Lagos State is unarguably the most populous and prosperity city in Nigeria and accounts for up to one third of the country’s gross domestic product (GDP) according to Financial Times. Based on that assumption, Lagos is estimated to have an economic size of N48.5 trillion ($134.8billion) making it the 4th largest city economy in Africa behind Johannesburg, Cape Town and Cairo.
As the most populous city and the transportation hub in Nigeria, it is not surprising that Lagos is the worst hit city by coronavirus in the country, yet the government who had initially put Lagos on a partial lockdown to control the coronavirus outbreak is now gradually reopening the economy despite a rise in the number of new cases reported every day.
Read also: Lagos eyes full re-opening of economy, embarks on businesses’ readiness assessment
The reason is not far fetched as the local economy may have been hit even harder than the coronavirus outbreak in the State due to the lockdown. Daily economic output in Lagos is estimated to be around N133 billion, therefore a total lockdown to lead to a complete loss of all economic output. To put this into perspective, N133 billion lost every day in Lagos is the equivalent of snatching N5,600 out of the pocket of all 23.9million Lagosians.
The sheer size of this loss on a daily basis due to a prolonged lockdown could cripple Lagos economy and force companies to consider moving primary business locations out of Lagos due to fear of bankruptcy if they cannot operate in the State due to a lockdown. The partial lockdown is estimated to cost Lagos between N33-66 billion everyday in lost economic productivity as the skeletal operations of companies during the partial lockdown could cost business operations to drop to anywhere between 25-50% of normal operations.
This may explain the choice by Lagos to adopt a partial lockdown rather than a total lockdown which will have far reaching impact on economic productivity and internally generated revenue ( IGR). Lagos is among an elite group of States who can sustain state government activities using only IGR and a total or partial lockdown could hurt IGR collections for 2020, throwing the State’s financial position into distress.
As at Friday last week, there were about 2,099 reported coronavirus cases in Lagos with 33 deaths. Though the State government is worried about maintaining the health and wellness of its populace, it will be doing so knowing that considering a total lockdown could also snuff live out of the economy that 23.9 million people rely on to survive.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
