ECONOMIC RECESSION IN NIGERIA: ROLES OF PROCUREMENT.

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ECONOMIC RECESSION THE ROLES OF PROCUREMENT AND
SUPPLY CHAIN MANAGERS

• By
• Akeem Bello
• FIPMA, MCIPSMN, MIDS

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Brain Teaser!!!
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What is Recession?

• A decline in a countrys GROSS DOMESTIC PRODUCT
  (GDP) growth for two or more consecutive quarters
  of a year.
• A US-Based - National Bureau of Economic Research
  defined Recession as
• significant decline in economic activity
  lasting more than a few months which normally
  visible in real GDP, real income, employment,
  industrial production and wholesale-retail sales
  
• if recession continues for more than 6 months,
  then we go through Depression Economy

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Gross Domestic Product (GDP)

• Gross Domestic Product (GDP) is the monetary
  value of all the finished goods and services
  produced within a country's borders in a specific
  time period.
• GDP is usually calculated on an annual basis, it
  can be calculated on a quarterly basis as well.
• GDP includes all private and public consumption,
  government outlays, investments and exports minus
  imports that occur within a defined territory. In
  a simple word, Gross Domestic Product (GDP) is a
  broad measurement of a nations overall economic
  activity.

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GDP Calculation

• GDP C G I NX
• where
• C Consumers Spending
• G Government Spending
• I Countrys Investments
• NX Total Net Export (Exports Imports)

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GDP.

• GDP is commonly used as an indicator of the
  economic health of a country, as well as a gauge
  of a country's standard of living.
• Since the mode of measuring GDP is uniform from
  country to country, GDP can be used to compare
  the productivity of various countries with a high
  degree of accuracy.

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How to Calculate Per Capital Income

• To understand per capita income, one first needs
  to understand how income of a country is
  calculated
• Assume that in year 2016, the amount of goods
  and services produced by Country N, and their
  market prices are as follows
• Let's assume that 7,000 people are living in
  Country N. Then, GDP per capita for the country
  is 77,000/7000 11.
• It means that in 2016 a citizen of Country N
  enjoyed an average of 11 value of goods and
  services.

Products/ Services No. / Quantity Price Per Unit, Total Price,
Matches 1000 50.00 50,000.00
Toothpicks 2500 10.00 25,000.00
Dressmaking 10 200.00 2,000.00
Total Value of Production Services Total Value of Production Services Total Value of Production Services 77,000.00
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Nigeria GDP Statistics (1992 2015)
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Comparing Nigeria
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Is Nigeria in Economic Recession?
Is Recession good for Nigerians?
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Words on Marble

• Some people believe recession is a bad thing, but
  it is actually a health economy cycle.
• When we experience a pain somewhere, it is a
  sign that something is not right thus we must
  quickly remedy the problem. As for the economy,
  when there is a recession, the best method is
  always the bitterest method, just like medicine.
• We got into a recession because the global
  economy went into the recession and we're a big
  exporting nation Stephen Harper
• Only when the tide goes out do you discover who's
  been swimming naked..Warren Buffet

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Where are we?
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How did we get here?
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(No Transcript)
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Effects of Recession
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Getting out of the Wood

• Survival Strategies

Go Bargain Hunting
Seek New Businesses/ Strategic Investments
Prudence in Governance
Patronize Local Goods/ Services
Encourage Local Contractors
Strengthening of Internal Security
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Predictions

• The World Bank Global Economic Prospects report
  released in December 2016 shows that the
  sub-Saharan African growth is projected to
  slightly increase by 2.9 while the Global
  Economic Growth would pick up moderately to 2.7
  in 2017. 
• The World Bank has predicted that the Nigerian
  economy would rebound from recession and grow by
  1 in 2017
• IMF also predicted that Nigeria Gross Domestic
  Product (GDP) will grow by 0.8 percent in 2017
  and 2.3 percent in 2018.
• A London-based World Economics report declared
  Nigerias economy is showing prospects and that
  the economy will recover from the recession by
  months to come

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How can Procurement contribute to accelerating an
Economic Recovery? Can Procurement make Society
Better?
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As the professions status improves in
both the public and private sectors, it is
critical to use this influence and power for
positive ends Babs Omotowa Managing
Director/ CEO of NLNG
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Good Governance Vs. Procurement System
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Traditional Roles of Procurement

• The 2 Major Roles
• Planning, Coordinating and Monitoring of
  Procurement Activities
• Supervising compliance with Procurement Laws,
  Rules and Regulations

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Expectations
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National Economic Development

• A saving of 5-10 of national budget can be
  expended on other valuable areas that can be
  bring about national economic development.
• Periodic review of actual against plan is
  necessary to measure of savings and to ensure
  that budget are properly monitored and executed
  in an efficient and effective manner
• Value analysis, market forecasting, consolidation
  of requirements, standardization of materials,
  competitive bidding, long-term contract and power
  negotiation are famous methods to reduce the cost
  of procurement

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Social Responsibilities (SR)

• Refraining from the use of child labor, excessive
  work hours, gender equality and any other form of
  exploitation are facets of social responsibility.
  
• Public Procurement can also be an outstanding
  tool to promote SR as government operates as both
  regulators of and participant in the market.
• Procurement / Supply Chain Managers should play a
  major role in stimulating SR and corporate
  accountability.

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Industry Innovation

• There is a growing tendency for many countries to
  use cooperation between public and private sector
  to resolve procurement needs.
• A partnership approach offers a different
  procurement process in which it might be possible
  to imagine a greater roles for innovation.
• PPP arrangement brings about innovation and
  economic growth hence it should be encouraged.

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Eco-friendly Activities

• Also refer to as Environmentally Preferable
  Procurement OR Green Procurement.
• This approach means integrating environmental
  factors into procurement policies.
• Preventive activities before quality problem
  occurs are the best way to manage the quality
  which make a good sense to control materials/
  items to procure before it can relate to
  environmental problem.

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Leadership in Organization

• Dont follow the crowd to do the wrong things.
  Follow the rules and not the roads
• Be seen as a role model through a transparent
  work process
• Work as a team and not as a boss
• Be more creative to be ahead of your peers.

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Leadership Tips

• Title does not mean leadership.
• Leaders are accountable, taking responsibility
  for failures, and they demand equal
  accountability from everyone else on the team.
• The best leaders are transparent and fair.
• Leaders embody the very best work ethic that
  everyone else strives to have
• Respect comes when your colleagues see you as
  someone who practices with integrity and humility

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• We can dodge responsibility but we cant dodge
  its consequences Sen. Ben Murray-Bruce
• The main task before our leaders is not to
  blame, but to convert our population from a
  population of consumers to a population of
  producers Sen. Ben Murray-Bruce

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Food for Thought

• The recession wont be over till we raise a
• GENERATION
• That knows how to live on what theyve got

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The End

• Thank You