The devastation afflicted on key businesses by COVID-19 leaves majority of them gasping for breath. In its usual intervention, CBN is rallying support of chief executives of banks for life line to revamp the key sectors of the economy in order to avert job losses, ABDULWAHAB ISA reports
No sector of the economy escaped the disruptive pang of COVID- 19. With the simmering down of the scourge and gradual rise in activities across sectors, business owners are responding with drastic decisions that sync with the new reality. In the aviation sector, for instance, airline owners have resorted to massive lay off of core operational staff like pilots and engineers as consequences of COVID-19 disruptions. The sector experienced total shutdown for over three months. Same goes for media industry and other sectors of the economy. They suffered heavy losses in income. Emerging from the COVID-19 wreck, business owners in affected sectors are responding by taking some remedial measures that will guarantee their existence, however, skeletal. There have been massive purge of employees across board in sectors of the economy.
Roadmap for revival of critical sectors
The drift in critical sectors, if left unattended, may further impact the already fragile economy. To avert what may turn a dire situation, the Central Bank of Nigeria (CBN) is rallying the Bankers’ Committee to come up with a number of measures that would keep these critical sectors imperiled by COVID-19 afloat. At a recent Bankers’ Committee meeting in Abuja, the apex bank and chief executives of banks agreed to intervene in select sectors to revamp them to avert job losses. Two sectors, aviation and media, are among the key sectors listed by CBN and the banks for special funding to aid their recovery from COVID- 19 trauma.
Airlines, media on CBN’S rescue plan
The airline and media sectors are catalyst for economic growth and development. They offer job opportunities to millions and contribute substantially to Gross Domestic Products (GDP) growth. Presently, the sectors are reeling under the weight of COVID- 19. In the course of the pandemic, airlines business experienced total shutdown. The airspace remained closed in adherence to heath safety rules. It took toll on airlines’ fortunes. Some airlines sacked pilots, while salaries of other category of staff got slashed by 40 per cent.
The management of Air Peace, for instance, linked the pilots’ disengagement to the devastating impact of the pandemic. The pilots had, on July 22, protested a major pay cut after negotiations with the management over their remuneration broke down.
A statement by Mr. Stanley Olise, spokesperson of the airline, described the sacking of the pilots as “painful, but rightful decision. “The airline cannot afford to toe the path of being unable to continue to fulfill its financial obligations to its staff, external vendors, aviation agencies, maintenance organizations, insurance companies, banks and other creditors, hence the decision to restructure its entire operations with a view to surviving the times. “The pandemic has hit every airline worldwide, so badly that it has become very impossible for airlines to remain afloat without carrying out an internal restructuring of their costs.
“Anything short of what we have done may lead to the collapse of an airline as could be seen in some places worldwide during this period. Therefore, we decided to review the salaries being paid to all staff. “The new salaries reflect a zero per cent-40 per cent cut of the former salary, depending on the salary grades of every staff.
Even after the cuts, it was obvious that for us to be able to sustain our operations and survive the times, some jobs must inevitably have to go. “Air Peace has never, for one day, ever owed salaries to its workers in its almost six years of existence, pilots inclusive. Rather, the management of Air Peace has always been known to be increasing salaries of its employees periodically, without being prompted by staff”, Air peace management had said. Arik Air and other airlines adopted survival strategy to beat COVID – 19.”
Similar fate befall media sector. COVID-19 outbreak leaves gaping hole on a sector hitherto struggling for survival. Most media houses find it extremely tasking to meet salary obligation to employees in the face drastic drop in advert runs and reduced paginations. Unable to cope with the impact of the pandemic, media houses resorted to sack of employees to remain afloat. The Central Bank of Nigeria, in conjunction with the Bankers’ Committee last week came up with intervention plan to bail out media houses and aviation sector. On the prompting of Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, the Bankers’ Committee unanimously agreed to extend special facilities to Nigerianregistered airlines and the media industry in Nigeria, to enable them adequately address the negative impact of COVID-19.
Addressing the bank chief executives at the bi-monthly virtual meeting of the Bankers’ Committee, Emefiele urged the banks to do all within their powers to support airlines in the country, noting that such support was critical to helping the industry recover from the economic crisis triggered by the COVID-19. Similarly, he urged the banks to support the efforts of the media industry in Nigeria, to cope with the lingering pandemic, in order to avoid massive job losses in the industry. It will be recalled that the CBN, in the advent of the coronavirus in Nigeria, announced a N1.2 trillion intervention funds to support critical sectors of the economy, out of which N1 trillion was to support local manufacturing sector and to boost import substitution. The remaining N100 billion of the intervention fund was to support the health sector in equipping laboratories and enhancing research to produce vaccines and test kits in Nigeria.
The bank, also in March 2020, unveiled guidelines for the implementation of a N100 billion Targeted Credit Facility (TCF) as a stimulus package to support households and micro, small and medium enterprises affected by the COVID-19. The latest move by CBN and the Bankers’ Committee could be an answer to the optimism expressed by the Minister of Aviation, Hadi Sirika, who said the ministry was hopeful that businesses in Nigeria’s aviation sector would be given opportunity to access palliatives from CBN. It is hopeful that with the support expected for the media in Nigeria, many media house will be able to weather the storm generated by the corona virus pandemic.
Export sector rebirth
Nigeria used to be renowned for export of commodities like cocoa, coffee, groundnut, timber; palm oil and others. Sadly, the country is a net importer of most of these products from other nations as finished goods. The Central Bank of Nigeria has initiated policy aimed at revamping export of commodities. In continuation of the initiative of making export as nation’s economic backbone, the CBN governor met with chief executive officers of multinational companies in Abuja. The discussion centered on ways to revamp Nigerian export. While decrying the situation where many Nigerian produce of export quality are waiting to be tapped, Emefiele said the CBN, in collaboration with the Federal Ministry of Industry, Trade and Investment, would ensure facilitation of a reboot of the Nigerian export market. Alluding to President Muhammadu Buhari’s charge for Nigerians to produce what they eat and eat what they produce, the CBN governor reiterated that the country had no choice but to diversify its economic base away from heavy reliance on crude oil. The meeting is expected to produce a roadmap on how best to revitalise the export sector in order to earn foreign exchange for the country, as well as generate jobs for millions of Nigerians. Emefiele said the campaign, ‘Produce, Add Value and Export’ (PAVE), must be faithfully implemented, adding that export of agriculture produce presented veritable opportunity to reinvigorate export.
The planned collaborative intervention by CBN and deposit money banks to revamp key sectors, without doubt, will arrest the drift afflicting the sectors and halt losses.