How to stimulate COVID-19 ravaged economy

In Nigeria, where more than 700 people have been knocked down by COVID-19, government would not hesitate but toe the line of governments of the world in the campaign against the novel virus. As at 30th March, 2020 when government gave the initial lockdown order, Nigeria had only 131 cases in 12 states. Now, the […]

In Nigeria, where more than 700 people have been knocked down by COVID-19, government would not hesitate but toe the line of governments of the world in the campaign against the novel virus. As at 30th March, 2020 when government gave the initial lockdown order, Nigeria had only 131 cases in 12 states.

Now, the country bleeds. There are many reported instances of violation of the lockdown order. Some persons have lost their lives in face-off with those enforcing the presidential directive.

For this reason, it becomes imperative for government to think twice as it girds its loins to keep Nigerians away from the streets.

We are all aware that Nigeria has a very informal system where many live on their daily earnings. Keeping people at home for a long stretch of time will lead to huge reactions. It is truly heart-warming that government has palliative measures for artisans, day-workers, manual workers and traders.

Yes, it a very reasonable thing to do in the circumstance. In fact, the United States has given its citizens $1,200 per family in the face of the lockdown.

But this is not enough because many more who work in the formal/semi-formal organisations are under threat.

Their employers are considering pay cut or layoffs. This will definitely put many families in anguish and make enforcement of measures against COVID-19 really hard.

Their reason(s) is quite sensible. The employers say they pay wages from profit they make in their businesses. Now that everything is shut down, where can they get money to pay? Apart from businesses being closed, they are owed huge debts, by even government.

These private companies are main employers of the about 200 million Nigerian population. Lest we forget, a single employee in Nigeria, apart from his/her immediate family members, often has dependents – an average of five persons to directly cater for. These are workers that are being laid off today as a result of the lockdown.

In December 2019, 600 government contractors were verified to be paid but due to bureaucratic matters, they were not paid. The minister of Finance, Mrs Zainab Ahmed, directed the Accountant-General of the Federation (AGF) to warehouse the money. We are of the opinion that if such money was paid, the economy would have gotten the much needed impetus.

Now, let us look at this scenario. If each of the 600 companies has 10 workers on the payroll and was paid last December, the multiplier effect would have been huge because 600 companies by 10 employees is equal to 6,000 employees. When 6,000 employees are multiplied by five dependents, we have 30,000 dependents benefiting. The above, therefore, underscores the need for government to offset debts it owes contractors in this time of emergency.

Helping Nigerian contractors/entrepreneurs is one of the best things to do now.

In the light of the current situation, government should expeditiously verify more contractors and promptly pay them. Government should bring up life-saving packages and incentives like tax relief, reduction in interest rate to single digit, loans granted small scale entrepreneurs should be cancelled while big business concerns be made to enjoy extended moratorium on their debts if the debts are not to be cancelled.

May I suggest that the ministers of Industry, Trade and Investment; Communication and Digital Economy; Science and Tech; Transportation; Aviation; Interior; Health; Works and Housing; Labour and Employment; and Education, working under the Presidential Directive to jointly develop a comprehensive policy for Nigerian economy functioning with COVID-19 consider the points raised in this write up in their work.

By this, government will be injecting life into the economy. Lockdown is necessary, considering that the coronavirus menacingly hovers over our heads but we must not forget, this pandemic will finally go away so we must look ahead. We should not lose everything to COVID-19. It is not the end of the world.

 

Gabis Attah wrote from Abuja.