The Lagos Chamber of Commerce and Industry, LCCI, says the outlook for global economy appeared bleak, going by the effects of the ongoing COVID-19 pandemic.
The LCCI’s President, Toki Mabogunje, made the assertion at the LCCI’s Forum on Impact of Coronavirus on Nigerian Economy, on Tuesday in Lagos.
Mr Mobogunje, represented by the Deputy Vice President of LCCI, Michael Olawale-Cole, said that the COVID-19 outbreak which had dealt a a severe blow to the global economy, if not curtailed, could result to global economic recession.
According to her, the disease has disrupted and is still disrupting businesses, economic and financial activities across the globe.
She commended the efforts of both the federal and the Lagos State governments at curtailing the spread of the virus.
“The COVID-19 outbreak has seen businesses shutting down operations, factories closing, schools on recess and conferences, sporting events, concerts and business meetings have all been suspended.
“Also, global equities and commodities markets have been severely affected.
“Oil prices have been hit hard due to drastic cut in global oil consumption, compounded by the ongoing price war between Saudi Arabia and Russia.
“So far, on the confirmed case of the virus in Nigeria, the efforts of the federal government and the Lagos State government to curtail the spread of the disease is highly commendable,” she said.
Speaking at the event, Dr Ayo Teriba, Chief Executive Officer, Economic Associates, faulted the intervention measures by the Central Bank of Nigeria, CBN, to cushion the effect of COVID-19 on the Nigerian economy.
The News Agency of Nigeria reports that the governor of CBN, Godwin Emefiele, had announced a further moratorium of one year on all principal repayments on the bank’s intervention facilities and interest rate reduction on such facilities from nine per cent to five per cent for one year, effective March 1.
Mr Teriba said that a system-wide intervention that ensured rates across board were reduced would have been a better option.
“It is not right to cut rates for only companies with direct link and dealings with the apex bank.
“A regulator is meant to protect the whole system and not just his own books,” he said.
The renowned economist stated that the current situation with the nation’s foreign reserve had left the country’s economy vulnerable due to oil prices volatility resulting from the pandemic.
He said that the current health challenges, with its political, economic, social and health effects, though temporary, may have permanent consequences, should the timeline of the pandemic be prolonged.
According to him, the duration of the adverse social and economic effects for Nigeria is dependent on how long the world can bring the pandemic sufficiently under control, for the restrictions of movement and public gathering to be lifted.
“The absence of vaccine, which has led to low oil prices that has threatened to derail the budget, devalue the Naira may end in recession.
“Temporary problems may have permanent consequences if they lead to bankruptcy, loss of jobs and wealth,” he said.
Also, Ajibola Olomola, Partner, Tax, Regulatory & People Services, KPMG, in his remarks, encouraged more private sector investment in the area of health, to help curtail the spread of the pandemic.
He also called for increased investment in technology to optimise existing business processes.
“Due to the outbreak, many brick-and-mortar retail businesses, shopping malls and department stores have taken a considerable hit in China.
“On the other hand, emerging community shops and online shops are increasing their trading volume and attracting a mass of new customers.
“Companies should also experiment on the possibility of large-scale remote working conditions for employees and its impact of productivity,” he said.
The Commissioner for Health, Lagos State, Prof. Akinola Abayomi, who was represented by Dr Soji Ologun, said that the health, social and economic impact of recorded cases have been rapidly curtailed.
He sought the support of the Organised Private Sector, OPS, to beef up surveillance at the air, sea and land borders.
NAN reports that the World Health Organisation, WHO, declared the novel coronavirus, Covid-19, a pandemic on March 11.
According to the WHO, a disease is declared pandemic when a new disease for which people do not have immunity spreads around the world beyond expectations.