Co-funded by the European Union

Nigeria: NECA assesses the policy responses needed to support businesses and employees

  • 4,021 companies replied to NECA’s survey on the direct and indirect impact of the pandemic on their operation;
  • A series of request was compiled and was presented to the Government.

The Nigeria Employers’ Consultative Association (NECA) conducted a survey among its members to understand the “direct and indirect impact of the pandemic on their operations and sustainability” as well as “the kind of specific support and palliatives that organized businesses would need”. The results were published in the “Research on Assessing the Needs of Enterprises Resulting From Covid-19: Experience of Nigeria Companies” of June 2020, carried out with the technical and financial support of the International Labour Organisation (ILO) and the ILO Department for Employers’ Activities (ACT/EMP).

Among the 4,021 companies of all sizesand from all sectors that replied to the survey, 36.2 percent stopped their operations due to Covid-19, while 63.8 percent are either partially, fully on site or teleworking. The survey covered the period from 15 March to 30 May 2020. With regards to the sectors, the worst affected sectors reported are:

  • Agriculture, Farming & Fisheries;
  • Aviation, Textile, Leather and Apparel (Garment manufacturing);
  • Real Estate and Logistics;
  • Hotel/Tourism and Manufacturing

The majority of respondents (93.4 percent) stated that “limited cash flow stopped them from fully restoring operations”. “About 32.4 percent of enterprises have had to or contemplating laying-off staff”.

 

The survey concluded with a list of action NECA should do to the companies’ list of needs to the Government’s attention. From the employment perspective, NECA should “Request for Job Retention Scheme which include but not limited to:

  • Government grants to enterprises should cover 50-70% of workers’ salaries for the next 4 months. 
  • […]
  • Incentive for non-lay off of Staff: Advocate for incentives (tax rebates or direct patronage) for businesses that resists the pressure to lay-off staff during the period.
  • […]
  • Collaboration with Trade Unions: Collaborate with the Central Labour Organisations to promote industrial peace and understanding”.

NECA is currently following-up with the Government with the aim of obtaining some or all of its request. The most pressing request among others are palliatives for businesses in the form of tax reliefs in worst-hit sectors, free-interest loans and grants, suspension of some levies and charges and support in payment of salaries of workers to reduce job losses.

These efforts have yielded some results as the Lagos State Government reverted to the old rate of Land Use Charge. The charge was increased in 2018 (between 100% to 200% in some cases). The Central Bank of Nigeria, among other interventions proposed a NGN50 billion intervention for SMEs, NGN100 billion for local drug manufacturers and NGN1 trillion loan facility for key sectors of the economy. Also, the Federal Inland Revenue Service extended the date of filling returns for businesses to enable the businesses to recover. The National Assembly is also considering the “Emergency Economic Stimulus Bill, 2020”, which should provide tax relief, suspension of import duty on selected medical goods and deferral of residential mortgage obligations. Employers who retain their employees until 31 December 2020 will be granted tax relief but not companies will be eligible for this measure.