With many sectors yet to re-open, while commercial activities remain subdued, the Lagos Chamber of Commerce and Industry (LCCI), has expressed fears that continued disregard for the COVID-19 protocols may prolong economic recovery, as government mulls actions to contain the pandemic.
According to the LCCI, disregard for protocols may accelerate the spike in the spread of the pandemic, which may prompt corresponding containment measures that would adversely affect the business environment and the economy at large.
Already, many businesses are presently in dire financial straits as they battle with escalating costs, high receivables, loss of credit lines and other contractual obligations amid revenue shocks.
With new containment efforts that may include the imposition of another lockdown, especially in the commercial nerve of the nation, it might take a longer time for economic recovery to happen.
In its quarterly conference yesterday, LCCI President, Mrs Toki Mabogunje, said the economic fallout of the pandemic, notably disruptions to global supply chains, lockdown, travel restrictions, weakening oil prices, foreign exchange liquidity challenges, and weak export would manifest in the second quarter growth numbers, with more pronounced impact on sectors struggling with growth before this crisis.
“The impact is more pronounced on micro and small enterprises, with inadequate financial buffers to withstand shocks of this magnitude.
“While we acknowledge the efforts by the Federal and State Government, Central Bank of Nigeria and private corporations towards assuaging the impact on the business community, we urge the government to swiftly come to the rescue of some sectors whose business models and earnings projections have substantially been disrupted by the pandemic,” she added.
With the Economic Sustainability Plan (ESP) initiated to ensure that the economy recovers, Mabogunje said the composition of the committee saddled with the ESP largely excluded the organized private sector (OPS), which was not actively represented in drawing up the plan.
“While we see this as a significant omission on the part of the government, we would however advise that the OPS be actively involved in ensuring the implementation as well as in monitoring the progress of the recommended activities going forward.
“We enjoin the government to pursue the implementation of the ESP with utmost commitment and strong political will devoid of sentiments or political affiliations, so that proposed initiatives in the plan can produce the desired outcomes,” she added.
On deregulation of the downstream sector, the Chamber expressed concerns that despite various reviews of the Petroleum Industry Bill (PIB) in the last decade, the bill is yet to be signed into law.
According to the LCCI, the non-passage of the bill has deprived the oil sector and the broader economy of enormous private investment inflows, among other benefits, therefore necessitating calls for an expeditious consideration and passage of the revised bill by the National Assembly.