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Cost implications of unrest

With over N1 trillion public assets damaged in the wake of #EndSARS uprising, in addition to losses inflicted on economy, ABDULWAHAB ISA examines the cost implications of youth restiveness in a fragile economy.

Smarting from coronavirus pandemic (Covid- 19), which has left devastating impact, the Nigerian economy suffered another monumental disruption last week. The EndSARS protest, a genuine and harmless campaign by some group of youths calling authority’s attention to police brutality on defenceless citizens, morphed into unrestrained protests. From Lagos and Abuja, two cities EndSARS protests kicked off harmlessly, the movement was hijacked by hoodlums across states.

The shooting at protesters on Tuesday at Lekki toll gate, Lagos State, by unidentified military officers tipped the violence into unimaginable scale. Government offices, shopping malls, media houses, banks, police stations, fuel stations, private structures and private businesses were burnt, looted by suspected hoodlums in Lagos, Abuja, Edo, Ibadan, Jos and other states across the country.

Poverty, unemployment as triggers

To affirm that Nigeria is battling two endemic social problems, acute poverty and rising unemployment, is stating the obvious. The National Bureau of Statistics’ (NBS) unemployment data in the second quarter of 2020 explicitly put unemployment in the country at 27.1 per cent, indicating that about 21.7 million Nigerians are unemployed.

Figure for Nigerian active but unemployed youths constitutes highest percentage at 27.1 per cent of NBS unemployment data. These numbers must survive within the system. The EndSARS, thus, was a fertile ground for sprouting protest by larger number of unemployed youths idling away.

The second leg of endemic social factor that fuelled the protest into combustible riot is located in Nigeria’s chronic poverty level. This isn’t limited to age group. Unbriddled bad system that endures over the years aided by pervasive corruption by the elite class remains a time bomb still waiting to explode.

The protest was a fitting time for that explanation. The carting away of Covid-19 food items from warehouses across the country amplified the drenching poverty level prevalent in Nigeria. Experts and economists alluded to persisting acute poverty rate as trigger for the protests. Speaking on remote causes of the protests on Channels Television last Friday, International Monetary Fund (IMF) Director, African Department, Abebe Selassie, said acute poverty, high unemployment rate among the youths was a triggering factor. Abebe urged government to do more by creating a conducive atmosphere, which will in turn, create more jobs. He harped on the need to invest in key sectors and create more job opportunities.

“Suffice to say that the economic conditions in Nigeria in the last four years have been very difficult in the wake of declining oil price. “There has been a lot of pressure in sources of livelihood. There has been this dislocation as always when you have this sort of economic difficulties, social protests are not uncommon. “This is why IMF has been keen about policy measures in Nigeria to get economy out of woods.

Government’s needs to do more to raise enough revenue from non oil sources. “You need to invest in health, education and allow people to be more successful and getting jobs. But more importantly, up the economy potentials by striking balance that create that jobs opportunities that country needs,” he said.

Cost implications of protest

It is on record that the economy is already in a frail state on the backdrop of Covid -19. For over five months, the economy was shut down. The EndSARS protests, which assumed destructive dimensions leading to public asset destructions inflicted huge damage to already battered economy.

Experts said the cost implications could be massive.

Professor Uche Uwaleke of Banking and Finance department, Nassarawa State University said the end result of the destructions would manifest in GDP contractions. “While it may be relatively easy to quantify the explicit costs to government, groups and individuals of properties destroyed in the wake of the end SARS crisis which runs into billions of US dollars, the implicit costs from curfews in several states, movement restrictions, reputational risk and impact on investment cannot be quantified.

So also, is the loss of precious lives many of whom must be family breadwinners. “Inevitably, the result will manifest in fall in real GDP deepening the projected economic contraction this year, disruptions in supply chain and rising inflation, widening of fiscal deficit as government is bound to incur extra budgetary expenditure to fix damaged infrastructure. This will entail further borrowing and worsening the debt burden,” he said.

He added that, as a consequence, further reduction in foreign investments should be expected, which is likely going to affect external reserves and put more pressure in the forex market and exchange rate. “The stock market is likely to witness dampening of investors sentiments. Also, the overall level of poverty and unemployment will likely rise. “Government should move fast to restore normalcy and confidence in the economy including speedy implementation of socioeconomic reforms in line with the demands of the end SARS protesters,” Uwaleke advised. On their part, governors of South West states described the vandalisation of assets in Lagos as a “coordinated attempt” to weaken economy of the region.

Rotimi Akeredolu, Governor of Ondo state, who spoke on behalf of the governors, stated this after an assessment tour of Lagos state. According to a statement by Gboyega Akosile, spokesman to the Lagos Governor, Akeredolu likened Lagos to a war zone, stating that the extent of destruction was shocking. The governors condemned the widespread violence, adding that there appeared to be an agenda beyond the nationwide #EndSARS protests against police brutality.

“We are deeply concerned with the ease with which public buildings, utilities, police stations and investment of our people have been burnt despite the proximity of security agencies in those areas. The development leaves us with no other option than to believe that there may be other reasons for continued protests, well coordinated and funded,” Akeredolu was quoted as saying.

“We are particularly worried that 48 hours after the unfortunate incident at the Lekki Toll Gate by persons adorning military outfit, there has been no definitive statement from the military authorities on the incident. Our anxiety becomes heightened by the categorical denial of the Governor of Lagos State concerning the military deployment. No Governor has powers to authorize deployment of military personnel in Nigeria.”

Last line

To rein in youths in future, government should draw up a road map on innovation and employment programme. Merit should be given preference for securing employment into public sector against other considerations.

 

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