Lockdown: NECA predicts massive job loss

The Nigeria Employers Consultative Association has said the country faces massive job loss if it does not take steps to prevent the situation.

The association stated this in its weekly bulletin, NECA News which it published on Friday.

NECA pointed out the harsh business environment in Nigeria had dealt devastating blow to businesses in the country, adding that the situation had been made worse by the ravaging coronavirus pandemic.

It stated, “The devastating effect of the long-standing inclement environment for doing business in Nigeria has been over flogged.

“This has been compounded by the COVID-19 pandemic and the follow-up effect of the unproductive lockdown which understandably was necessary to reign in the blight and protect lives.

“In Lagos State, the majority of businesses are now in their fifth week of business shutdown and four weeks on in the Federal Capital Territory and Ogun State while the impairment of business varies in other states.”

NECA noted that while businesses had remained passive and unproductive with attendant mass losses of revenue, overhead costs had remained.

“Wages obligations to workers and several statutory payments without respite remained constant,” it stated.

According to the association, the government has spoken well in urging businesses to continue to bear the brunt without recourse to staff rationalization, while members of NECA have been equally urged to continue to keep the full complements of its workers for as long as it is bearable and as far as economic indices will permit.

It noted however that even though employers had been advised to keep staff, hard decisions at this time would be inevitable because five weeks of economic and business shutdown have “overstretched” the limits of firms.

“Businesses are beginning to buckle under the weight of the burden it is carrying without corresponding productivity from workers and necessary support from the government. This is the reality today.

NECA noted that balancing the protection of lives with economic interests should, ordinarily not be difficult, adding that while the protection of life should take precedence, the need to protect the economic foundation of the nation cannot be discounted as the economy will ultimately sustain life.

It added, “While the government takes decisive steps to protect lives, efforts should also be made to keep productive activities going.

“Without delicately balancing the scale, the consequential negative effects of the pandemic will not only include unimaginable loss of lives, massive job losses and heightened insecurity, it might also lead to unnecessary social revolt.”

The association recommended that to save jobs of Nigerians, government should consider direct interventions such as; direct wage or income support, wage subsidies.

Others are; tax credits or tax deferrals, short-term work schemes, moratoriums on loan payments.

NECA also recommended the establishment of a coronavirus job retention scheme, where the government pays up to 60 per cent of private sector salaries until June, as long as workers are not laid off, as done in other climes, such as the United Kingdom, France, Denmark and others.

It said this would reduce the negative impact on businesses and slow the rate of job loss.