OPS Fears Prolonged Protests May Adversely Impact Economy

Muda Yusuf

•Calls for dialogue

Dike Onwuamaeze

Representatives of the organised private sector in the Nigerian economy and some financial experts have expressed concern that the prolonged nationwide protests against police brutality on Nigerian citizens would worsen the country’s economic situation.

They, however, urged the federal government and the protesters to come to the negotiation table to work out acceptable resolutions of the dispute before the showdown degenerates to a total shutdown of the economy, with its attendant deleterious effects.

The Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Muda Yusuf, told THISDAY that the protests were already having a negative impact on businesses and could lead to a shutdown of the economy if not properly managed.

Yusuf said: “We appreciate the need to do things properly in terms of governance and we believe that the protesters have made their points and made them effectively. So, now is time to dialogue with the authorities on the way forward. I plead that they should go to the dialogue table to resolve the issue.

“Luckily the government has shown the willingness to dialogue and has shown some good signals to solving the problems, which the protesters should catch on.”
The Director-General of the Nigeria Employers Consultative Association (NECA), Mr. Timothy Olawale, expressed similar concerns about the implications of the continued protest on socioeconomic activities and urged the government to arrest the situation.
Olawale asked Nigerians to exercise restraints and trust the government’s promise to resolve the situation through extensive reform of the police force.

He said: “Every Nigerian should be concerned because we are likely heading for another shutdown of the economy on account of this protest. Not that the protest is bad in itself, but there is the possibility of it being hijacked by hoodlums. In addition, it will leave the economy with a huge loss of productivity man-hour that will, in turn, lead to loss of business profitability as well.

“However, the larger implication is that it sends the wrong signal of business instability to the international community, which will adversely affect foreign direct investments and even existing investments because we are having a situation where some business chief executives are tinkering with the idea of relocating their businesses to other climes where things are a little stable because there are a lot of instabilities and uncertainties in Nigeria. We just negotiated our way out of labour strike last month. It is like one day, one trouble for the economy. So, we are very concerned.”

Similarly, the Director-General of the National Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Ambassador Ayo Olukanni, told THISDAY: “A prolonged protest would definitely take its toll on the economy and businesses and I am concerned about that.

“But we are also mindful that a safe environment is also a key to economic activities, which is the reason it is important to reform the police. And we hope that the government should start implementing the police reform as quickly as possible.”
For the Chief Executive Officer of Treasure Capital and Trust Limited, Mr. Tom Achoda, the protest has started to undermine the sources of business and public revenues in the country.

Achoda said: “Its impact on government revenue will be a huge negative. The effective blockade of the Lekki toll gate will be a big loss to the Lagos State revenue. Moreover, free flow of economic activities is jeopardised as those living outside Lagos State are afraid to come to the state.

“The Asaba, Delta State end part of the Niger Bridgehead has been blocked and once there are hindrances in the free flow of people and goods from one location in the country to the other, definitely businesses will be affected. How can the government collect taxes from businesses and individuals if there are no economic activities to generate revenues that will ensure business profitability?”

A Senior Lecturer in the Department of Economics, University of Nigeria, Nsukka, Dr. Innocent Ifelunini, told THISDAY in a telephone interview that the protest would aggravate the country’s economy that is already in trouble due to the COVID-19 pandemic.
Ifelunini said people have started avoiding work because they could not predict the dimension of this #EndSARS protest, adding that once there are protests and people could not go to work, the impact will be felt on the GDP.

He said: “Note that it is no longer the youths alone that are protesting because people that have sympathy for their cause are joining the street protest, which has spread across many states in the country.
“Once you have a situation where people do not go to work and we compute productivity of the economy based on what people produce, that will impact on the GDP. It will also impact on the marginal productivity of labour, which may not be profitable to the private sector.
“Besides, paying salaries will mean paying for the inefficiency in the system especially in the public sector.”