As some states look forward to reopening their COVID-19-battered economies amid workers agitation to resume at their workplaces, stakeholders are considering various options that can help minimise the effects of the lockdown, TOBA AGBOOLA writes.
The growing negative impact of the COVID-19 pandemic on the economy has induced a drastic review of the revenue and profit projections of corporate organisations.
Stakeholders have said recession is coming and that it may be Nigeria’s worst in 30 years. They said by the time the lockdown was lifted, Africa’s largest economy might be facing a recession that could last until next year.
However, they are confident that only aggressive responses through the government coordination will lead to positive economic and humanitarian results.
Speaking on post-CONVID-19 stimulus initiatives by the government to revive the economy, the Director-General of the Nigeria Employers Consultative Association (NECA), Dr. Timothy Olawale, said since the arrival of the index case in the country in February, NECA had proposed several interventions to governments, at the federal and state levels, in developing stimulus packages for industries to minimise the impact on businesses as well as its workers.
He said: “We believe that with the growing spread of the COVID-19, it is having a significant and unsettling impact on businesses and with implications for employers of labour, the main emphasis is and should be on containing and mitigating the impact.”
He explained that the economic impacts were significant, and many companies were feeling their way towards understanding, reacting to, and learning lessons from rapidly unfolding events.
“In the short term, to minimise the potential job loss, we suggest as the practice in other climes, that government augment payment of salaries of workers’ of companies that are worst hit by the impact of the pandemic by at least 50-70 per cent for the next four months.
“To cover for workers that are temporary and contract staff, employers can submit a list of all contract staff with BVN numbers who will be compensated, subject to confirmation of employment status and consistent inflows.
“For those without BVN, the employers can be offered a zero-interest loan through the Bank of Industry (BOI) for three months, which is equivalent to the total payments they make to casual workers. These companies can be tracked to ensure that disbursements are made into bank accounts, thereby guaranteeing subsequent financial inclusion.
“We also proposed that Federal Government grant tax waivers, provision for restructuring of existing loans, lowering of interest rate through the Central Bank of Nigeria, and other fiscal interventions to businesses in order to sustain businesses and protect job loss.”
The Lagos Chamber of Commerce and Industry (LCCI) Director-General, Mr. Muda Yusuf, called for the government’s review of the financial support package that it had pursued in the wake of the deadly COVID-19.
According to Yusuf, the government has to redesign the recovery strategy tool by doubling the level of access to emergency policies that will jump-start the economy.
This, according to Yusuf, could be fast-tracked by expanding the use of fiscal precautionary measures through creation of short-term liquidity by considering options to help companies meet their financing needs.
Yusuf argued that if Nigeria’s real GDP growth downgraded to -3.4 per cent in the year, as against the IMF’s forecast of two per cent growth earlier in the year, following the institution’s Article IV Consultation, there is urgent need for the Federal Government to look outside the box because the lockdown is expected to significantly affect economic activities in Nigeria.
“This is because in light of increased external and domestic pressures following COVID-19, the IMF revised its 2020 growth forecast for Nigeria to a -3.4 per cent from two per cent.
“The general theme remains the high level uncertainty surrounding the pandemic as well as low oil prices.
“The lockdown in major states is expected to significantly affect economic activities in Nigeria.
“To fight this pandemic, the IMF recommends leveraging emergency funding to support healthcare spending and provide social protection.”
He, however, added: “Beyond the serious human impact of the CONVID-19 pandemic, it is obvious that the economic consequences will be severe, especially for Nigeria that fall into the group of emerging markets and developing countries with exporters of goods and economies with poor health systems.”
President, Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI), Comrade Oyinkan Olasonoye, said while governments and the Central Bank of Nigeria (CBN) intend to adopt large-scale measures to save jobs and enterprises, and provide workers with support, not all workers or enterprises might benefit from the measures.
She said: “We are worried that for the informal economy workers, lockdown due to the pandemic means loss of income with no possibility of receiving unemployment benefits.
“Informal micro and small enterprises that constitute 80 percent of enterprises are generally out of reach of government policies.
“Part-time workers, many of who are women, temporary workers, or workers under short-term contracts and in the digital gig economy are frequently not eligible for unemployment benefit or income support.”
President, Nigeria Labour Congress (NLC),Comrade Ayuba Wabba, said in adopting short-term responses to the CONVID -19, urgent attention should be devoted by the government to protecting low-income households.
“This means income support measures are not broad enough to cover the most vulnerable workers and the enterprises that employ them,” he said.
Wabba, who argued that informality and limited fiscal space add to the difficulties for palliatives measures for Nigerians, however, said: “Income support could be extended through non-contributory social security schemes or existing cash transfer programmes. Support could also be offered temporarily to informal enterprises.”
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