COVID-19 portends danger, wipes out $8tr, says LCCI

By Okwy Iroegbu-Chikezie

Lagos Chamber of Commerce and Industry (LCCI) President, Mrs Toki Mabogunje, has said Covid-19  is a looming catastrophe that requires urgent containment.

In a statement, she observed that the impact of the virus has national and global implications.

Globally, she said it has caused turmoil in financial markets, as fears of the pandemic wiped out over $8 trillion.

She said: “It has also caused reduction in global oil consumption as economic activities slowed down, resulting in falling oil prices. Disruption of global supply chains, the aviation industry, manufacturing, trade volume, etc. Many corporates are increasingly revising their earnings forecasts downwards.”

On the effect of the virus on Nigeria’s economy, Mabogunje said it has weakened oil prices, leading to the downward review of the 2020 budget. This, she said, has also caused disruptions in business and economic activities as companies and businesses shutdown, following lockdowns and mobility restrictions.

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The LCCI chief noted that the worst hit sectors are  aviation, hospitality, Small Medium Enterprises (SMEs) and manufacturing. She lamented the worsening fiscal and external positions of the country in the light of lower receipts from oil exports, depreciation of the naira exchange rate across various market windows and an adverse impact on Nigeria’s trade, as, according to her, the major trading partners in Asia and Europe are grappling with the challenge of lockdowns.

She advised businesses to review their strategies in line with unfolding developments and give consideration to the following: adoption of flexible business model to ensure tight control on costs and non-revenue generating segments of the business, review of supply chain and focusing on import substitution and backward integration as much as possible.

Others, according to her,  are leveraging technology in business processes for efficiency and cost-effectiveness while broadening the scope of remote working for employees.

Mabogunje commended  the Federal and state governments, and some private sector initiatives for their efforts in containing the pandemic.The intervention funds being raised by the Central Bank of Nigeria (CBN), with partnership of some corporations to fight the pandemic and donations by international organisations, such as the Jack Ma Foundation, the founder of Alibaba, are also commendable, she said.

‘’The pandemic is a tragedy of global proportions and should be brought under control and eliminated as early as possible. The truth is that it is only the living and the healthy who can do business or undertake any other productive activities for that matter.The corona virus pandemic is not just a threat to our economic and social lives but a threat to our collective humanity,’’ she added.