No Mercy For Dying Businesses In Akwa Ibom

By UbongAbasi Ise

When Akwa Ibom State Governor, Mr. Udom Emmanuel, inaugurated a Post-Covid 19 Economic Reconstruction Committee headed by a renowned economic scholar, Prof. Akpan Hogan Ekpo, there was rising concerns in some quarters that such laudable economic remedial move might end up being jeopardized by the regurgitations of old microeconomic ideas that are far removed from the current realities of the post-Covid economic epoch. Such fears were stemmed from the fact that academicians and the economic glitterati of this world constituting the committee might turn the platform to a literal theatre where grammar and more grammar are competed, which at the end, leaves the precarious economic situation irrecoverable. Common wisdom was that the committee could have been constituted with market men/women, the product distributors, transporters, fishermen, agriculturists, manufacturers, local-based financial institutions and well-known business gurus that know where the shoe pinches. Albeit, the report of the committee came out on Tuesday June 9, 2020 and found its way into the cooler of the state government while businesses affected by government’s emergency policies continue to remain on life support with handful of others breathing their last.

Every government, in times like this, is expected to wear a human face. If the people’s government is not to be looked up to, then who else could be highly dependable in providing socio-economic remedies? Events of the past few months surrounding Covid lockdown have serious impact on the present day-to-day economic setup. We need to trace where all started to go wrong. Considering the Akwa Ibom market traders whose shops were only allowed to open three times in a week due to partial easing of Covid-19 lockdown measures by the state government, the question pricking every conscientious mind should be: who pays their rent for the off days?  And who pays for their expired and perished merchandises?

For the transporters, the approved number of passengers for tricycles was three including the rider; mini-buses were directed to carry two passengers per row while taxis were allowed to carry three. After all these protocols, who pays these drivers for the empty seats per trip? Instead of allowing them to enjoy tax holiday as pronounced, they were cornered and multi-taxed, what was their fault?

Most businesses like restaurants, eateries, bars, retail shops, nightclubs, etc. usually make reasonable sales at dusk hours. But owing to then 8pm-6am curfew and other restrictions imposed by the government, their prime selling time was cut off, thus leaving them with insufficient sales. The question bugging the mind is: who assist them in paying their staffers as well as the exorbitant estimated PHED bills slammed upon them for the kilowatt hours they never used?

We can also shift attention to the private enterprises that retrench their workforce or completely face outright liquidation - the worrying question persists: who pays the affected personnel that now return to the streets unemployed?

Some of the private schools owners were and are still paying rents, utility bills and probably expended for facility maintenance irrespective of the schools lockdown, but a far more significant question is: who helps them in paying their employees’ salaries that have been out of work for months?

Education in Akwa Ibom is a major business that offers a lot of jobs to people in the informal sector of the economy.  In this connection, it is a matter of curiosity to know who is thinking about the survival of micro, small and medium scale enterprises that cluster around educational institutions that have been left hibernated. A lot of ICT outlets, stationery stores and self-employed individuals feed on school environments; the correlative logic is that while the schools remain shut, these businesses become ailed. But who is there to resuscitate them?

Generally, SMEs in the state are faring badly despite the fact that they form the engine-room of the economy. Their owners are watching them die slowly, and at times, suddenly. Who comes to their rescue?

All of the foregoing subtleties dovetail into dispassionate interrogation of the role of Akwa Ibom State government in intervening in the lives of the majority that are now living on the margin.  Because the state government gives directives for the precautionary measures against Covid-19 pandemic which adversely affect businesses and the standard of living in the state, it is expected of the government to offer some sort of reliefs to businesses in form of interest-free loans, grants, subsidy on electricity bills, waiver on some of the levies as well as other stimulus packages. If government could order citizens to shut down their means of livelihood, it is a naturally expected of the same government to compensate the affected persons in a way that ameliorates their suffering  otherwise faces legal charges of denying people their rights to good standard of living in line with the article 25 of the Universal Declaration of Human Rights (UDHR) and article 11 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) including other similar international arrangements. But the tricky, fiddly nature of Nigeria’s Constitution has made it difficult for the economic, social and cultural rights of the people to be enforceable in our domestic courts.

