At a briefing in Lagos, NECA lamented that the arson, looting and massive destructions of businesses across the country had worsened the nation’s economic crisis, urging both the federal and state governments to immediately come up with serious measures to help businesses that were affected to save them from imminent collapse.
At a briefing in Lagos, NECA lamented that the arson, looting and massive destructions of businesses across the country had worsened the nation’s economic crisis, urging both the federal and state governments to immediately come up with serious measures to help businesses that were affected to save them from imminent collapse.
NECA President, Mr. Taiwo Adeniyi, who informed that some businesses that were directly affected had closed down and sent their workers home, said “Prior to the outbreak of COVID-19 pandemic, the Nigerian economy had witnessed tepid domestic growth, constrained fiscal space, low foreign and domestic investments, declining foreign reserves, which made the economy disproportionately vulnerable to the twin shocks of crude oil price/production collapse and a health crisis.
The GDP was projected to grow at 2.93% in 2020; however, this was reversed to -4.3% by the International Monetary Fund (IMF), following the outbreak of COVID-19 pandemic, and its rapid twist into a global pandemic in Q1 2020, which has had corresponding economic consequences.”
According to the World Bank, the COVID-19 shock alone is projected to push about 5 million more Nigerians into poverty in 2020.
Against this Adeniyi stated: “Before the pandemic, the number of poor Nigerians was expected to increase by about 2 million largely due to population growth, the number is now projected to increase by 7 million – with a poverty rate projected to rise from 40.1% in 2019 to 42.5% in 2020.
“Still stuttering from weakened growth and struggling to recover from the negative effects of Covid-19, organized businesses became one of the victims of the colossal and barbaric destruction and vandalism of critical investment and assets by hoodlums.
“This act not only compromises the ability of these businesses to meet obligations to their creditors, vendors, employees and Regulators amongst many others, it also has the capacity to cripple efforts at reducing unemployment and attracting foreign direct investment into the nation. While the Lagos State Government estimated a loss of about 1 Trillion Naira and Plateau State Government estimated over N700 Billion, the total value of the economic loss to organized businesses nationwide could be in the region of over N5 Trillion.
“From looted machineries, consumables, livestock, raw-materials, pharmaceutical products, luxury goods and cash to actual and wicked vandalism and destruction of walls, smashed and mutilated doors, glasses, damaged critical electricity infrastructures, burnt buildings and properties and looted stocks.
“The list is endless. The actual value in terms of financial, emotional and psychological loss suffered as a result of the arson and looting experienced by these businesses can only be imagined and the impact will linger for a long time.”
While commending some measures by the federal and state governments, especially Lagos, Mr Adeniyi noted, however “it is critical that further initiatives need to be urgently put in place to ensure a quick return to economic normalcy across the country.
“We, therefore, urge the Federal Government to, without delay; make public details of its planned support for the businesses that were affected: we recommend that deliberate bail-out funds for verified businesses affected by the crisis as well as other programmes and interventions aimed at supporting these businesses to get back to production and remain sustainable and competitive in the long run, be urgently initiated.”
Credit: Vanguard