“The lockdown has been a very difficult one as everybody can attest to. Businesses are on complete lockdown, just as citizens. Even sectors that were exempted are even not finding it easy, as they can neither move around nor carry out bank transactions, neither can their workers show up in the office.”
These were the concerns of the Director General, Lagos State Chamber of Commerce and Industry, Dr. Muda Yusuf, who asserted that Nigeria’s economy was suffocating due to the coronavirus-induced lockdown in parts of the country.
Even while decrying the economic situation in the country, he argued that the challenges present the country with an opportunity to attract Foreign Direct Investment by liberalising its Foreign Exchange market.
According to Yusuf, with some states on lockdown, the dire consequences are apparent as the economy has practically stagnated.
“Practically, everywhere has been shut down and it has been very tough across all sectors, except perhaps the rural areas where people can still go to farm. But as for the heart of the economy itself, nothing is happening. What we have seen has been the social fallout or social consequences of the lockdown, which is almost degenerating to a security problem,” he said.
Speaking on the impact of the pandemic on businesses, the DG described as profound the macroeconomic impact in national output and productivity.
He said, “We can categorise the impact into three, which is the impact of the lockdown with practically nothing happening with businesses as the economy is practically at a standstill with cost running high in some places and no revenue coming in.
“Then, there is the macroeconomic effect which is the most profound of all of these challenges, and that is the impact of this condition on the macroeconomic environment. Looking at critical indicators such as our reserves and our exchange rate. There is a major contraction already.
“Although we haven’t seen the number, we can see that the economy is already contracting. Think about depression, think about recession. There is the supply disruption aspect of it. Quite a number of businesses rely on imported raw materials; even before the lockdown, we were already experiencing difficulties with the supply chain.”
Arguing that the FOREX liquidity challenge would be the consequence of declining petro-dollar revenues and uncertainty, even as oil prices continue to dip in the international market, the economist charged the government to work with an economic management model of zero revenue from oil that will see the country adopt a non-oil based model for growing the economy.