MSMEs lose N2.7bn revenue to COVID-19 lockdowns, #EndSARS protests: LCCI

*Major challenges faced by the business community in 2020 include liquidity crisis in Forex market, sharp exchange rate depreciation, high energy and production costs, ports congestion, cumbersome and burdensome Customs processes, insecurity, and inconsistent government policies among others ─ Dr. Muda Yusuf, Director-General of Lagos Chamber of Commerce and Industry

*As importers, manufacturers lament 500,000 containers trapped at Lagos Tin Can Port

Isola Moses | ConsumerConnect

In reviewing the economic and business outlook for 2020 and the New Year, the Lagos Chamber of Commerce and Industry (LCCI) has said the Micro, Small and Medium Enterprises (MSMEs) in Lagos State of Nigeria lost about N2.7 billion in revenue to the lockdowns occasioned by the novel Coronavirus (COVID-19) pandemic.

Dr. Muda Yusuf, Director-General of LCCI, who made the  disclosure  in the Economic and Business Review for 2020 and Outlook for 2021, attributed the negative development to two major disruptions of COVID-19 and #EndSARS protests, experienced by the Lagos business  community, The Sun report 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, stated Yusuf.

He said: “Our findings showed that MSMEs with active presence in Lagos lost at least N2.7 billion in revenue to the lockdowns.

“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 LLC Chief, however, observed 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 and production cost.

Others, according to him, include ports congestion, cumbersome and burdensome customs processes, insecurity, inconsistent government policies, regulatory uncertainties, land border closure and Apapa traffic gridlock.

On the gloomy outlook for the business environment in 2021 with no quick fixes for the structural issues and the desired regulatory and institutional reforms, he stated that the security situation as well requires new strategic approach.

Yusuf noted: “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.”

In a related development, as the Apapa (in Lagos) gridlock continues to worsen by the day, importers and manufacturers have lamented estimated 500,000 containers laden with raw materials meant for Christmas sales and production are currently trapped at the Tin Can Island Port.

They decried the situation in which 44 vessels are also trapped at the Lagos anchorage area where they could not berth due to congestion at the ports in spite of the Federal Government’s renewed efforts at decongesting the port access road.

It was learnt that the perennial gridlock on the port access road had raised the cost of haulage.

According to importers and manufacturers, moving trucks moving containers from Tin Can Port to Ladipo (in Lagos State) costs about N1.5 million, while those going to Alaba International and Computer Village, in Ikeja, collect between N1.6 million and N1.8 million.

Several other importers who brought in goods to sell at Christmas season have been caught in the traffic jam menace as their commodities have been unable to leave the port, and are now at the risk of losing millions of Naira should they fail to sell the goods in the holiday season.

Meanwhile, as part of measure to clear the gridlock at the Tin Can and Apapa ports, Rt. Hon. Rotimi Amaechi, Honourable Minister for Transportation, has said that 200 security officers would be deployed to the route.

Taiye Elebiyo-Edeni, Minister’s Media Assistant, in a statement noted the maritime workers’ union had threatened to go on strike if the government failed to address the gridlock on the route.

Amaechi, who addressed stakeholders and the Maritime Workers Union of Nigeria (MWUN) in Lagos, recently stated that part of the duties of the security officers is to ensure trucks do not park on the roads.