Merit Ibe
With the COVID -19 pandemic pervading all spheres of the economy, there are pointers that the country’s manufacturing sector is already reacting to the scourge as firms are now struggling to pay workers and resorting to slash in salary amid sundry challenges.
The Lagos Chamber of Commerce and Industry (LCCI) had admitted in a memo that these were very challenging times for the country’s business community as a whole following the COVID-19 pandemic causing severe dislocations in businesses and the economy.
The pandemic has caused disruptions in supply chains, travel restrictions, exchange rate depreciation, breach of contractual agreements, macroeconomic shocks, loss of revenue, suspension of business activities, erosion of investors’ confidence and many more.
During the imposed lockdown and curfew, it was gathered that some factory workers in blue-chip firms in the country missed salary payments, as the companies complained of shortage of raw materials availability for production and many more.
However, the Manufacturers Association of Nigeria (MAN) has confirmed that truly many manufacturing firms have been overstretched beyond meeting salary payments of their workforce, even as they struggle to remain in business currently following government’s policy summersault-partial border closure and COVID-19 pandemic issues.
Its acting Director General, Ambrose Oruche, affirmed that the delay by government not to roll-out stimulus package (bailout) to manufacturing firms in food and beverages, domestic/industrial plastic & rubber, basic metal, iron & steel, chemical & pharmaceutical group and printing, publishing & packaging (6Ps) group sectors of the sectors at this period of COVID-19 pandemic on time worsened the whole gamut of the country’s manufacturing sector. He envisaged imminent mass redundancy in workforce, salary pay cut, arrears of workers’ salaries, factory shutdown and others could be the order of the day.
Oruche explained that many firms are struggling to remain in business and salary payment of workers is becoming an obstacle, adding that the failure to roll-out palliative measures for the sector by government is expected to further skyrocket the country’s unemployment rate, with job losses.
“Yes, for the food and beverages, chemical and pharmaceuticals, iron and steel sectors to pay workers is an issue, that’s true. So that’s why we (MAN) are working with government and its relevant agencies to arrest the situation of laying -off workers, salary cut, closure of industries and others, so as not to add to the country’s already volatile unemployment rate. I can categorically say there is every likelihood they will owe workers in these sectors when there are no palliative, no incentive to them, including government not yielding to our request to support the manufacturers with stimulus package for them to be in production in any form they can. So, if they are not doing well, they will have to make do with salary cut, lay-off workers and also shutdown production. Already, I know those ones that are not doing well and have closed down and told their workers to go home.
“For instance, you told them not to work for weeks because of lockdown, how will they pay their workers salaries when you didn’t extend stimulus package to them.”
Meanwhile, the LCCI Director General, Muda Yusuf, in a statement quoted that the current situation called for a review of business models and strategies across sectors, saying it was a new normal for operating firms to scale-down their operations, production and workforce at this period, thereby, describing the COVID-19 pandemic as ‘dark cloud’ in the anal of Nigeria as a nationhood.
“We will continue to provide the needed support to strengthen internal business strategies of members and sustain the drive of our advocacy to tackle external factors affecting business, especially in the area of government policy, regulations and institutional relations. We will be holding webinars to provide pathways to new business strategies and insights.”
In its survey conducted recently, LCCI had indicated that over 80 percent of businesses were under the adverse impact of the pandemic.
This came from the report of the chamber’s survey on “Lockdown and its Impact on Businesses,” which also indicated that 50 percent of the businesses affected were in the services sector while only 17 per cent of the businesses it covered had minimal adverse impact.
The chamber also called for strategies that will enable businesses navigate through current storm brought on by the pandemic in order to jump-start the economy post-lockdown. The report added that a significant number of business interests in the country have taken serious financial hit from the pandemic.