The ENDSARS protests have crippled socio-economic activities across the country and led to huge financial losses. Preliminary reports show that the economy, which is still reeling from the effects of the COVID-19 pandemic, may have lost trillions of naira since the protests began. According to the President of the Lagos Chamber of Commerce and Industry(LCCI), Mrs. Toki Magbogunje, Nigeria’s economy suffered an estimated N700billion loss in the first 12 days of the EndSARS protests. The losses may have tripled by the destruction of private and government property by hoodlums in some parts of Lagos, Abuja, and other states.
The disruption of economic activities in Lagos, Abuja and other Nigerian cities will definitely have dire repercussions on the already fragile economy as well as the welfare of the citizens. The Nigerian Employers Consultative Association(NECA) has warned that unemployment and inflation rate are rising to unimaginable levels. The latest inflation rate for September was 13.71 per cent, the highest in 30 months.
Also, the stock market reported over N113billion loss last week as a result of the demonstration. Investors’ confidence dampened as a result of the tense security situation in the country. Before the protests turned violent in Lagos and Abuja, the Nigerian capital market had remained relatively stable following profit taking after weeks of a bull run. Last week, however, the stock market All-Share Index, which measures the value of share prices of companies listed on the Nigerian Stock Exchange (NSE), declined by 0.75 per cent from 28,665.82 to 28,449.49, while market capitalisation shed N113 trillion from N14.983 trillion to N14.870trillion.
Similarly, market operators were reported to have shown strong concern about their safety first before thinking of investing. And it is likely that they are monitoring the environment to see how the Federal Government will handle the situation. Despite the 24-hour curfew imposed by some state governors, the protests persisted, an indication that much more should be done to meet the demands of the protesting youths.
There is no doubt that the EndSARS protests have resulted in unintended outcomes and may degenerate if urgent steps are not taken by government to avoid a complete breakdown of law and order, as well as more hardship on the citizens.
The recent data from the National Bureau of Statistics(NBS) show that the economy has suffered its worst contraction in over a decade. For the first and second quarters of 2020, the economy experienced unprecedented turbulence which is similar to the period prior to the 2016 recession. The NBS, in its latest report of economic activities for the second quarter (Q2, 2020), said the Gross Domestic Product (GDP) contracted -6.10 per cent compared to growth of 1.87 per cent in the previous quarter.
Since Nigeria’s exit from recession in 2017, the pace of recovery has been painfully too slow, indicating that another recession is imminent if urgent fiscal and monetary policies are not put in place to stimulate economic growth. As many state governors have appealed to the protesters to cease fire, we believe that is a necessary first step to engender meaningful dialogue. It must be pointed out that it is not easy for a country to recover from two consecutive recessions. In the Q2, the contraction ended the three-year trend of marginal but positive growth recorded in the economy after exiting recession the last time.
Also, the crash in oil prices and the global fallout from COVID-19 pandemic had hit output in key sectors of the economy. The non-oil sector was also not spared, as it recorded contraction, a development NBS attributed to the pandemic. Specifically, the oil sector shrank by -6.63 per cent (year-on-year), indicating a decline of -13.80 precentage points relative to the rate recorded in the corresponding quarter of 2019. In effect, growth decreased by -11.69 percentage points when compared to Q1,2020, which recorded 5.06 per cent.
We urge that comprehensive measures, including dialogue, are quickly needed to avert the economy from sliding into irreversible meltdown. There is urgent need for rapid improvement in governance quality and accountability through effective reforms of the entire public sector. The earlier these measures are taken, the better for the economy.