The Nigerian economy is bleeding as the ongoing #EndSARS crisis in many parts of the country grounds millions of businesses that are yet to fully recover from recent COVID-19 lockdowns.
A peaceful protest against a rogue police unit known as Special Anti-Robbery Squad (SARS) turned violent on Tuesday night after soldiers opened fire on protesters in Lekki, a high-brow area of Lagos. Hoodlums resorted to violence the following day, burning down public utilities, police stations, and private homes of prominent politicians and their relatives/friends. Government of several states have imposed curfews to rein in on the activities of hoodlums and take control of security apparatus.
But this comes with a lot of costs as millions of businesses have shut down, and the cost of such is estimated at billions of naira.
Lagos State output is estimated at $136 billion, implying that the state may be losing $373 million each day from curfew and current crisis. Nigeria’s richest city earned N204.51 billion in the first half of 2020, meaning that the state could also be losing N1.13 billion from each day of the curfew. The state has 12 to 13 million micro, small and medium businesses, representing around 30 percent of 41.5 million MSMEs in the country, but these firms are sitting idle at the moment.
Manufacturers say their employees could not get to their factories because of security threats while exporters could not move goods to Apapa and Tin Can ports on Wednesday and Thursday because of the crisis.
“For two days now, most of my production staff members have not been here. They understandably cannot risk their lives. The situation has cost us up to N10 million in revenue,” a manager in a manufacturing outfit, who pleaded anonymity, states.
The management of Primero Transport Services (PTS) Limited, operator of the Bus Rapid Transit (BRT) in Lagos, says it lost over N100 million in six days to the sustained #EndSARS protests.
Mutiu Yekeen, head of corporate communications of transportation firm, states that the company has been making losses since October 16, 2020, when it suspended operations.
The Lagos Chamber of Commerce and Industry (LCCI) estimates that the first 12 days of the protest cost the Nigerian economy some N700 billion.
“Over the past 12 days, economic activities have been crippled in most parts of the country and have been particularly profound in the urban areas. The Nigerian economy has suffered an estimated N700 billion loss in the past 12 days,” the chamber said in a statement signed by Toki Mabogunje, president of the LCCI.
Transportation has been grounded for a number of days with major roads such as Lagos-Ibadan blocked. In September, Nigerians travelled mostly to or from Lagos, the FCT and Sokoto by bus, whereas air passengers paid an average of N36,884, according to the Transport Watch compiled by the National Bureau of Statistics (NBS). These activities have come to a screeching halt. The Nigerian Stock Exchange (NSE) lost N113 billion at the close of work on Wednesday due to the crisis.
Uche Uwaleke, professor of capital market and president of Capital Market Academics of Nigeria, says the cloud of uncertainty erodes confidence in the economy and leads to increased capital flight and drop in capital importation.
“This will lead to further pressure in the forex market. It may also attract downgrades by ratings agencies,” he states.
Olusegun Akintunde, analyst at Polaris Bank Limited, notes that the crisis will affect the quality of bank loans to SMEs and corporate organisations, saying, “Lack of economic activity is also expected to have negative impact on the earnings of SMEs and corporates owing banks. This will in turn affect their ability to service such loans and invariably affect banks’ loan books.”
The economy, in general, would be impacted negatively as the country’s major economic hubs were grinded to a halt.
“Expect a negative impact on government revenues, loss of jobs and more GDP contraction as it were,” he states.
Nigeria is still mired in COVID-19 lockdowns as many businesses are yet to fully re-open in many parts of the country, especially Lagos. Markets like Otigba Cluster in Lagos open three times in a week, which significantly affects traders’ revenue. Nigeria reported 118 COVID-19 cases on October 19, and experts say the cases may rise due to the protests.
According to a survey done by the LCCI after the five-week lockdown, 64 percent of respondents (mainly business leaders and owners) said they lost below N500,000 daily, while 16 percent lost between N500,000 and N1 million each day during the lockdown. Similarly, 12 percent lost above N5 million each day, while 7 percent incurred between N2 million and N4 million loss daily, during the period.
Concerned Nigerians’ recommendations
A group of 41 concerned Nigerians, a non-partisan actors that believe in the union of the Nigerian people, have called for urgent steps to be taken to prevent the chances of a potential war between Nigerian youths and the country’s security agencies.
According to a statement released on Thursday by the group, Africa’s most populous country cannot afford to tread the path of exacerbating ethnic and religious divides that can only lead to anarchy as over one hundred million of its people are still living in extreme poverty.
“No Nation can survive a war between its security agencies and its youth, and it is to avert this prospect that we make this intervention and recommend the following urgent action,” the Concerned Nigerians said in a document seen by BusinessDay.
Condemning the developments of the last few days that culminated in a deadly attack on peaceful protestors, the group said “available evidence appears to be by agents of our government on 20th October 2020” and “present one of the most serious crisis in our nation’s history.”
Haven watched with serious concern the unfolding crisis threatening to engulf Nigeria due to the recent protests by Nigerian youths across the country against widespread police brutality, endemic corruption, and bad governance, the group recommended that the four following steps be taken by all parties involved and should be done as a matter of urgency:
President Buhari should act urgently
While acknowledging that the response of the government to the protests has been largely slow, unconvincing, and half-hearted as it formally accepted the youths’ demand to end SARS but immediately announced it being replaced with SWAT, the Concerned Nigerians called on President Buhari to take immediate/urgent steps to address the widening trust deficit between the government and the president on the one hand, and the Nigerian youth and its people on the other.
“To move forward, the President must take decisive action to close the trust deficit by Identifying and arresting immediately the persons that instructed for soldiers to shoot protesting youth at the Lekki Toll Gate on 20th October 2020,” it said.
The group also urged the president to institute an urgent independent inquiry on the events at Lekki Toll Gate leading to the use of live ammunition on the protestors and the apparent use of sponsored thugs or hoodlums by security operatives to infiltrate and break the peaceful protests.
“All those identified to be responsible for this must be held to account and prosecuted,” it said.
Support youths’ demand
The concerned group, which has about nine senior advocates of Nigeria and about 32 other professionals, applauded the Nigerian youths for their courage to demand for their fundamental human right.
“We commend our youth who have been courageous and patriotic in their demands for the protection of their rights and for a better Nigeria. We urge that all Nigerians support these demands which have been without any ethnic or religious coloration,” the group said.
Law-abiding protests
The group urged the protestors to remain law-abiding and patriotic and not to engage in any intimidation or harassment of ordinary citizens or engage in any form of violence.
“We appeal to parties and stakeholders to work for the speedy resolution of the crisis.”
Avoid violent demonstration
“We strongly condemn the wanton destruction of properties, killings and maiming of innocent citizens and ethnicisation by rioters and hoodlums trying to ignite a religious or ethnic conflict and call on All Nigerians to remain calm and avoid retaliation or taking the law into their hands,” the group said.
According to the group, it recommended the aforementioned steps that need urgent implementation after it carefully observed and followed the unfolding events. Thus it said, “To halt our descent into a further breakdown of law and order, we call for urgent steps to be taken by all concerned.”
(BusinessDay)