As simple as A-B-C, the post-Covid 19 economy in the Third World demands government allowing money to flow into the hands of the local population by way of injecting funds into - or patronizing their businesses as well as initiating projects that would fetch people more money in their pockets as this would give them latitude to also spend in the local economy. This is because the major danger of the Post-Covid 19 economic trend is more of deflation than inflation and any other economic maladies save for recent devaluation of Naira. Olivier Blanchard from the Peterson Institute for International Economics, PIIE, predicts economy with low levels of inflation accompanied with exceptional high rate of unemployment, while pointing to the fall of commodity prices and a collapse of oil price as indicators, concludes that deflation could be the main challenge to avoid. This could be seen as a pathway to economic depression.

 Even though Akwa Ibom is experiencing price hike of staple food items like garri and rice which shows false presence of inflation, prices of other related commodities are relatively low while demands for most products and services like construction, flight, hospitality, social events, are weak because of paucity of money in circulation.  This is a situation of deflation because demands for most goods and services are feeble. Therefore Governor Udom Emmanuel’s monetarist economic tendency of controlling the supply of money that flows into the economy while allowing the rest of the market to fix itself is no longer tenable in the present Post-Covid 19 economy. What the present economic situation requires is a Keynesian sort of economic model that demands more government domestic expenditure and drastic reduction of taxes in order to stimulate the economy.

There is a great lesson for Udom Emmanuel-led government to learn from a deflationary economic malady which resulted in the Great Depression in the1930s whereby America’s economy was devastated leaving lives of the majority in miserable conditions. Beginning from 1929, about 650 banks failed by August that year. According to reports, unemployment in Toledo in the State of Ohio, by 1933, climbed to 80% and nearly 90% of Lowell in Massachusetts stayed largely unemployed. Destitution increased with the housing prices plummeted to 67%; while deflation skyrocketed above 10%. A lot of food items perished in the shops because people could not afford them due to scarcity of cash in circulation.  What the newly elected President, Franklin Roosevelt did was to introduce the New Deal which came with Public Works Administration (PWA) that saw government releasing about $4 billion for projects that would absorb thousands of locals for the construction of new educational buildings; new courthouses, city halls, sewage-disposal plants; new public health facilities; new roads, bridges and subways. The logic behind this program was that with their paycheck, workers would be at liberty to spend money, thus helping other businesses stimulate the economy as a whole. The works programs reduced unemployment, people no longer need government relief, but instead they would work on the various construction projects and earn a modest pay.

Likewise, the Akwa Ibom State government should stop being parsimonious at the moment and revisit the former model of the inter-ministerial direct labour project which left a lot of contracts in the hands of the indigenes of the state. Instead of leaving the management of such projects in the hands of very few powerful individuals, there is the need for the governor to initiate new 960 projects and engage at least 30 indigenous contractors per local government area across the state that would then turn around and be absorbing indigenes of their areas. Projects could span water supply, feeders’ roads, refurbishment of public facilities, landscaping, agriculture, etc.  With this development, money would flow in the hands of the people across 31 local government areas. Government expenditure always has a way of stimulating and bringing life to ailing economy.

It’s time to have mercy on these dying enterprises. Akwa Ibom State government should soft-pedal on the manner it spends outside the state unless the required service is totally unavailable at state’s domain. If capital is constantly repatriated away from home then Akwa Ibom economy would continue to fare badly in this post-Covid 19 era. Buying goods and obtaining services from the indigenous enterprises has a way of cranking the state’s economy into motion. The state government should adopt this bottom-to-up approach in staving off the untold socio-economic hardship facing the people whose means of livelihood had been wrecked by an economy that has fast gone into tailspin. Small and medium scale enterprises are the engine-room of any economy. Therefore, any government that ignores this economic segment probably is not serious about growing economy. A lively economy would always inspire creativity, innovation and self-sufficiency amongst the youths.

Culled from The Rights Journal | September 2020 Issue

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