The wave of negative impacts of COVID -19 blowing across the world, with Nigeria not exempted, has drastically reduced the purchasing power of consumers.
The average Nigerian is currently faced with difficulty in affording consumer goods following rise in prices, occasioned by the lockdown to curb the dreaded disease.
Many households are depressed over the negative impact COVID-19 is having on their standard of living, which is becoming unbearable and costly due to the weakening purchasing power. Worse still, many firms can no longer meet up with salary obligations to their workforce since the pandemic has disrupted marketing feasibility and revenue projection.
It was gathered that another reason that is weakening purchasing power among average Nigerians is the level of poverty in the country going by the report released by the Nigeria Bureau of Statistics, which confirmed that 40 per cent of Nigerians (or 82.9 million people) are poor.
Findings from manufacturing firms revealed that the crisis stemmed mostly from the ravaging coronavirus, which has caused disruption in supply chain and effective distribution in network of consumer goods across the country.
Already, the Manufacturing sector is reacting to the global pandemic as firms are now struggling to pay workers’ salaries promptly by resorting to slash in salary payments amid daunting challenges. They expressed wor-ries that the reduction in household incomes, occasioned by the loss of jobs and salary cuts due to the pandemic, alongside inflation in the first quarter of 2020, will further affect consumption and capacity to purchase goods.
It was gathered from some factory workers in blue-chip manufacturing firms in the country that the imposed lockdown for weeks by President Muhammadu Buhari resulted in the companies missing salary payments to workers, as they complained of shortage of raw materials for production, disruptions in supply chains, travel restrictions, exchange rate depreciation, breach of contractual agreements, macroeconomic shocks, loss of revenue, suspension of business activities, erosion of investors’ confidence and many more. A letter by the Lagos Chamber of Commerce and Industry (LCCI) to the private sector operators who are members of the chamber admitted that these were very challenging times for the country’s business community as a whole following the COVID-19 pandemic causing severe dislocations in business and the economy.
Reacting to the price increase despite fall in crude oil price, the Executive Secretary, Nigerian Association of Small and Medium Enterprises (NASME), Eke Ubiji, explained that prices of commodities would continue to remain high for some time because companies are currently facing difficulties with production.
“The cost of production is so high, so out put is expensive for consumers.
The scourge has fuelled increase in cost of goods as cost of logistics has also impaired ease of distribution.
He said only a few factories were producing in the country due to inability to source raw materials locally, coupled with the harsh operating environment.
He cited an example of construction companies whose work were on hold as a result of high price of cement. The cement companies on the other hand have laid off workers due to negative impact of the pandemic.
Ubiji noted that in as much as manufacturers cannot source raw materials cheaply, there is the probability that commodities and packaging cost would remain high for some time and beyond the purchasing limit of average Nigerian.
Noting that the intervention by Central Bank of Nigeria (CBN) was to help businesses survive, he said up till now, registration was still ongoing to access the facilities, which could part of the reason companies which are supposed to be beneficiaries are struggling to continue in business, leading to sack, slash in salaries and closure.
“With the review of the budget downwards it indicates that things may get worse. That is why the CBN came up with the 50 billion to help businesses. The loans are yet to be disbursed, and registration is still ongoing, the authorities said before the money is accessed applicants whose facilities have been approved, would need to come to Abuja and sign some documents. This is one of the bottlenecks; in this lockdown, going to Abuja might not be easy.
“Though to an extent, the delay in the payment of the money will be part of the reasons some businesses have laid off staff for inability to meet up with demand. It may get to the point that workers may take their employers to court and that is a bad situation.” To help the economy bounce back NASME boss opined that government has to stimulate the economy by giving to industries and create employment opportunities to save the day.