Governor Babajide Sanwo-Olu of Lagos State has said that the weeks of inertia in the economy has had significant impact on Micro, Small and Medium Enterprises (MSMEs), stressing that millions of small-scale businesses operating in the State could completely fold up if the economy is not fully reactivated.
Sanwo-Olu who spoke at a webinar organised by First Securities Discount House (FSDH) Group, with the theme: ‘A Global Pandemic: Local Realities and Peculiarities – A View from the Frontlines’ noted that in addition to granting three-month moratorium to MSMEs that applied for loan facilities at the Lagos State Employment Trust Funds (LSETF), the state government had started to compile data of registered MSMEs in the State for operational support that would cushion the effect of economic slowdown on their businesses.
The Lagos Governor was a panellist in the online discussion that also featured Governors of Kaduna and Edo states, Mallam Nasir El-Rufa’i and Godwin Obaseki.
Governor Sanwo-Olu made known the state government’s conversation with big corporations in various sectors on the requirements they may want from the state to ensure that they do not retrench their staff in this emergency period.
“This conversation is very important. The companies have given us a retinue of incentives they want us to give and these are the things that will affect the State’s Internally Generated Revenue (IGR). We are willing to make this sacrifice to prevent loss of livelihood for millions of our citizens,” he stated.
Responding to question on the consequence which COVID-19 had on the State economy, Sanwo-Olu said: “Lagos has been affected both on the healthcare and economy sides. We have had to take a deep dive into our budget and have about 25 per cent cut, which is not very good number for us. This is the time we need to continue to spend to stave off pressure on our citizens. However, we need to be prudent at this time and cut unimportant expenditures. Salary is one thing we cannot even touch. In terms of direct economy, entertainment industry, hospitality, land transportation and aviation businesses have been affected significantly. These sectors are large employers of labour. We are thinking through on how to reset these sectors in a gradual manner and bring back the economy on the full swing.”
The Governor further pointed out that Lagos State has set the process of re-opening its economy in motion, with the rollout of Register-to-Open guidelines. According to him, the battle to stop the ravaging novel coronavirus had subjected the State to a delicate situation of having to manage hunger resulting from weeks of slowdown in economic activities and also the movement of consumer goods to keep the economy afloat.
He explained that the four-page Register-to-Open guidelines were the major part of the measures initiated to achieve phased re-opening of the State economy, adding that Government had offered incentives that will affect its Internally Generated Revenue (IGR) in order to prevent job loss in critical industries that provide employment for a large number of labour.