COVID-19 lockdown: NECA warns of resulting impact on businesses

Nigeria Employers’ Consultative Association (NECA) has said that the resulting impact of the total lockdown in Lagos, Ogun and FCT can lead to crippled businesses, heightened rate of job loss and increased level of poverty with consequential effect of increased insecurity.

NECA in its weekly bulletin added that massive job losses are inevitable except if the Federal Government undertakes definite measures that will enable the private sector cope with the aftermath of the COVID-19 on the economy,

The association stated that a relaxed lockdown with legislated State and National Guidelines to prevent the spread of the Coronavirus will go a long way in maintaining the gains of the past few weeks. 

“The Guidelines should include compulsory use of sanitizers, free protective gears by Government (face mask, hand gloves (where necessary), maintenance of social distancing, increased education and awareness (posters, etc), total banning of religious, political and social gatherings, a limited number of passengers in public and private transportation and strict enforcement of same, amongst others. It will also be imperative for Government at all levels to be more strategic and transparent in the administration of social welfare and palliatives distribution among the most vulnerable.”

“While the risks of total relaxing too soon, are very real, gradual relaxation could be considered under these stringent pre-conditions as done in Ghana, Germany and some other countries, albeit, with a high sense of alertness.”

Other measures advocated by the association include the government’s direct intervention on direct wage or income support, wage subsidies, tax credits or tax deferrals, short-term work schemes and moratoriums on loan payments.

NECA noted that much had been said and understandably so about the need to safeguard or protect jobs both in the interim and in the long term after the COVID-19 pandemic.

“Employers of labour are not sadists or trigger happy when it comes to making the hard decision to part ways with employees. However hard business decisions as these are seldom unavoidable if the needful is not done. A stitch in time they say saves nine.”

It observed that the long-standing unpleasant environment for doing business in Nigeria had been compounded by the COVID-19 pandemic and the follow-up effect of the unproductive lockdown which understandably was necessary to reign in the blight and protect lives.

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It stated further that although the government had spoken well in urging businesses to continue to bear the brunt without recourse to staff rationalisation, “the truth is that five weeks of the economic and business shutdown has overstretched the limits and businesses are beginning to buckle under the weight of the burden it is carrying without corresponding productivity from workers and necessary support from the government.”

NECA called on the government to strike a balance between the protection of lives and economic survival.

“While protection of life should take precedence, the need to protect the economic foundation of the nation cannot be discounted as the economy will ultimately sustain life. While the government takes decisive steps to protect lives, efforts should also be made to keep productive activities going.

“Without delicately balancing the scale, the consequential negative effects of the pandemic will not only include unimaginable loss of lives, massive job losses and heightened insecurity, it might also lead to unnecessary social revolt,” it said.

It also called on the government to be more decisive in taking and implementing actions needed to stimulate the economy, adding that the announced stimulus, “to a large extent had not addressed the critical needs of businesses that would guarantee sustainability and protection of jobs.

“With a large population of the country in the informal sector and many surviving on daily wages, the continued total lockdown has the tendency to further cripple businesses, hasten the rate of job loss and increase the level of poverty with the consequential effect of increased insecurity.”