Protests might push Nigeria into recession

By Tunde Shorunke

Industry experts in different sectors of Nigeria’s economy are lamenting the adverse effects of the #EndSars protest which they fear might fuel recession beyond the limit.

Economists also pointed out that the federal government should ensure the security of lives and property to restore normalcy in other to regain local and foreign investors’ confidence.

Industrialists emphasized that business activities were greatly impacted, asking for frank dialogue among protesters and the federal government to enhance normalcy.

Following an enquiry by The Daily Times, a financial engineer and Chief Executive Officer of Wyoming Capital & Partners, Tajudeen Olayinka, reacted to the over N700 billion estimated by Lagos Chamber of Commerce and Industry’s (LCCI) to have been lost by Nigeria in the past few days of the #EndSars protest.

He pointed out that the N700 billion could just be the minimum estimate as of now in view of the continuing violence and looting of some enterprises which will lead to a huge amount of their capital lost.

He explained that LCCI figures were estimates from regular economic activities of its members that must have been hindered.

He further opined that the loss was huge across the board and could further drag the looming recession beyond affordable limit.

His words: “The best approach to the current unrest in Nigeria is for the government to engage in things that are capable of bringing back peace across the country so that businesses can come back quickly to pick up on their activities.

We should understand that LCCI figures came from estimates from regular economic activities of their members that must have been hindered by disruptions from genuine protests across the country.

“If we factor the impact of looting that accompanied the protests, the N700 billion could just be the minimum estimate as of now because some enterprises must have lost a huge amount of their capital as a result, requiring immediate recapitalization or cessation of business.

This is a difficult time for entrepreneurs. I can tell you that the loss is huge across board, and could further drag the looming recession beyond an affordable limit. We cannot afford needless disruption at this time.

“Government may have to provide assistance to those enterprises that lost a huge part of their capital to the looting that accompanied the protests, as some may find it extremely difficult to come back again.

Where many are affected, that is a major hindrance to economic growth. “The businesses must learn from this bitter experience, by insuring their key assets.

I know that many insurance companies do not like to accept risks that are related to mass actions or civil unrest; that becomes additional burdens for businesses.

“The critical thing for businesses that suffered so much to looting is recapitalization.

And that’s why the government may have to step in to provide possible assistance.”

Also, reacting to The Daily Times enquiry, a former Chief Economist/ Group Head, Research & Economic Intelligence Group at Zenith Bank Plc, Dr. Marcel Okeke, pointed out that the terrible impacts of the pandemic are now worsened by the #EndSars protest, adding that government should restore normalcy, to enhance local and foreign investors confidence for economic activities to pick up.

“Covid-19 is not totally over. We are still with the pandemic and its devastating effect on the economy.

“But this terrible impact of the pandemic is worsened by the #EndSars protest, and its heightened insecurity effect.

The first and foremost thing the government must do is to ensure the security of life and property.

People must be alive and safe, for the economy to run.

No one can engage in any meaningful activity without security guaranteed.

“So, once the government gets security right, confidence will be restored in both local and foreign investors; and economic activities can begin to pick up.

At the moment, the level of insecurity remains high in the land,” he stressed. In a statement made available to The Daily Times, the National President of Nigerian Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Hajiya Saratu Iya Aliyu, urged calm and frank dialogue to end the protests, noting that business operations have been greatly impacted.

“NACCIMA is calling for calm, and dialogue for an immediate end to an orgy of violence, killings, looting and wanton destruction of properties we are now witnessing.

The objective now should be to de-escalate the crisis being witnessed, which started with what is now known as the #EndSARS protests by the youth.

Unfortunately, a hitherto peaceful, legitimate protest has been hijacked by thugs and miscreants, resulting in an attack on businesses, destruction of government properties, burning of police stations and correctional centres to free prisoners.

“Let me express the condolences of our association to the immediate and extended families of all those who have lost dear ones in the violence being witnessed across the nation.

This is indeed disheartening. We recognize the right of citizens to peaceful legitimate protests, but we condemn and are totally against the wanton destruction of properties and looting by hoodlums who have hijacked the peaceful protests.

We cannot sit by and allow the looting and other criminal acts by hoodlums to go on unchecked. We must work with others to put an end to the violence and lawlessness we are now witnessing.

“We are equally concerned about the deployment of military forces to confront the protesters which resulted in unsavoury consequences as witnessed especially at Lekki Toll area in Lagos recently.

We are therefore calling for an end to the involvement of the military in the current situation.

The impact of the crisis and wanton destruction of property as being witnessed is clear for all to see.

Billions have been lost in arson and looting going on. “Business operations have also been seriously impacted.

NACCIMA’s efforts as a National Chamber, to help project our country as a favourable and investment-friendly destination to our Business partners abroad, and other Foreign investors over the years is now suffering a serious setback.

At a period we are still struggling with the negative impact of COVID-19 on our economy and working on economic recovery, we must not, by acts of commission or omission, aggravate our economic situation.

“We must therefore step back and work together to end this violent crisis.

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Towards this end, we are calling for frank Dialogue between the leaders of the protesting youth and various arms of government at all levels; including State and Federal governments to douse the tension.

The prompt agreement on the initial 5-point demands of the Protesting Youth including the disbandment of SARS is a reflection of possibilities of what can be achieved through peaceful and meaning Dialogue on the various contending issues.

“I am therefore using this opportunity to call on Chamber members across the country to reach out to influential opinion leaders and other stakeholders in their respective states to make contacts with such leaders and initiate moves that can take help curb the violence for an end to the crisis.

“As a National Chamber, we cannot and should not stand by and watch the current crisis spiral out of control and result in anarchy and lawlessness.

We have the patriotic duty to join other stakeholders for an end to the crisis, not just because of our businesses, but because of our nation at this historic junction and for the sake of posterity,” the statement added.