Still healing from the aggressive impact of coronavirus pandemic on businesses, local manufacturers will be hard hit if the #ENDSARS protest and unrest persist, analysts have said.
After the shooting of unarmed #ENDSARS protesters by soldiers on Tuesday, hoodlums resorted to looting shops and malls, burning down public and private buildings, and committing acts inimical to business. The youths were earlier protesting police brutality, calling for an end to the rogue Special Anti-robbery Squad (SARS) of the police force.
In view of this, analysts project that local manufacturers will lose more than expected this year on the back of the recent events that have led to decline in demand, lost receivables, as well as restricted movement of personnel, products and services.
Omobola Adu, economic analyst at GDL Nigeria, said beyond the impact of the pandemic, revenue of manufacturers could take a worse turn following the unrest. He, however, noted that it could be controlled if necessary steps and actions would be taken by the government to calm the situation.
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“Yes, but the impact would depend on how long the unrest continues. For example, if the curfew imposed for states like Lagos and Edo goes on in the coming weeks, then there is a good chance that it would negatively impact revenue for the quarter due to halt in production, distribution and sales,” Adu said.
However, if the government manages the situation well, and based on the president’s speech on tasking security officers to do all that is necessary to calm the situation, then there won’t be a significant impact on revenue,” Adu explained.
Adelaja Olayemi, Lagosbased research analyst, said: “The protest disrupted economic activities and it may actually continue to weigh on the revenue prospects of manufacturers if not properly contained because it affects large-scale customers and consumers. Beyond this, the unexpected break amid the partial resumption will draw back the recovery of sector players,” he noted.
Ambrose Oruche, acting director-general, Manufacturers Association of Nigeria (MAN), told Businessday that the sector was already pressured, noting that its productivity and impact were declining. He added that the challenges had become tougher on the back of the pandemic outbreak and the lockdown which followed.
“Not all manufacturers have recovered from the lockdown, even after resuming, foreign exchange is a major challenge, and if nothing is done in the next quarter many industries will shut down because many cannot get the raw materials needed,” he further said.
Prior to this unrest, the Lagos Chamber of Commerce and Industry (LCCI) said the economy lost N700 billion in the first 12 days of the protest.
