A World on Lockdown and IMF Relief

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The novel coronavirus continued its devastating rampage across the world as a sizable portion of the globe remained quarantined. In the U.S., total unemployment rose to 4.4% in March 2020 and is expected to rise significantly higher to double digits in April.

However, this number does not paint the full story.

The unemployment figures for March were calculated in the four-week period from mid-February to mid-March. Nearly 10 million jobs were lost in the first two weeks of April as a result of the pandemic which points to a significantly higher unemployment rate by the time the April numbers are released.

Certain sectors were particularly affected as demand for most goods such as travel and leisure were hard hit, almost dropping to zero in some cases. U.S. gross domestic product fell by 4.8% in the first quarter of 2020, the first negative result since the 1.1% decline in the first quarter of 2014 and the lowest since the negative 8.4% recorded in the fourth quarter of 2008.

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Consumer spending, nonresidential fixed investment, and exports were gravely affected; federal spending, however, was up by 1.7%. It is important to note that while the first quarter only had two weeks of the shutdown, it had an outsized impact on the performance of the economy. This points to a potentially worse impact in the second quarter even if the quarantine is lifted shortly.

Although the world’s second-largest economy, China, has restarted after an unprecedented shutdown, there are signs that the economy is struggling to attain pre-COVID-19 levels. Factories are at less than full capacity and tens of millions of workers are out of work. In addition, the Chinese are discovering that overseas demand has slumped considerably.

China’s first-quarter GDP contracted by 6.8%, the first contraction since 1992. Retail sales fell 19% in the first quarter, sales of consumer goods fell 15.8% in March, while online sales of physical goods bucked the trend and rose by 5.9%. While all major industrial enterprises have resumed work and smaller businesses are at 80% capacity, business activity has not yet fully returned to normal due to the dramatic drop in exports.

Read Also:  Market’s Fears Spread Along With Wuhan Virus

So far, the IMF has responded to emergency financing requests from various countries. The facility now exceeds USD 15 billion and covers over 50 countries in April, especially in Africa with the largest beneficiaries being Nigeria, Pakistan, South Africa and Egypt.

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For Nigeria, the IMF approved a $3.4 billion emergency financial assistance package under the Rapid Financing Instrument. The IMF financial support will help limit the decline in foreign reserves and provide financing to the budget for targeted and temporary spending increases aimed at containing and mitigating the economic impact of the pandemic and of the sharp fall in international oil prices.

The IMF facility would be of immense help as foreign investors who sold their securities in the past month have been unable to repatriate the proceeds as a result of dollar scarcity.

The Federal Government also cut down the budget by N317.5 billion to N10.276 trillion. The crude oil benchmark was also slashed to $30/barrel from $57/barrel, oil production volume was reduced to 1.7mbpd from 2.17mbpd, and the exchange rate was revised to N360/$1 from N305/$1. The Nigerian National Petroleum Corporation (NNPC) also announced the end of the era of the petrol subsidy.

According to the NNPC, with the current fluctuations in global crude oil prices, the cost of refined products would be determined by market forces going forward.

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In addition, the country began the gradual easing of the lockdown imposed in Lagos, Abuja and Ogun effective May 4th citing the heavy economic costs of the 5-week lockdown. As part of the easing process, authorities will enforce an overnight curfew from 8 p.m. to 6 a.m. and will require individuals who are out during the day to wear a face mask. There is also a ban on non-essential interstate movements.

Excerpts from Nigeria Macroeconomic Markets Report by Comercio Partners 

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Singapore Employees Lack Retirement Support From Companies While Financial Wellbeing Becomes a Top Priority: Aon Survey

SINGAPORE - Media OutReach - 14 April 2021 - Aon plc (NYSE: AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, has released the findings of the 2021 Trends in Retirement & Financial Wellbeing survey for Singapore.


Working adults in Singapore ranked retirement planning as their top priority but an alarming 80% underestimate how much they really need to retire. While retirement support from employers is also lacking, further challenges remain around transparency in group retirement plans' investment offerings and employees foregoing long-term perspectives to seek short-term gains.

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Ashley Palmer, Regional Managing Partner, Retirement & Investments, Asia for Aon, said, ""Employers can have a significant impact on how much their employees save by instilling smart habits and healthy money behaviours. The right long-term savings vehicles, effective communications and financial tools will help Singapore's workforce be more financially resilient in the wake of the COVID-19 pandemic."


The survey identifies three main themes in financial wellbeing and retirement support for Singapore employees.


Financial wellbeing support is the new employee expectation. As a result, close to 40% of employers rank an employee financial wellbeing strategy as their highest priority, followed by emotional and mental wellbeing support. The survey shows that 70% of Singapore employers will formulate or execute financial wellbeing programmes throughout 2021, in line with employee expectations. Companies also view offering a financial wellbeing programme critical in increasing employee engagement and remaining competitive in the talent market.


There is an increasing trend of employer-led supplementary savings plans. Currently, 22% of companies surveyed offer Central Provident Fund (CPF) top-up contributions to citizens and Permanent Residents. But, close to 40% of the working population in Singapore are foreigners who do not have access to CPF and are likely to have foregone their retirement benefits in their home countries. To bridge this gap, and to provide equitable retirement benefits to all employee groups, close to 50% of the organisations surveyed offer supplementary retirement benefits to their foreign staff. Financial services firms are leading in this practice, followed by the technology and the healthcare sectors.


Promisingly, a third of organisations in Singapore are prioritising a thorough review of their supplementary retirement arrangements in 2021.


Alicia Brittain, Senior Consultant & Actuary, Retirement & Investments, Singapore for Aon, said, "Forward-looking companies first need to understand the financial worries of their employees and identify the gaps in their benefits offering. The most effective approaches are aimed at changing individual behaviours towards money and savings and providing accessible programmes and vehicles to deliver sustainable change. For example, when organisations provide retirement benefits as cash-in-lieu, it is most likely immediately spent and so does not form part of an emergency fund or long-term savings for the employees' retirement years. Supplementary retirement plans solve this issue and are more flexible and cost effective - and can also offer contributions above the monthly CPF wage cap to increase employee savings."


Employees in Singapore lack a well-defined default investment strategy. Less than 30% of the surveyed companies in Singapore currently offer their employees an investment choice in their retirement plans, and only 15% of retirement plans have a default investment fund. This leads to employees selecting their own optimal investment funds. They may lack experience in understanding investments, which can lead to misallocating their money and result in inadequate retirement savings or excessive risk taking.


Brittain added, "The key to protecting employees and adding value to savings in any defined contribution retirement plan is a well-defined default investment strategy. This includes frequent performance monitoring, actively managing investment risks and dynamically reducing investment risk as employees move towards retirement."


Notes to Editors

The Aon 2021 Trends in Retirement & Financial Wellbeing for Singapore survey was designed to help organisations understand the unique retirement and financial needs of their Singapore workforce. This tri-annual survey was completed by organisations with employee populations ranging from five to over 4,000 and are based in Singapore. Responding Rewards and Benefits Leaders, HR and Finance Professionals provided feedback and insight on their organisations' financial wellbeing and retirement programmes, interests and concerns. Click here for the full report.

About Aon

Aon plc (NYSE: AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

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Stay up to date by visiting the Aon Newsroom and hear from Aon's expert advisors in The One Brief.


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