Nigerian Economy Lost N1.5TN During #EndSARS Protest Disruption

 

The #EndSARS protest disruption has cost the country an estimated N1.5tn, in terms of economic loss. This is approximately 1.03 percent of the GDP and 11.47 percent of the 2021 budget, Financial Derivatives Company Limited has said.

“This suggests that the economic recovery path could be longer than anticipated. Massive investment in job-elastic sectors with minimal control on the pricing a mechanism will serve as catalysts and would ensure a sustained ‘take-off’,” the FDC, led by foremost economist Bismarck Rewane, said in its latest economic bulletin.

Last month, a large number of Nigerians, mostly youths, protested for more than 10 days against the activities of the now-dissolved Special Anti-Robbery Squad, which had long been accused of unlawful arrests, torture, and extrajudicial killings.

The FDC said the protests magnified existing output challenges and supply chain disruptions.

“This coupled with money supply saturation, higher logistics costs, CBN’s forex rationing, as well as forex restriction for imported finished goods, have heightened inflationary pressures,” it said.

According to the FDC analysts, headline inflation is projected to rise to 14.5 percent in October from 13.71 percent in September.

They said, “This means that inflation will be rising for the 14th consecutive month. It would also be the highest level in 33 months.

“Food inflation will be the most affected as it is estimated to climb to 17.05 percent. Other sub-indices are also expected to move in the same direction.”

According to the FDC, commodity prices increased by an average of 25 percent last month as the protests exacerbated existing output constraints and supply chain disruption.

It said, “About 1,800 trucks of commodities, food supply, finished goods, other raw materials, and logistics enter Lagos on a daily basis.

“A noticeable trend during our survey was that highly perishable and seasonal commodities were severely impacted.”

The analysts said the price of onions, palm oil, and tomatoes jumped by 100 percent, 30.43 percent and 16.67 percent respectively.

They said, “The looting and destruction of public and private properties which followed the massacre at the Lekki toll gate will increase job losses.

“This at a time when the cost of living is skyrocketing due to higher electricity and PMS (Premium Motor Spirit) price, meaning that the level of poverty will rise.

“The EndSARS protest is expected to have both direct and indirect costs on government revenue. Government revenue is expected to fall as streams of income such as BRT buses are affected.

“We also expect a squeeze in corporate margins following the looting and destruction of private properties.”

This would in turn, affect tax revenue in the coming months, the report added.