#EndSARS Protests: Economy Loses Billions Of Naira Daily Under Curfew — Experts Say

Some Nigerian experts have expressed their opinions on the economic impact of the ongoing #EndSars protests on the country’s economy.

The protest movement was initially aimed at ceasing police brutality by the federal Special Anti-Robbery Squad (SARS) which was widely accused of unlawful arrests, torture and even murder.

Professor Uche Uwaleke, a financial Economist and Professor of Capital Market at the Nasarawa State University said that the effect of the destruction of properties runs into billions of dollars, and will manifest in fall in real GDP, deepen the projected economic contraction this year, disrupt the supply chain and raise inflation, and widen fiscal deficit as the government is bound to incur extra budgetary expenditure to fix damaged infrastructure.

“Further reduction in foreign investments should be expected which is likely going to affect external reserves and put more pressure in the foreign exchange market and the exchange rate. The stock market is likely to witness dampening of investors sentiments. Also, the overall level of poverty and unemployment will likely rise”, he added.

The Managing Director of APT Securities & Funds Limited, Mallam Garba Kurfi also added that even though It will be difficult to get an estimate at the moment, the cost will not be less than N1.0trillion. He also referred to the protests as a “great loss that we never expected since after the civil war”.

Other analysts at Fidelity Securities Limited said that, “ The EndSARs protest and eventual escalation of the protest would cost the Nigerian economy way more than N700 billion initially estimated by the Lagos Chamber of Commerce. With the current level of destruction, it may take a while for business to run at full capacity as the government as well as the private sector will first have to channel funding into the destroyed infrastructure in a bid to restore things back to the way it was, before even thinking of further improving on the infrastructure.”

“Given the level of destruction, more businesses have been affected, more jobs would be lost, and more families would further fall below the poverty line as a result of the looting and burning of business. This is expected to further worsen the economic situation of the country which was already suffering from the impact of Covid-19. The government at this point would need to think out of the box, if it aims to revitalise the economy in the shortest time, else our GDP growth rate may remain negative even into the new year.”

According to Ayodeji Ebu, Senior Economist/Head, Research & Strategy, Greenwich Merchant Bank, the unrest and subsequent 24 hours curfew imposed by the Lagos State Government to restore peace and order may have cost the state at least N54 billion each day that the curfew lasted. He noted that the social unrest would impact negatively on direct investment in the remaining part of the year as well as in the first quarter (Q1) 2021.

“While it may be difficult to estimate the exact loss so far, based on the significant contribution of Lagos State (approximately 30%) to Nigeria’s total Gross Domestic Product (GDP) and as over 50 percent of Nigeria’s non-oil industrial capacity is located in Lagos, the impact of the crisis will be enormous. “This was further compounded with the 24hours curfew that lasted for about four days. Estimating using the Q2’2020 GDP data and assuming there was a total shut down, each day will cost Lagos alone about N54 billon.”

Continuing, he said: “With Lagos the centre of the civil unrest, which accounts for 70 percent or $1.1 billion of total capital importation in Q2’2020, we expect this to further impact on direct investment in Q4’2020 and Q1 ‘2021.” He stated that insurance claims would also spike due to the damages on lives and properties across the country

Analysts at Cordros Capital, a Lagos based investment banking firm, added that the economic impact would likely be more severe if the unrest and curfew persist beyond the month of October and estimated that Nigeria’s economic output would contract by 6.91percent year-on-year (y/y) in Q4’20 as a result, translating to negative growth of 4.15 percent y/y by the end of the year.