Pakistani companies are more optimistic than others about the post-pandemic future

At this rate you might be wondering if it is worth your time reading yet another Covid-19 report. Will a cure be found? Will our economy return to normal? These questions, and others we have no answers to, seem to dominate global headlines. 

ACCA, or the Association of Chartered Certified Accountants, takes a different approach in its June global survey “The Road to Recovery”, authored by Jamie Lyon, the association’s head of business management. 

Rather than provide its own dire predictions, or speculate on the future, the report allows for respondents to take the centre stage. In doing so, the report acts like a snapshot of our current times, and is a reminder that people and companies, including in Pakistan, are more in control than we think, and have done at least some long-term planning. 

ACCA has around 227,000 members in 176 countries. For this survey, it asked 4500 ACCA members across the private and public sector, and in companies of varying sizes. 

Make no mistake: that ‘road’ to recovery still has a few bumps ahead. According to the report, organisations face increasing operational challenges as a result of the ‘domino effect’ of Covid-19. 

“Irrespective of size, sector or country the economic and social impact of the pandemic has expanded, and challenges are growing for business and the accountancy profession,” Lyon noted. 

He also explained the ACCA’s roadmap to recovery advice, known as the three As: Act, Analyse, and Anticipate. In the first two month stage, companies should ‘act’ and respond sustainably to the immediate crisis in the short term; in the second stage of two months, companies should ‘analyse’ the different information sources to start to build the path to recovery; and beyond the fifth month mark, companies should ‘anticipate’ how strategies need to evolve over the longer term.

Across the board, respondents are concerned about revenue, with 83% of them expecting revenues this year to decline compared to last year; and 40% expecting revenues to be down by at least 25%. 

In Pakistan’s case, the ACCA dubbed the country’s overall picture as one of a ‘slow return to normal’. Around 55% of respondents in Pakistan said employee productivity has been negatively affected, while 52% say customers have stopped or reduced their purchases. Most worryingly, 71% admit to cash flow problems.

Sajjeed Aslam, head of ACCA Pakistan said: ‘Our data for June reveals continued cash flow challenges, with half of respondents in Pakistan saying this is a problem. Since the March research, the new data reveals greater concerns over financing and debt issues, and given the global economic climate, it means these will be difficult matters to resolve.”

“The key issue at the centre of these issues is a collapse in customer demand for many organisations, with more than half of respondents citing purchases as completely stopped or reduced here in Pakistan,” he added. “It is a domino effect, with both product launches and investment plans being deferred, further compounded by supply chain challenges and issues with customer order fulfilment.”

However, despite these challenges, Pakistani respondents were still upbeat about future expectations. For instance, only 6% of respondents thought revenue would fall by over 50%; compare that to close to 20% of respondents in Hong Kong, or 25% of respondents in Nigeria. 

Similarly, a sizable 48% of Pakistani organisations are focusing on the long-term return to strategic opportunities, for the future beyond six months. This is a much better proportion than other countries, such as Brazil, where the pandemic has hit hard. Only 17% of respondents said they were focusing on the long term: the more pressing matter was the here and now. 

That long-term focus has caused Pakistani organisations to shift gears somewhat. For instance, 72% have now adopted flexible working-from-home strategies, with 42% adopting staff rotas to accommodate social distancing requirements.

On the cost front, 47% are implementing an operating cost reduction strategy, while 40% are reviewing organisation processes to identify efficiencies.

And yet simultaneously, a significant 27% are evaluating their social responsibility to the wider communities affected by the outbreak: always a positive development.  

According to Aslam, the pandemic has had a profound effect that will resonate well beyond 2020. “But it is good to see respondents planning ahead, thinking of the longer-term while managing the present, and also thinking of the bigger picture about their responsibilities to the wider community that’s also been impacted by Covid-19,” he noted. 

One not so bright spot? Our national grumbling about the state of our government was well and truly represented in this survey. Only 22% of the respondents rated the economic stimulus package as effective. In this regard, Pakistanis were less enthusiastic than China, Singapore and the UK (well above the 50% mark); but also Vietnam, Mauritius and Brazil (around the 30% mark). 

Lyon noted that there could be implications of time lags for certain jurisdictions, as more broadly our data suggests that “as time goes on and effectiveness measures have time to embed, the perception of the effectiveness of these measures increases.” 

Translation: if you had kept the lockdowns in place longer, people might begin to see the government as more effective. And that would have implications, again, for how much more confidently Pakistanis can envision their future, post-pandemic.