The Manufacturing Sector Amid The Recent Civil Unrest
The Nigerian government is forecasting a growth in the Gross Domestic Product (GDP) for Q3 and Q4 2020, following a decline of 6.10% (year-on-year) in Q2 2020. The Q2 2020 negative growth comes as a result of the COVID-19 pandemic and fallen oil prices. The government in its response developed several stimulus interventions kicking off with the Economic Sustainability Plan (ESP). The recent civil unrest in several parts of Nigeria will affect Nigeria’s growth projection in the 3rd quarter of 2020 and manufacturing outlets would. On the 4th of October 2020, the #EndSARS starting trending on social media. Afterwards, youth in Nigeria gathered across Nigerian cities such as Lekki, Abeokuta, Abuja, Kaduna, Aba, Port-Harcourt, etc. demanding the abolition of the Special Anti-Robbery Squad (SARS). The #EndSARS peaceful protests started with a focus on curbing police brutality. Protesters staged protests at the National Assembly, Ministry of Justice, National Police Headquarters, and other government agencies.
On Tuesday, the 20th of October 2020, officers of the Nigerian Army were alleged to have shot at peaceful protesters at the Lekki tollgate in Lagos state. Following this unfortunate incident, several hoodlums took advantage of the peaceful protests and started with the destruction of public transportations vehicles, looting of private-owned structures including banks, and stores in popular shopping malls, organizing jailbreaks, manufacturing establishments, and burning down several government-owned assets. This led to panic and a total halt of business activities for about a week. It also leads to several warehouses being raided, containing palliatives meant for the underserved in the community. Curfews have been imposed in Lagos state and other states in Nigeria.
The effect on manufacturing firms.
This civil unrest would prevent workers from commuting to plants on time, delayed shipments from intermediaries to plants, and delayed deliveries to the merchants or ports. Let us consider two main effects which would impact the firm’s revenue numbers:
- The direct effect: Disruptions in the regular production cycle and delays in shipments (which may push firms to opt for a more expensive means of transportation) thereby increasing costs.
- The indirect effects: It may lead to a revision in the cost of goods and services.
- Manufacturing firms should re-evaluate their Corporate Social Responsibility Plan, carry out an impact assessment analysis, and evaluate the impact on their local communities. A community would protect a company when they feel like they have a stake in the firm.
- The welfare of employees. – Companies should review their communication plans and make sure they are in touch with all their employees.
- Mental Wellbeing – Companies should also set up anonymous phone lines for employees to call and share their concerns
- Organizations like MAN should reach out to all its members to see if any of them were affected and provide support.
- Firms should make sure they have essential insurance coverage for the assets and employees
- Advocate for additional stimulus support to improve the country’s manufacturing index ratio.
- Scale-up virtual operations.