COVID-19: 74.2% of businesses have stopped operating, NECA raises alarm

Nigeria Employers’ Consultative Association, NECA, has raised the alarm that 74.2 percent of businesses have stopped operation due to COVID-19 pandemic in Nigeria.

At a briefing in Lagos, weekend, Acting President of NECA, Taiwo Adeniyi, informed that 15.8 percent of businesses were either fully on site or teleworking.

While commending the Federal Government’s efforts through various stimulus packages to aid small and medium scale enterprises, SMES, the umbrella body of employers in the country lamented that organised businesses were basically left in the lurch to weather the challenges of COVID19 pandemic alone.

At the post-Governing Council briefing, NECA had also said there was a need for the Federal Government to execute the Oronsaye Report and reduce/merge MDAs to reduce cost.

 

According to Mr. Adeniyi, “with the view of gauging the specific impact of COVID-19 on businesses to aid our advocacy efforts, we conducted research into the effects of the pandemic on businesses.

“The outcome of the research showed, among others, that 74.2% of surveyed enterprises have stopped operating due to COVID-19, while 15.8% are either fully on site or teleworking.

“Over 90% of surveyed enterprises noted that limited cash-flow was an impediment to operations and over 90% stated that demand for their goods and services had significantly reduced. The disruption of supply chains resulted in 78.2% of enterprises having supply challenges, as suppliers were unable to fulfill orders.

NECA’s President said the body commended “government at all levels for the efforts so far made to curtail the spread of the virus in Nigeria. The many guidelines and protocols initiated by the Presidential Task Force were needful, though sometimes late and hardly enforced.

“We note the political will that necessitated the imposition of significant restrictions in the movement of persons and goods practically all over the country, especially in Lagos, Ogun, and the Federal Capital Territory and the varying degrees of restrictions on the movement of persons and goods, including public gatherings and markets within states.

“The effects of the various restrictions on businesses prompted the Federal Government to introduce fiscal and monetary measures to ameliorate the impact on businesses and save the economy from further collapse.

“Worthy of commendation is the CBN’s N50 billion credit facility to households, and Small and Medium Enterprises most affected by the pandemic, as well as N100 billion loan to the health sector, and N1 trillion to the manufacturing sector.

“In addition, the interest rates on all CBN interventions programmes were revised downwards from 9% to 5%, and a one-year moratorium was introduced, effective March 1.

“While we commend these efforts, we wish to state with concern that organised businesses were basically left in the lurch to weather the challenges alone.

“With many businesses closed down and many others on the verge of bankruptcy, we had urged government to give attention and support to businesses to ensure their survival and competitiveness.

“With unemployment rate soaring high pre-COVID-19 and reaching an alarming rate during the pandemic period, it was expected that necessary job retention scheme, as proposed by our Association, would be given adequate consideration; this was never the case.

“As full economic activities are on the brink, we, once again, urge government to take a second look at long term strategic support for organised businesses to enable an accelerated and sustained economic recovery.”