Omodele Adigun, Bimbola Oyesola, Uche Usim, Steve Agbota, Chinwendu Obienyi and Chiamaka Ajeamo
In a country where infrastructure deficit is put at $102 billion, while only two per cent or less of its $459 billion GDP is actually going into infrastructure development, the carnage and destruction of both private and public properties last week may eventually plunge the nation into tailspin.
This is a warning from both international and local experts while assessing the level of damage and economic loss to the citizenry.
For instance, the Director of International Monetary Fund (IMF) African Department, Mr. Abebe Aemro Selassie, said the civil unrest in Lagos, which contributes significantly to Nigeria’s overall Gross Domestic Product (GDP), could have a negative consequence on the economy.
IMF had on Tuesday reversed Nigeria’s economy growth projection to -4.3 per cent in 2020 from its earlier projection of -5.4 percent. The IMF also projected that Nigeria’s economy would grow by 1.7 per cent in 2021 from its projected decline of -4.3 percent.
That projection did not envisage the massive destruction of federal, state and private sector infrastructures by EndSARS protesters across the country.
Responding to questions during the virtual IMF press conference on the regional economic outlook for Sub-Saharan Africa, Thursday, at the ongoing annual meetings of the IMF/World Bank in Washington DC, Selassie, called for timely resolution of the crisis to prevent the economy, which is still reeling from the effects of the COVID-19 pandemic, from slipping further into a t ailspin.
His words: “Are we concerned? We are always concerned when we see protests, particularly ones that are difficult like the one in Nigeria at the moment, and we hope that there would be a satisfactory resolution there.”
Reviewing the economic loss due to the unrest, the Lagos Chamber of Commerce and Industry (LCCI) said the economy lost N700 billion in 12 days.
Its President, Mrs Toki Mabogunje , in a statement last Monday said the protests have crippled economic activities in the country due to disruptions, blockades and barricades around major cities and interstate highways.
She stated: “The Lagos Chamber of Commerce and Industry is, however, concerned about the negative impact that the protracted nature of the EndSars protests has on business activities across the country. Over the past 12 days, economic activities have been crippled in most parts of the country and has been particularly profound in the urban areas. The Nigerian economy has suffered an estimated N700 billion loss in the past 12 days.”
In the same vein, the management of Primero Transport Services (PTS) Ltd., an operator of bus rapid transit (BRT), Lagos, reported to have lost 63 buses to aeson when its bus terminals in some parts of Lagos were attacked, said it lost N100 million in six days to the #EndSARS protests.
According to Mutiu Yekeen, the company’s head of Corporate Communications, the company made a lot of losses between October 16 and October 21. Yekeen said activities have been suspended because the protest has been hard on its operations.
He explained that the BRT had not been operating since penultimate Friday, adding that the state government also declared curfew, which means no transporter could operate from 4pm on Tuesday.
His words: “We are hoping something better will come out of the situation because, presently, the situation has impacted negatively on our business in terms of revenue generation. We have lost over N100 million in the last six days but we decided to stop operations to avoid damage to our vehicles and also for the safety of commuters as an organisation. We value our customers more importantly; that is why we stopped operation due to volatility of the state.”
Front wheels of economic activities deflated
In his view, Mr Abdulazeez Kuranga, a Research Analyst at Cordros Capital, said the mayhem may have punctured the nation’s wheels of progress and added pressure to the slow recovery process.
His words: “Before the protests began, we forecast that Nigeria’s real GDP would contract by 3.9 per cent year-on-year (y-o-y) in the fourth quarter (Q4) of 2020. With the unrest and curfews put in place by different states, the front wheels of economic activities have been deflated. This has added pressure to the slow recovery process predicated on the persistent foreign exchange (forex) liquidity constraints, improved compliance with OPEC oil production cuts and general low level of business activities indicated by the PMI. So, we expect the re-introduction of restrictive measures by state governments in response to the ongoing social unrest to drag on the economy. “Accordingly, we now estimate Nigeria’s economic output will contract by 6.91 per cent y-o-y in Q4 2020, translating to a negative growth of 4.15 per cent at the end of 2020. However, we note that the economic impact is likely to be more severe if the unrest and curfew persist beyond the month of October. The transportation, trade, and manufacturing sectors are expected to be the hardest hit. On transportation, we expect reduced domestic and international flight operations pending when normalcy is restored.
