The Lagos Chamber of Commerce and Industry (LCCI) has disclosed that Micro, Small and Medium Enterprises (MSMEs) in Lagos lost about N2.7 billion in revenue to the lockdown, occasioned by COVID-19 pandemic.
The Director-General of the Chamber, Dr Muda Yusuf, who made the disclosure in the Economic and Business Review for 2020 and Outlook for 2021, ascribed the development to two major disruptions of COVID-19 and the EndSARS protests, experienced by the Lagos business community.
He said the sharp naira exchange rate depreciation coupled with sustained acceleration in domestic prices escalated the cost of production and operating costs for investors in the economy even as revenue was pressured by unfavourable economic conditions.
“Our findings showed that MSMEs with active presence in Lagos lost at least N2.7 billion in revenue to the lockdown.
“The fiscal and monetary authorities as well as the coalition of private sector players provided several relief measures to cushion the impact of the pandemic on the business community. Business activities rebounded modestly in Q3-2020 following the relaxation of various lockdown measures”.
The DG noted however, that the major challenges faced by the business community in the outgoing year included liquidity crisis in the foreign exchange market, sharp exchange rate depreciation, high energy & production cost, ports congestion, cumbersome and burdensome customs processes, insecurity, inconsistent government policies, regulatory uncertainties, land border closure and Apapa traffic gridlock.
Explaining the gloomy outlook for the business environment in 2021 with no quick fixes for the structural issues and the desired regulatory and institutional reforms, the LCCI boss noted that the security situation as well requires new strategic approach.
“It is not clear what new strategies are in the works. Without bold policy pronouncements in this regard, constraints to the ease of doing business including FX shortage, escalating production costs, high regulatory costs, infrastructure inadequacies, and delayed cargo clearance, will persist into year 2021.
“These constraints will be more profound on businesses in the real economy. We believe the sluggish pace of recovery will continue to subdue consumer demand, albeit the impact on earnings performance will be disproportionate across sectors.”