worsened by the Ukrainian war. In a bid to tame inflation, the Central Bank of Nigeria recently raised its monetary policy rate to 13% (by 150 basis points). Despite high oil prices, gross FX reserves fell to $38.6 billion at end-May 2022 causing continuous strain on Foreign Exchange rate between the official and pa parallel market. September 2021 boosted by SDR allocation and Eurobond issuance. Nigeria's GDP growth is projected at 3.4% (y) in 2022 while inflation is expected to remain elevated. Government's fiscal deficit is expected to remain high at 6.1 percent of GDP. This is attributable to a large extent to unsustainable petrol subsidies and poor revenue base. In the short term, it is expected that the risk will include deteriorating security conditions and the upcoming elections in 2023. On the positive note, the economy is expected to continue on a steady recovery and growth. It is also estimated that the new Dangote refinery will start operations. Unemployment Nigeria has demographic profile with a high dependency ratio (proportion of non- working age over working age). More than 50% of the country's 200 million people are under the age of 30. At current growth rates, Nigeria's population is projected to increase to 400 million by 2050 making it the 4 most populous country in the world. Unemployment is estimated to hit 33% in 2022. According to the Q4 2020 unemployment report released by the National Bureau of Statistics (NBS), a total 23.18 million persons in Nigeria either did nothing or worked for less than 20 hours a week, making them unemployed during the period Digital Technology One in every two West Africans is a Nigerian. Nigeria has the largest mobile market in Sub-Saharan Africa, assisted by significant mobile broadband infrastructure and enhanced international connectivity. However, access to minimal fixed broadband infrastructure and connectivity is acute in rural areas is leaving a relatively large segment of the population without Internet access. The global digital economy is estimated to grow from 15.5% (2016) of the world's overall GDP to reach 25% before 2030. The phenomenal growth is expected to surpass the growth of the overall economy. According to an NBS report, in Q2 2020, the tech sector contributed 17.83% to Nigeria's GDP, more than 14.55% in Q2 2019 This performance has made the Nigerian ICT sector attractive to investors and stakeholders. This new trend has inspired a fresh path to sustainable income for citizens and potential players in the sector Questions