COVID-19: LCCI says 83% of businesses plan to slash salaries, lay off staff

The Lagos Chamber of Commerce and Industry (LCCI) says majority of business owners (83%) plan to slash salaries, layoff workers or do both to keep their businesses afloat.

Toki Mabogunje, president of LCCI, told journalists on Tuesday that policymakers and the organized private sector need to implement an urgent rescue package for businesses in the formal and informal sector.

“Although government have rolled out raft of relief measures to support businesses, we observe that these packages are tilted more towards formal establishments while micro and small-scale enterprises as well as informal businesses have been largely left out,” Mabogunje said.

Suggesting policy actions to be taken by the government, LCCI said companies in the healthcare, hospitality, aviation and agro-processing sectors should be granted tax break for one year.

“Temporary suspension of 50 percent increase in VAT rate till year end. Also, P.A.Y.E should be suspended for the next six months. This would help boost the purchasing power and aggregate demand, thereby stimulating the economy.

“Agro-processing companies should enjoy import waivers for the next one year; and commercial banks are implored to offer reprieve to businesses and corporates indebted to them.

“The reprieve could be in form of loan moratorium and restructuring. We urge the CBN to review the cash reserve ratio downwards to 20 percent from the current 27.5 percent, to enable commercial banks have more liquidity to support businesses.”

The commerce organisation also urged the government to support airlines to pay for operational cost including international lease rental for aircrafts and fully implement the executive order on removal of VAT from air transportation.

According to Mabojunge, the COVID-19 pandemic presents some economic opportunities in some areas including import substitution, creativity and innovation, and the non-oil export.

She added that there are also, opportunities for productivity and economic optimization abound in sectors like healthcare, agriculture and food, manufacturing, information communication technology (ICT), amongst others.