Amid weak economy and rising economy unemployment figure of over 27 percent, organised businesses have put their total losses to the recent nationwide #EndSARS protest and the looting and destruction that followed, at N5 trillion.
Taiwo Adeniyi, president of Nigeria Employers’ Consultative Association (NECA), at a press conference, Tuesday, in Lagos, on the state of the nation, said the arson and massive destruction that trailed the crisis have plunged the economy further.
According to Adeniyi, some businesses that were directly affected have closed shop and sent their workers home, a development that calls for urgent government interventionist measures, to get these businesses, some of which were already struggling from the impact of Covid-19, back on their feet.
“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.”
Quoting the World Bank, the NECA president, who was joined by Timothy Olawale, the director-general, said the Covid-19 shock alone was projected to push about five million more Nigerians into poverty in 2020.
He added that while 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 percent in 2019 to 42.5 percent in 2020.
“But still stuttering from weakened growth and struggling to recover from the negative effects of Covid-19, organised businesses became one of the victims of the colossal and barbaric destruction and vandalisation 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 gvernment estimated a loss of about N1 trillion and Plateau State government estimated over N700 billion, the total value of the economic loss to organised businesses nationwide could be in the region of over N5 trillion.”
Adeniyi lamented the looting of machineries, consumables, livestock, raw-materials, pharmaceutical products, luxury goods and cash to actual and wicked vandalisation and destruction of walls, smashed and mutilated doors, glasses, damaged critical electricity infrastructures, burnt buildings and properties and looted stocks.
The NECA boss observed that the actual value in terms of financial, emotional and psychological loss suffered as a result of the arson and looting experienced by these businesses could only be imagined, adding the impact would linger for a long time.
He commended federal and state governments and a number of non-governmental organisations for the initiatives and interventions aimed at mitigating the loss by businesses, particularly by the Lagos State government, the Central Bank of Nigeria, Access Bank, Federal Inland Revenue Service (FIRS) among others that have taken it upon themselves to support businesses to ensure the sustainability of the Nigerian economy.
“The proactive initiatives by the governor of Lagos through well-thought out tax-breaks, grants and other financial assistance from other stakeholders, have increased the confidence of organised business that better days are ahead.
“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. While the additional window of penalty and interest waiver for businesses by the Federal Inland Revenue Services is commendable, what businesses really need at this critical period is substantial tax relief to enable them stay afloat and also keep productive activities going.
It is in our national interest to enable businesses surmount the challenges of rising unemployment,” Adeniyi said.
He said NECA was of the view that setting aside an Intervention Fund for the purpose of easing the burden of losses incurred by businesses as a result of the dastardly acts would not only make a huge difference but it is in the enlightened self-interest of the nation.
“Approval of funds from the Stabilisation Fund of the Nigerian Sovereign Investment Authority (NSIA), among other possible measures would help stabilize the system and stop further increase in unemployment rate.
It is expected that there will be a likely threshold of higher premium attached to the insurance cover of the properties destroyed during the unfortunate incident. We, therefore, call for intervention to reduce the risk for businesses as cash flow will be tremendously affected in this regard.
We passionately condole the families of those that lost loved ones (both in the security forces and civilian populace), properties and investments.”
He urged the government to fast-track the investigation and prosecution of those found culpable in the killing and harassment of innocent Nigerians, which necessitated the call for EndSARS and also the arrest and prosecution of the hooligans that perpetrated the wanton looting and destruction.
“While the wanton destruction of properties and loss of lives were regrettable, the factors that led to the protest and eventual hijack by hooligans should not be lost on us as a people.
Greater efforts should be made to promote creativity, innovation, technical and vocational skills development and enterprise competitiveness as a way out of the spiraling unemployment rate, poverty and social dysfunction that is bedeviling our nation,” he explained.
He noted that the restoration of peace and order without which local and foreign investors will be deterred should now be an immediate priority, stressing that the Organised Private Sector of Nigeria (OPSN) was ready to work with all stakeholders in the private sector, government at all levels and other peace-loving Nigerians to restore peace and order.
He also observed that the clamour for restructuring of the national security architecture has reached a crescendo and on-going effort by government to respond to this call should be wholesale and far-reaching, as this would further enhance the confidence of investors in the Nigerian economy.
“Consideration of the yearnings and legitimate demands of the people should be given urgent attention in order to increase the people’s confidence in the Government and also forestall future agitations.
On-going efforts to maintain peace and order and the engagement of critical stakeholders, including the youths are welcome. The nation cannot afford to slide into avoidable anarchy, even as the world battles the threat of a second wave of the corona virus pandemic.
Organised businesses, with the leadership of our association, NECA, will continue to support Government at all levels in promoting the Nigerian economy, while urgent attention is given to the creation of an enabling environment necessary for businesses to thrive and the economy to flourish.
Without gainsaying, it is apparent that organized businesses cannot wholly depend on the publicly provided security architecture as the tendency for them to be overwhelmed is high as witnessed during the recent past. It is now imperative for businesses to make extra or alternative arrangement to augment the security of lives, properties and assets in case of future incidents,” he said
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