The organised private sector has expressed opposition to a fresh shutdown of the economy, reports this day.
While NECA disclosed that any fresh lockdown would lead to a loss of 2.7 million jobs, LCCI said the previous lockdown would lead to a 45 per cent increase in unemployment rate.
In their separate interviews with THISDAY at the weekend, OPS argued that the government should focus its energy on gradual easing of the lockdown and enlightening Nigerians on the necessity to comply with the official guidelines issued by relevant government’s institutions on how to prevent community transmission.
NECA Director-General, Dr. Timothy Olawale, said: “The implications of another lockdown will be shocking to the economy, businesses and individuals. It will threaten between 1.28 million and 2.75 million of jobs nationally. Prior to the advent of COVID-19, the economy had been struggling with a huge budget deficit that was occasioned by low revenue and external shock.
“Therefore, easing the lockdown is about the only way of striking the necessary balance between the economic and the health crisis as a nation.
“The OPS would rather request that governments at all levels should be responsible for restoration of the economy while working towards flattening the curve.
“We would rather suggest that, it is imperative that the federal, state and local governments should set up robust safety guidelines and measures in place and strictly enforce them to enhance sustainable living whilst reducing and containing the spread.
“The implication for the Nigerian economy can only be imagined. The most important thing is that all protocols should be enforced by government. The failure of the public to observe the guidelines is not enough reason. The government should bring its full weight to bear on the enforcement,” he said.
To LCCI Director-General, Dr. Muda Yusuf, the initial lockdown had profound negative effects on jobs, income, revenues and business sustainability.
Yusuf argued that the government should rethink any intention to re-introduce the lockdown and continue with the gradual easing of the economy to save the livelihoods of hundreds of thousands of Nigerians who are mostly in the Small and Medium Enterprises space because life and livelihood are both important.
He warned that the government had very limited capacity to manage the social consequences of another round of total lockdown.
“We have seen some easing of the lockdown in some sectors – manufacturing, office administration, ICT, financial services and trading. But some critical sectors are still in complete lockdown. These are entertainment, hospitality, aviation, interstate transportation and restaurants. These sectors are critical to employment. They are labour intensive and, therefore, have high employment elasticity and have large multiplier effects resulting from their extensive value chain.
“So, rather than re-enact the lockdown, we should be thinking of easing it and developing robust sector-specific COVID-19 protocols to manage the risk of further spread,” he said.
Similarly, NACCIMA Director-General, Mr. Ayo Olukanni, expressed the view that a lockdown should not be the way to go.
“Rather, we must work to achieve a balance between curtailing the rate of infection and keeping the economy running. Another national lockdown is not a guarantee that we will no longer have spread of infection because we have seen that these lockdowns have been obeyed more in its breach.
“We may not have the exact figures now, but economic losses from the first lockdown have been estimated to be in trillions of Naira,” he said.
Ndubusi cautioned that the possibility of another lockdown should be handled carefully, pointing out that the economy is currently in tatters. “The high incidence of poverty in the country would make it very difficult for the government to enforce another lockdown and the country may find itself in crisis. Many firms are in serious negative financial conditions and may prefer a gradual reopening of the economy rather than having another lockdown,” he said, insisting that “another lockdown will not be value-adding.”
The organised labour has also said it would not support any move to restore full lockdown of the country again.
NLC General Secretary, Mr. Emma Ugboaja, who spoke to THISDAY yesterday, said any measure, which would stifle the economy, is not what is needed at the moment.
“We are against total lockdown; we are for opening the economy sector by sector. You should give a sector-specific guideline. We are for opening up not shutting down. The government should be able to give guidelines for each sector to operate,” he noted.
He argued that some people could not work from home.
“We need people at the construction site, we need people in the farm to operate the agricultural sector and we need the transport sector to be on the move effortlessly,” he said.
Findings from a survey carried out by LCCI to determine the impact of the lockdown on businesses in Lagos State showed that the unemployment rate would rise to 45 per cent as businesses execute cost cutting measures to survive the impact of the lockdown.
The survey, which was titled “Lockdown and Its Impact on Businesses: LCCI Survey Report,” noted that cost-cutting strategies particularly downsizing has implications for the economy from unemployment and productivity perspectives.
“First, it will exacerbate the already-high level of unemployment as more and more workers risk impending job losses. This may see the unemployment rate surge to 40 per cent and 45 per cent by the end of 2020 from 23.1 per cent as at Q3-2018. Additionally, the potential risk of huge job losses will aggravate the magnitude of stagflation in the economy. This has a ripple effect on the Gross Domestic Product (GDP) given that private consumption by households accounts for about 60 per cent of national output.”
The survey, which was released yesterday by Yusuf, said 63 per cent of business operators was weighing plans to downsize operations to minimise losses, adding that this development is not surprising as businesses have not generated income for over a five-week period and have lost trillions of naira in profit due to lockdown.
“This suggests that the unemployment rate is expected to increase drastically post-lockdown except government takes urgent steps to support business owners towards surviving and ensuring business continuity.
“Most of the respondents (46 per cent) intend to slash salary and reduce the workforce as a joint measure, while 24 per cent has the plan to cut personnel cost only, 13 per cent intends to trim staff strength only, while 17 per cent are proposing no salary payment,” the report said.
The survey stated that 81 per cent of the respondents were ‘severely’ affected by the lockdown, while 17 per cent experienced a moderate impact on their business, adding that 50 per cent of businesses in the service sector experienced a severe impact by the lockdown.
It stated that 64 per cent of the respondents suffered a loss of N500,000 and below daily during the lockdown while 16 per cent indicated a daily loss of between N1 million – and N2 million. Only about 20 per cent of the businesses suffered more than N2 million daily losses and above during the lockdown.
“A conservative assumption that sampled business operators lost an average N500, 000 each day during the lockdown suggests that each operator lost N17.5 million within the five-week lockdown from March 31 to May 3, 2020. This modest estimation indicates that about N2.7 billion was lost in revenue by sampled businesses to the lockdown. This translates to trillions of naira losses for thousands of businesses operating in Lagos.”
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