COVID-19: Nigeria businesses explore measures to reduce impact

The organised private sector in Nigeria is exploring measures to reduce the impact of the global crisis occasioned by the outbreak of the coronavirus on Nigeria’s struggling economy.

Already, the price of crude oil, which is the mainstay of the country’s economy, is trading below federal government’s benchmark for this year’s budget, even as the government explores several options to hedge the effect.

Similarly, Nigeria’s latest Excess Crude Account balance, according to a statement from the Office of Accountant General of the Federation, was put at $71.81m, while movement in reserves showed that the country’s reserves stood at $35.94 billion at the weekend, down by $2.59billion from $38.53 billion in which it opened the year.

Already, the outbreak is estimated to be costing the shipping industry $350million weekly in lost revenues, according to the International Chamber of Shipping (ICS). ICS estimates that over 350,000 boxes have been removed from global trade as a result of the pandemic.

Having built inventory over time, Nigerian manufacturers are beginning to get worried about access to critical raw materials needed to sustain their operations.

Reacting, the Director General of the Lagos Chamber of Commerce and Industry, Dr. Muda Yusuf, explained that many manufacturers and service providers in the country are already experiencing acute shortage of raw materials and intermediate inputs. This has implications for capacity utilisation, employment generation and retention and adequacy of products’ supply to the domestic market,” he said.

Also reacting, President of Phones and Allied Dealers Products Association (PAPDAN), Ifeanyi Akubue, said coronavirus impact is huge on the Nigerian market, as major Original Equipment Manufacturers (OEMs)supplying this market are based in China, and have not supplied since the outbreak of the virus.

“I can confirm to you that over $100 million worth of goods are currently stuck in China. Most of the OEMs have stopped production. Ours stocks are currently depleting. It is a sad situation. The world is confused. We can only pray and take caution,” he stated.

Speaking more on the impact on the local market, the President of Computer and Allied Products Dealers Association of Nigeria (CAPDAN), Adeniyi Ojikutu, said if the situation persists, prices of products would definitely rise.

According to him, the situation has become worrisome, “because both goods and people are stuck in China. The COVID-19 must be tackled as fast as possible before it crumbles both businesses and humans.”

Secretary, Foreign Trade and Investment Committee, Automobile Spare Parts and Machinery Dealers Association (ASPAMDA), Leo Okoye, said the effect of COVID-19 is devastating to our markets.

According to Okoye, being an international market that we operate in, the outbreak of the virus has affected our business drastically, as foreigners are no more coming in for business.

He said the virus has caused hikes in the sales of autoparts, as some of the parts have tripled in price because there is no supply, adding: “The goods that came before the outbreak of the virus are already getting out of stock. An auto mechanic event coming up this month was cancelled because of the outbreak.”

“We are not receiving goods again; the last consignment we received will soon be out of stock and after then, we won’t be selling again,” he added.

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