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West Africa

Fresh lockdown may hurt economy’

• Govt in dilemma over rising COVID-19 cases

With the growing cases of COVID-19 despite weeks of lockdowns, federal and state authorities may have to choose between tightening restraints and hopefully saving lives or crashing the economy, which ironically sustains life.

A week after the Federal Government relaxed the lockdown in the Federal Capital Territory (FCT), Lagos and Ogun States, figures of the pandemic as at Saturday, May 9, 2020 were 4151 (total confirmed), 745 (discharged) and 128 (deaths).

As at Thursday, April 9, 2020, a month ago, the Centre for Disease Control (NCDC) posted the figures: 288 (confirmed cases), 51 (discharged) and seven (deaths).

Lagos State Governor Babajide Sanwo-Olu had taken to Twitter on Saturday, warning that his administration might review restrictions on account of what he described as the “determination” of some Lagos residents to “flout the rules”.

He said: “As citizens, we have a great burden upon us to behave responsibly. These times demand a lot from us in terms of actions and behaviours that may not be comfortable. It is difficult to adjust to the changes, but adjust, we must.

“As a government elected to uphold the security of its citizens, which includes health security, we will not hesitate to review the terms of the eased lockdown if we do not see an improvement in adherence to our public health guidelines over the next couple of days.

Despite massive advocacy, it is disappointing to see the crowd at banks and markets across the state flouting the guidelines. We will be forced to take the painful decision of bringing the state under lockdown if it remains clear that Lagosians are determined to flout the rules.”

But can states risk further lockdown and its attendant notoriety for damaging the economy? Many employers have already begun cutting down salaries and downsizing their workforce. Also, disposable income in many homes has dropped drastically, making another lockdown a security and economic time bomb.

In the wake of the lockdown, the federal and state governments had announced plans to distribute food, to ensure people stayed indoors. The poor sharing method, however, led many unhappy citizens to defy the restriction, as they searched for means to survive.

The Lagos State government said it provided “food stimulus packages” to 250,000 people and cash transfers to another 250,000, out of the city’s 22 million residents. The Federal Government claimed it provided support to the poorest 3.6 million people in payments of up to N20,000 a month. With over 82 million Nigerians living below the poverty level, however, the handouts were a mere trickle.

The truth is that five weeks of economic and business shutdown has overstretched the limits. Businesses are beginning to buckle under the weight of the burden without a corresponding productivity from workers and necessary support from government,” said Dr Timothy Olawale.

The Director-General of Nigeria Employers’ Consultative Association (NECA), Olawale said: “This is the reality today. Balancing the protection of lives with economic interests should ordinarily not be difficult. While protection of life should take precedence, the need to protect the economic foundation of the nation cannot be discounted, as the economy will ultimately sustain life.

“While the government takes decisive steps to protect lives, efforts should also be made to keep productive activities going. Without delicately balancing the scale, the consequential negative effects of the pandemic will not only include unimaginable loss of lives, massive job losses and heightened insecurity. It might also lead to unnecessary social revolt.”

The NECA boss noted: “While a lot has been said on the intervention of the Federal Government and various coordinated efforts of other stakeholders, more decisive action on stimulus to businesses need to be taken. The announced stimulus, to a large extent, has not addressed the critical needs of businesses that will guarantee sustainability and protection of jobs.

He added: “Much more can still be done now, not belatedly, to save jobs in Nigeria. More direct intervention such as direct wage or income support, wage subsidies, tax credits or tax deferrals, short-term work schemes, moratoriums on loan payments and the establishment of a coronavirus Job Retention Scheme, where government pays up to 60 per cent of private sector salaries until June, as long as workers are not laid off, as done in other climes i.e. U.K., France, and Denmark, etc.”

President of the Lagos State Chamber of Commerce and Industry (LCCI) Mrs. Toki Mabogunje said the palliatives were poorly articulated and failed to adequately capture the significant fraction of low-income households who rely on daily pay for livelihood.

“For example, the social register did not cover up to five per cent of about 87 million Nigerian households living below the poverty line. The inability of most low-income households to benefit from these palliatives mean higher poverty incidence as businesses suffer collapse from the lockdown.

“Although government rolled out a raft of relief measures to support businesses, we observe that these packages are tilted more towards formal establishments while micro and small-scale enterprises as well as informal businesses have been largely left out.”

Meanwhile, the National Bureau of Statistics (NBS) had in its latest report last week maintained that 82.9 million Nigerians are poor by national standards.

It said the figure shows that 40.1 per cent of the total population is classified as poor, meaning that an average four out of 10 individuals in Nigeria have real per capita expenditures below N137,430 per year. This also means monthly income of an individual in this category is less than N11,500 while income per day is N38

The report indicates that Sokoto, Taraba, Jigawa, Ebonyi, Zamfara, Yobe and Adamawa top the poorest states in the country.

The NBS said Sokoto State has 87.73 per cent poverty head count rate followed by Taraba with 87.73 per cent, then Jigawa, which has 87.02 per cent and Ebonyi, 79.76 per cent.

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