As Nigeria gradually re-opens its economy following the relaxed curfew that was enforced by some state government to contain the unrest caused by hoodlums, many business owners in Africa’s largest economy may be returning to empty shops, offices and damaged buildings.
This is due to the disruption caused by hoodlums who hijacked what started as a peaceful protest of well breed Nigerians demanding an end to police brutality and bad governance in the country, as they made away with goods worth billions of naira.
The unrest, looting, destruction and vandalism of private and government properties by hoodlums coupled with the economic impact of the almost two weeks peaceful protest are a big hit for Nigeria’s fragile economy, already suffering from the double challenge of Covid-19 and low crude price.
According to economists, the Nigerian government could have been able to prevent the losses if it had reformed the police force, which the citizens have been demanding since 2017, the reason why the protest that led to killings of unarmed campaigners started in the first place.
“There is an opportunity cost or cost of stalling governance at all levels, and of course this is one of the critical parts of the security structure, but it also includes things like the regulation and the overlapping system of the regulators, the complexity of regulation, the exchange regime, the poor infrastructure,” Andrew S. Nevin, partner/chief economist, PwC Nigeria, said.
With four attempts in three years, Nigeria has been unsuccessful in its quest to reform its police force, an issue that recently pushed many Nigerians to the streets with the hope to pressure government into providing answers, as many now feel threatened by the security agency that was established to protect them.
“The motive for the so-called police reform is totally deceptive. There is no will power on the part of the government that is pushing to execute the reform,” activist and senior advocate of Nigeria, Ebun -Olu Adegboruwa, said.
The unintended outcomes coming from the frustration of the youths have been at great cost to the economy and it continues to create bottlenecks and disruptions to businesses and the economy in general, according to Toki Mabogunje, president, Lagos Chamber of Commerce and Industry (LCCI).
“The goods in my shop are worth more than N5 million. I am very pained because I just got new products. Coming here today, to see that my shop is empty is like my whole world has collapsed,” a young Nigerian who simply identified herself as Temmy, a shop owner at Leisure Mall at Surulere, one of the locations that were raided by the hoodlums, lamented.
Like Temmy and her three employees, Nnamdi, Idris and many others, were also affected by the activities of the hoodlums who according to BusinessDay survey are selling the stolen goods at prices far below the worth.
“I think business would see operations suffer, especially for businesses that have physical value chains,” Ayo Ayorinde Akinloye, a research analyst at CSL Stockbrokers Limited, said.
Aside from the losses caused by the hoodlums, Nigeria, according to LCCI may have lost over N700 billion in economic value in the period the protest lasted.
With business activities being disrupted it could lead to a downside in the economy, according to Joachim MacEbong, a senior analyst at SBM Intelligence.
Meanwhile, the International Monetary Fund (IMF), who projected a 4.3 contraction for Nigeria’s economy in 2020, attributed the recent social protest, (EndSARS) in Africa’s largest economy to economic difficulties, saying conditions in Nigeria for the last four years have been very difficult in the wake of the decline in oil prices in 2015-16.
Abebe Aemro Selassie, director, African Department, IMF, said there had been a lot of pressure on standards of living, “so there has been this dislocation and you know, as always when you have these kinds of economic difficulties, you know, social protests are not uncommon.”
According to Nevin, there is a wide range of sweeping reforms that is required for Nigeria to reach its full potential.
“But I have a lot of confidence in young Nigerians that through them the country will end up in a better place,” he said, adding that investors have a short memory and so they will pour into Nigeria as soon as they see improvements.
