Increased insecurity on the back of massive job loss a possibility
… as Covid-19 hits harder on Nigeria
Mariam Osayi, a shop owner in the famous Ile-Epo General Market, sells frozen foods, raw rice, oil, and garri. Last Friday morning, she counted her losses as hoodlums barged into her shop in their numbers and carted away goods worth over N50,000. Similarly, a Lagosian simply identified as Femi was stabbed on his way from work Thursday night while his attackers made away with his phones and cash.
While Nigeria is faced with economic and health crisis amid the outbreak of COVID-19, the biggest economy in Africa will also have to deal with increased cases of criminal activities, law offenders and other social atrocities, etc., hiking its security challenges. This may result from possible massive job loss stemming from the effect of the ongoing pandemic across the globe.
In March 2020, the International Labour Organisation (ILO) projected that the virus could claim up to 24.7 million jobs, which will force a rise in the unemployment scale. Similarly, the African Union (AU) in a recent report projected that no less than 20 million jobs were at risk in Africa due to the impact of the coronavirus pandemic.
This is a further headache for the Nigerian Federal Government that has battled over the years with the high unemployment rate. According to the National Bureau of Statistics, Nigeria’s unemployment rate stood at 23 percent in 2019. Analysts fear that this is not close to reality and may rise faster due to the pandemic.
In a bid to reduce the widespread of the virus, authorities of various countries have been forced to take drastic measures that include reduced human interaction, restricted and regulated movement, suspension of commercial actions, general lockdowns and other restrictions, which has slowed or brought to halt business activities and making some economies prone to a recession.
With companies being forced to reduce and, in some cases, suspend business operations, possibilities of salary cuts and worst-case scenario, a layoff is inevitable. SMEs engaged in trading activities and manufacturing are also threatened as some may have to pack up.
Akinloye Ayorinde, an analyst at CSL Stockbrokers Limited, says the coronavirus that has caused a slowdown in economic activities will grow the unemployment rate, as many companies will engage in layoffs, which will also affect the country in different forms including an increase in its security challenges.
According to Ayorinde, the virus will lead to layoffs, especially in industries vulnerable to the outbreak, and this will increase the already high unemployment rate. In addition, when there is a reduction in aggregate demand of goods and services, companies will not be able to keep up with running costs and will be forced to lay off some workers.
“Some of these workers have dependents, therefore if laid off, they will look for a means to survive, if nothing lawful is forthcoming some might be pressured to engage in illegal activities which will drive up crime rate,” he said.
An increase in security problems will further dampen investment decisions in Nigeria by foreign investors and also may see the Federal Government increase fund allocation to fight insecurity at the expense of infrastructure financing needed to boost Nigeria’s snail-paced GDP growth rate.
A report by the Lagos Chamber of Commerce and Industry (LCCI), themed insecurity in Nigeria; implications for the economy, shows that conflict and issues around insecurity cost Nigeria $121 million and has affected functioning businesses in the economy while threatening foreign direct investment into the country’s economy.