With a loss in the gross domestic product (GDP) estimated to hit N10 trillion, there are fears that small and medium enterprises (SMEs) may be the worst hit; BENJAMIN UMUTEME reports.
When Nigeria recorded its first index case in late February, many felt the pandemic which has left many parts of Europe and American reeling would ‘quickly pass away,’ but several weeks down the line, the country is still looking for the best way to curb the rising number of people that have contracted the virus.
The first confirmed case of the coronavirus pandemic in 2019 in Nigeria was announced on February 27, 2020, when an Italian citizen in Lagos tested positive for the virus, caused by SARS-CoV-2. On March 9, 2020, a second case of the virus was reported in Ewekoro, Ogun state, a Nigerian who had contact with the Italian.
On March 17, Nigeria confirmed the third case in Lagos State, A 30-year-old Nigerian female citizen that returned on 13 March from the United Kingdom.
March 18, and Nigeria confirmed five new cases of the virus – four of the new cases were discovered in Lagos state, while one was discovered in Ekiti state.
On March 19, Nigeria confirmed four new cases of the virus in Lagos state… the federal government also announced that the Italian citizen who brought coronavirus to Nigeria has tested negative and was discharged the following day.
Enter March 21, and the federal government confirmed ten new cases – seven in Lagos state, and three in the FCT.
Fast forward to April 14, and what do you have? The National Centre for Disease Control again confirmed thirty new cases 25 in Lagos state, two in the FCT, one in Kano state, one in Akwa Ibom, and one in Edo state.
The lockdown
In order to stem the rate at which people were contracting the virus, President Muhmmadu Buhari, on the advice of the Presidential Task Force on Covid-19, imposed a two-week lockdown on the FCT, Lagos, and Ogun in late March. Announcing the lockdown, those on essential services were exempted including food.
Despite the lockdown, figures of fatalities have continued to rise. The two weeks lockdown has left millions of Nigerians who work in the informal sector affected as they have been unable to ‘make money.’
For financial analyst, Johnson Chukwu, apart from the telecommunications sector that is booming because of data usage, virtually all other sectors of the economy have suffered severe losses. He also said with the lockdown, the economic impact will be unimaginable.
For other sectors of the economy, the first two weeks of the lockdown left many of them in the edge financially. From aviation to shipping, education to entertainment, financial services, sport and hospitality, it has been a sorry tale as business has been very low key for some while others have virtually not conducted one for the past two weeks.
A hotelier, Mr. Olubunmi Ayoola, said since the lockdown was announced, their outlets have been experiencing very low patronage. Ayoola said people who usually lodged in his hotel for business trips had not been coming due to the closure of borders.
He said many of his staff were asked to stay at home, while a few were retained to attend to visitors who checked into the hotel before the lockdown.
“I don’t want to owe my staff salaries and that was why I asked about 90 per cent of them to go home while I retained few of them to attend to the few customers we have. After the lockdown, if sales pick up, I might recall them,” he said.
Small businesses groan
The Abuja property business which is a booming industry has almost been left comatose as business has ground to a halt.
An estate agent in Jikwoyi, Prince Charles, said before the lockdown people had stopped doing businesses. According to him, some potential customers anticipated there will be a lockdown so stopped all business transaction.
He said, “Before the lockdown announcement, many of them had predicted it so a week before the President actually announced it, business has slowed down. And now it has practically stopped. With this additional two weeks we are in for a hard time especially with nothing coming into the pocket.”
Mrs. Funmilola Olukoga-Adu, who runs a confectionery business from her home in the Arepo area of Ogun state, said before the lockdown, she used to bake up to 20 cakes for clients per week, aside from other confectionery products.
According to her, “However, I could do only five this week.”
The entrepreneur said even though she was getting orders from clients outside her location, her major challenge was delivering the products to them.
She said, “The advantage of working from home has helped. I do my job from my kitchen and I still get orders. The major issue I have is in terms of product delivery due to the lockdown.
“But within my community in Arepo, Ogun State, I have been making confectionery products, which my clients come to pick up. It’s unfortunate I can’t deliver outside my location due to coronavirus fears and logistics problem.”
Nevertheless, the entrepreneur said she had added more staple products like bread to her product line.
“I now bake bread and through this idea, I’ve been able to get more clients within my area who need bread during this lockdown. Many of them are not comfortable going to stores to buy bread; they prefer to come to a less rowdy place like a home to get it,” she said further.
Even a provision shop owner in Jikwoyi, a suburb of the federal capital territory, who simply identified himself as Chijioke, told Blueprint Weekend that the past two weeks have been discouraging.
According to him, it has been difficult to do real business because people are not too keen to spend on provision as they try to conserve the cash they have.
“Mine is even better as people still come in trickle to patronise me, but my neighbour who sells bags has not opened his shop in the last two weeks,” he said.
The director-general of the Lagos Chambers of Commerce and Industry (LCCI), Muda Yusuf, said “Nigeria’s economy has been largely crippled.”
“That is why I say that a major contraction has taken place in this economy. The country’s GDP loss would be in the excess of N10 trillion.”
e said further that “even beyond that after the lockdown, there is still going to be a lag effect that will take the country another between six and nine months to recover from the shock of this crisis.”
He also said small businesses would feel the shock most as many of them do not have the financial muscle to withstand the shock ocassioned by the lockdown.
“The informal sector operators don’t have the ability to absorb shock. They don’t have the shock absorber to stay off work for a long period. If you get them off work for one or two days they will begin to gasp for breath.”
This is just as the LCCI DG said “micro-enterprises are suffering the worst part of this economic burden because they never had the reserve to carry through economic inactivity and unfortunately, that has been extended by two weeks.”
