About 153 businesses in Lagos State have lost about N2.677 billion in revenue to the lockdown in five weeks.
A survey report by the Lagos Chamber of Commerce and Industry (LCCI) released yesterday said that sampled business operators lost an average N500,000 each day during the lockdown suggests that each operator lost N17.5 million within the five-week of the lockdown from March 31, to May 3, 2020.
This modest estimation indicates that about N2.7 billion was lost in revenue by sampled businesses of 153 to the lockdown. This translates to trillions of naira losses for thousands of businesses operating in Lagos.
According to the report, majority of the respondents 64 per cent loss of N500, 000 and below daily during the lockdown while 16 per cent indicated a loss of between N 1 million to N2 million, while about 20 per cent of businesses indicated a revenue loss of N2 million and above daily day during the lockdown.
Also, the report showed that selected business operators are weighing different cost-cutting strategies to help minimise losses and stay afloat in the post-pandemic era. Majority of the respondents 63 per cent plans to downsize operations to minimise losses. This is unsurprising as businesses have not generated income over a five weeks period and have lost trillions of naira in profit due to lockdown. This suggests that unemployment rate is expected to increase drastically post-lockdown except government takes urgent steps to support business owners towards surviving and ensuring business continuity.
LCCI stated that recognising the role of business and investment in the economy, it is imperative to have a strategy aimed at enabling businesses navigate through the current storm caused by the pandemic and jumpstarting the economy in general.
The report revealed that business owners requested for palliatives from government, saying that “Some of the palliatives requested by sampled businesses have already been provided for by recent actions of the Central Bank of Nigeria (CBN) and federal government.
It will be recalled that CBN did announce reduction in interest rate on all its facilities and gave a 12-month moratorium. The federal government equally gave three months extension on its loans and social welfare schemes.
However, director-general of LCCI, Muda Yusuf said this finding shows that businesses would need reprieve from both commercial banks as well government agencies that collects one form of tax or levies from businesses, saying that it is critical for financial institutions to offer reprieve to their corporate customers through loan restructuring, either by cutting lending rates or extending repayment period.
Yusuf also said that a national plan of action coordinated collaboratively is critical and urgent; public and private sector must make concerted efforts to protect businesses, jobs and income; government should redesign or develop national policy to protect jobs and income and this must be done in collaboration with private sector operator.
He also added that there should be suspension of the implementation of the new VAT regime rate till year end; and the private sector should develop a platform to harmonise initiatives and actions and the platform should support the government, in policy design, implementation, and evaluation of effectiveness of responses.