The President of the Lagos Chamber of Commerce (LCCI), Mrs. Toki Mabogunje has hinted that about 83% of business owners in the country are planning to reduce workers’ salaries, downsize workforce or adopt both cost-cutting measures to sustain their operations.
Mabogunje, who disclosed this during the quarterly media briefing on the state of the nation’s economy yesterday, said businesses were seeking adequate stimulus and intervention from government to preserve investments and save jobs.
She said the findings from a recently conducted survey on the impact of COVID-19 showed that demand for goods had reduced significantly with revenue severely affected.
The LCCI President said: “Also, findings revealed that more than half of business owners representing 54percent want banks to reduce interest rate and give moratorium on loans; 29percent want reduction in tax liabilities, while 17percent want waivers on import duties and demurrages.”
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She stressed the need for policymakers and the organized private sector to come together to rescue the economy from collapse.
Amongst other options to offer succour to the businesses, she recommended a year tax break for healthcare and pharmaceutical companies, airlines, manufacturers, agro-processors, SMEs and hospitality players; and temporary suspension of 50% increase in VAT rate till year end.
She also suggested that Pay As You Earn (PAYE) should be suspended for the next six months as it would help boost the purchasing power and aggregate demand, thereby stimulating the economy.
To support food security and agricultural supplies, she said that the Agro-processing companies should enjoy import waivers for the next one year while she implored commercial banks to offer reprieve to businesses and corporates indebted to them.
“The reprieve could be in form of loan moratorium and restructuring. We urge the Central Bank of Nigeria (CBN) to review the cash reserve ratio downwards to 20percent from the current 27.5percent, to enable commercial banks have more liquidity to support businesses,” she said.
Mabogunje further recommended full implementation of the Executive Order on Removal of VAT from Air Transportation.
The LCCI President also urged government to focus on the completion of critical infrastructure projects nationwide such as the Lagos-Ibadan expressway, Lagos-Ibadan rail project, Enugu Airport, the Second Niger Bridge and the East-West Road, among others as well as an upgrade of power and broadband infrastructure across the country in order to support ICT and digital economy.