As reactions continue to trail the widespread looting and vandalism in the aftermath of #EndSARS protests, penultimate week, the Managing Director and Chief Executive Officer, Financial Derivatives Company (FDC) Limited, Mr. Bismarck Rewane, has said that the devastation will likely lead to a deepening of the country’s economic slump as well as delaying the expected economic recovery. He made the prediction in the latest edition of the FDC’s “Afriscope” report obtained by New Telegraph yesterday.
The #EndSARS crisis, which broke out on October 20, when security forces in Lagos opened fire on unarmed protesters, who had been staging a sit-in for about two weeks at the Lekki Toll Gate, calling for the dissolution of the Special Anti-Robbery Squad (SARS), a notorious Police unit that had long been accused of extortion, torture and extra-judicial killings, resulted in the nation suffering losses that economists, according to the Afriscope report, have estimated at about N1.5 trillion.
Commenting on the impact of the crisis, the FDC’s team of analysts, led by Rewane, who is a member of the Presidential Economy Advisory Council, stated: “The economic costs of the looting will deepen the economic downturn and delay economic recovery.
Domestic commodities prices will likely remain high as the supply chain challenges persist. Business operations would be tough and unemployment levels are likely to spike.
This is because individuals working in the burnt down shops, banks and malls have lost their jobs and sources of their income.” Giving more insight into how the crisis will affect the economy, the FDC said: “Cost of living would increase, and in turn, lower aggregate demand and consumption levels.
Investors will be very cautious about putting money into the country. They will likely put a hold on their decisions to invest and this will limit forex inflows. Foreign portfolio and direct investments would continue their declining trend. Capital importation into Lagos and Abuja could also decline, as the states are the hotspot for the protests and killings.”
In addition, the firm noted that: “State governments are now saddled with the responsibility of rebuilding and supporting individuals who lost their businesses to the looting. This could mean that funds set aside for other government obligations will now be diverted to this cause.
The government, particularly in Lagos, which has the highest number of confirmed coronavirus cases, may reduce health expenditure to begin the rebuilding process.
“Furthermore, these events and the outcomes put the country in a very sensitive position in the eyes of international organizations like the United Nations, World Bank and the International Monetary Fund (IMF).”
In fact, during the recent World Bank/IMF virtual annual meetings, the Director of IMF’s African Department, Mr. Abebe Aemro Selassie, told journalists at a media briefing held two days after the Lekki shootings, that the Fund was concerned about the #End- SARS crisis, especially its impact on Lagos, which contributes significantly to Nigeria’s overall Gross Domestic Product (GDP).
In its October World Economic Outlook report released last month, the IMF upgraded Nigeria’s economic growth in 2020 to -4.3 per cent from -5.4 per cent it had forecast in June.
The Fund, however, revised down its 2021 growth forecast for the country by 0.9 per cent to 1.7 per cent. The Bretton Woods institution had, in its June forecast, projected that the Nigerian economy would grow by 2.6 per cent next year.