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The recent warning by Vice President Yemi Osinbajo-led Committee on Economic Sustainability Plan that about 39.4 million people may lose their jobs by the end of 2020, if the government fails to take preemptive measures, is timely. However, the panel’s revelation that some Nigerians may fall into extreme poverty before the coronavirus pandemic ends, as Gross Domestic Product (GDP) slides to between minus 4.40 per cent and minus 8.91 per cent, is disturbing. The panel has observed that the mandatory lockdowns and social distancing measures following the outbreak of coronavirus have had negative impact on farms, factories, trade, transport and tourism.
According to the panel, several projections, including those done by the National Bureau of Statistics (NBS) showed severe downturn in the nation’s oil earnings, as a result of which, even with oil price at $30 a barrel, the country would still have a shortfall of about N185 billion every month, in the amount available for allocation to the three tiers of government.
No doubt, the panel’s report is a reflection of the prevailing economic realities. Considering the serious economic impact of the ravaging pandemic, it is likely that many more people will experience job losses, than government envisaged.
A recent report of COVID-19 impact monitoring survey released by the National Bureau of Statistics (NBS) indicated that the impacts of the pandemic on employment and income of Nigerians have been widespread. It revealed high job losses as both individuals and firms face challenges due to the snowballing effects of the pandemic. Out of the 1,950 households surveyed on a nationally representative sample, 42 per cent of the respondents who were working before the outbreak of the pandemic had lost their jobs by early June. It also showed that a high rate of households reported income loss since mid-March 2020, with 79 per cent posting decreased income.
All countries, including the advanced ones, are also affected by the effects of the pandemic. An International Labour Organisation (ILO) survey showed that as a result of the economic crisis created by the pandemic, almost 1.6 billion informal economy workers (representing the most vulnerable in the labour market), out of a worldwide total of two billion and a global workforce of 3.3 billion, have suffered massive damage to their capacity to earn a living. ILO attributed the trend to lockdown and other restrictive measures in various countries.
The Micro, Small and Medium Enterprises (MSMEs) operators are among the worst hit, with some of them closing shops and their employees automatically losing their jobs. In this category are the hospitality, banking, construction, manufacturing, media, sales and services sectors. The National Vice President, North Central of the National Association of Small and Medium Enterprises, (NASME), Auwal Bununu Ibrahim, projected that so far, about 50,000 workers have been disengaged in the MSMEs sub-sector, with over 10,000, MSMEs going under.
It is worth pointing out that we should learn to live with the ‘new normal,’ which may not go out soon. Therefore, the government must ensure that the situation is put under control. This entails looking inwards and finding solutions to the prevailing problems. Government must prioritise initiatives to reduce extreme poverty. It should refloat the economy and ensure the security of existing jobs. Beyond the stimulus and palliative measures already in place, the government needs to do more. We strongly believe that this is the right time to diversify the economy and create more jobs for growing army of unemployed Nigerians. We note that not much has been done in the direction of mechanised agriculture and harnessing its inherent potential. Government hasten the moves to exploit the nation’s abundant solid minerals, currently being stolen by illegal miners. The COVID-19 pandemic has shown that we can no longer continue to depend on oil, which has proven to be unsustainable. We say this bearing in mind that no economy can depend on one product and still survive.
Government should think of extending bailouts to deserving sectors to prevent the impending massive job losses. We advise that tax rebates and moratorium be granted to indigenous companies. The ease of doing business in the country should be further improved by dismantling the administrative bottlenecks working against the growth of small and medium scale enterprises.
The Osinbajo-led committee report is a wake-up call on the government to drastically reduce the cost of governance and plough back the savings to the productive sector of the economy. It should no longer be business as usual. Government should cultivate the habit of saving for the rainy day. We commend the panel for its timely alarm and urge the government to put adequate measures in place to remedy the situation.