“Similarly, we expect compliance with curfew directives to hinder the free movement of people and goods across the country, further compounding the woes of the transport sector, which is yet to recover from the COVID-19 induced decline. While the manufacturing sector is currently being hampered by FX related issues and an unfriendly business environment, the imposition of curfews will further exacerbate the challenges of the sector. For the trade sector, the decline in household consumption brought about by higher food prices and shrinking consumers’ income will cascade into weak wholesale and retail trade in conjunction with the pre-existing supply chain constraints.”
The country ‘ll be losing over N60 billion everyday
The Managing Director Universal Quest Nigeria, Mr. Sotonye Anga, toeing the same path with Kuranga, said the impact of the economic loss of #ENDSARS is huge, doubting if the country can recover from the magnitude of the loss that will come as a result of the protests.
He stated: “It is so unfortunate that things have to come out this way. People protesting without guns, without any weapons, they were unarmed. It is unfortunate things happened the way it is now. But if you look at it, the country will be losing over N60 billion everyday. People that are supposed to be in their warehouses, offices, they are not there.
“So the country is at a standstill. In Lagos today, nothing is happening, banks cannot open, offices cannot open, markets are closed and everywhere is shut down. So the economic lifeline of Nigeria is in a state of comatose. So, it is a painful thing. You cannot ship agriculture products. You can’t do anything, which means a whole lot of contraction obligation will witness huge default. It is a terrible thing. My heart wept at this moment.”
He said both federal and state governments have lost control and people don’t even know who is in charge of the country.
He said the first duty the government owns the people is to provide security, because security is the right of individual in Nigeria.
“As it is today now, you can’t get into your car and drive freely because nobody is safe. People are taking laws into their hands because they feel they have the right to do so and everything is being blamed on the peaceful protesters that have been killed at the Lekki Toll Gate. Based on that, people are doing whatever they feel like doing in an attempt to vent their anger.”
Economic loss is collosal
Commenting on the widespread carnage, a member of the Presidential Task Force on Customs Reforms, Mr Lucky Amiwero, lamented the razing of the headquarters of the Nigerian Ports Authority (NPA) in Marina and other critical infrastructure belonging to the government and private sector.
While declining to put a financial value to the loss, he described it as colossal, adding that the arson sprang from pent up anger over the years of growing youth unemployment due to several years of bad governance and misrule, which has given rise to too many poor and frustrated people in the society.
He said: “There are too many poor people over the years, especially youths in the system. You see a situation whereby people of 70-80 years and above are recycled as governors, senators, Reps members, presidents and ministers etc. year-on-year and the youths are there watching. It is no longer news that graduates, Master’s degree and PhD holders in Nigeria drive commercial motorcycles, called Okada, and do so many other menial jobs just to survive.
“For over 60 years after political independence in 1960, Nigeria has not been governed right, go to other African countries that got political independence with Nigeria at the same time, the story is different. Go to neighbouring Ghana and Togo and see things for yourself. More than 60 years after, there is no foundation in Nigeria for creating jobs and the youths have come to the realisation that this narrative has to change and the government failed to handle the agitations properly.”
It was gathered that the maritime sector has lost hundreds of billions of naira in terms of man hours, demurrage that would be paid on delayed berthing and discharge of vessels because workers were not on duty due to the protests that crippled socio-economic activities and other avoidable charges on import and export consignments, which could not be handled as soon as they arrived the ports.
Weighing on the impact of the mayhem on his sector, Ekerete Gam-Ikon, Insurance Consultant said many businesses that did not have insurance cover might find it tough to return for a long time.His words:
“This very sad development will certainly affect the insurance industry and our national economy adversely. Indeed, the year 2020 has become a watershed in Nigeria’s search for nationhood, in my view.
“Nigeria and Nigerians are reawakened and every sector and every individual will be required to respond positively and take advantage of the opportunities this bad situation creates.
“Specifically, the insurance industry has to brace up for the expansion of the customer base by building capacity to provide the insurance coverages that people and businesses will need into the future.
“When you consider the carnage, you will observe that some businesses that did not have insurance cover might not return for a long time while those with insurance will be better positioned to bounce back.
“As you might have known also, only policyholders that have Riots Strikes and Civil Commotion (RSCC) extension can engage their insurers on claims arising from the carnage. So, you are unlikely to have high magnitude of claims as compared to what our eyes have seen on vandalised and burnt assets.
“Again, I would also think it is the moment for the insurance industry in Nigeria to step up and take its position to educate and enlighten the public about its role and what had been done for businesses previously to keep them open,” he said.