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Market Digest Nigeria

Economy

74.2% Businesses Stop Operations Due to COVID-19 – NECA

Covid-19 stopped 74.2% Of Businesses From Operating- NECA

The Nigeria Employers’ Consultative Association has said the COVID-19 pandemic stopped about 74.2 per cent of enterprises’ operations in Nigeria.

Covid-19 stopped 74.2% Of Businesses From Operating- NECA

The acting President of NECA, Mr Taiwo Adeniyi, said this at a press briefing held on Thursday to announce the results of a survey the association conducted to gauge the specific impacts of COVID-19 on businesses.

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

“Over 90 per cent of surveyed enterprises noted that limited cash flow was an impediment to operations and over 90 per cent stated that demand for their goods and services had significantly reduced.”

The survey also showed that 78.2 per cent of enterprises had supply challenges as suppliers were unable to fulfil orders, according to Adeniyi.

He commended the government for efforts to curtail the spread of the virus and for the introduction of fiscal and monetary measures to ameliorate the impact on businesses.

He, however, expressed the association’s concern that organised businesses were left to weather the challenges alone.

He voiced his expectation that the job retention scheme as proposed by the association would have been given due consideration to curtail the rising unemployment rate during the pandemic period.

Adeniyi again advised the government to take a look at a long-term strategic support for organised businesses to enable an accelerated and sustained economic recovery.

As regards the crashing crude oil prices, NECA also suggested the passage of a legislative bill that would address the gaps in the petroleum industry.

“Privatisation of the existing three refineries would further free the economy of billions of naira spent on annual turn around maintenance of a facility that could not run up to 30 per cent capacity and generating less than 15 per cent of its expected revenue annually,” Adeniyi said.

He also reiterated the importance of the implementation of the Oronsaye Report to the institutionalisation of operational efficiency and reduction of expenditure in the long term.

He suggested that the government should deliberately reduce other leakages arising from the over-bloated retinue of aids of political officers and expenditure profile with no direct national development impact.

Adeniyi also expressed concern about the heavy cost the deficit in transport and power infrastructure had brought to the economy.

He added, “Congestion due to poor port and associated transport infrastructure created losses of N3.5trn last year at Nigeria’s maritime logistic hubs, according to a March 2019 report by a research group, African Centre for Supply Chain.

“These losses are set to increase as the population expands and economic growth continues.”

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