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LCCI: Expressing genuine concern for Nigeria’s hospitality sector

Last week, the Lagos Chamber of Commerce and Industry (LCCI) painted a sorry picture of the country’s hospitality industry, describing it as one of the sectors most hit by COVID-19. Taiwo Hassan reports

Indeed, the multiple challenges posed by the outbreak of Coronavirus on key sectors of the economy are expected to live in the country for a long time.
In fact, lamentations and pains have been the order of the day among players in key sectors of the country’s economy with the health issue saga taking disruption on growth, bottom line, revenues and work force of many firms operating in the country.
However, despite the gradual reopening of the economy for business activities, some sectors are still under lockdown with the prevailing economic hardships hitting them severely.
One of the key sectors currently experiencing this is hospitality of the economy with the challenges cutting across many value chains like production and agric sectors of the economy.

Pre-COVID-19
In deed, the hospitality sector in Nigeria is one of the most dynamic, innovative and fast-growing sectors of the economy before the shock of the pandemic. It is a labour intensive sector and, therefore, generates huge employment.

COVID-19 shocks
However, the LCCI, in its article titled: ‘Mainstreaming the hospitality sector in the economic sustainability plan of the federal and state governments at COVID-19,” said the shock inflicted on the sector and the associated containment measures have been most devastating, adding that a complementary sector of the economy, the aviation sector, was equally negatively impacted by the pandemic.
According to the chamber, there is also the collateral adverse impact on thousands of small businesses that are dependent on hospitality business as suppliers or service providers.
LCCI Director-General, Dr. Muda Yusuf, noted that poultry and fish farmers, for instance, had lamented the impact of the downturn of the hospitality business on their sales and profitability.
According to him, the hospitality sector and restaurants are the biggest patrons of the poultry and fish products in the economy.
Also, Yusuf alluded to the fact that the food and beverages sector experienced similar fate.
In addition, the LCCI disclosed that brewing and bottling companies had suffered a major hit as a result of the stumbling fortunes in hospitality business.

Linkages
For LCCI, the country’s hospitality sector is a one with diverse linkages across many sectors of the economy, which explains the secondary transmission of the shock to many other segments of the economy.

Value
LCCI put the value of the hospitality sector in Nigeria at N1.4 trillion as at 2019.

Jobs risk
The LCCI director general pointed out that hundreds of thousands of jobs were currently at risk if an urgent rescue plan is not put in place for the sector, adding that “this is not a sector that should be allowed to go under.”

Rescue plan
However, he explained that this underscored the need for government to mainstream the hospitality sector in the Economic Sustainability Plan (ESP).
Yusuf emphasised that there should be specific intervention measures for the sector as done for other critical sectors affected by the shocks of the pandemic.
“What currently exists in the ESP is only a passing mention of the sector with no prescribed specific measures and budget.
“We propose that the measures outline for the revival of the aviation sector (and more) should be replicated for the hospitality industry,” he said, adding that “the two sectors are closely related, complementary and interdependent.”

Measures
However, the LCCI proposed some measures including provision of single digit soft loans, with long term repayment plan, creation of opportunities for restructuring of existing facilities with commercial banks and concessions on interest payments, extension of grant support including payroll support to the hospitality industry and related services, among others.

Last line
It is in the interest of the economy for the hospitality industry to be supported by the federal and state governments to recover from the devasting shocks inflicted by Covid-19 and associated containment measures.
Stakeholders represented at the technical meeting include Nigerian Medical Association (NMA), Association of Medical Laboratory Scientists of Nigeria (AMLSN), Nigerian Society of Engineers, Manufacturers of Electromedical Equipment, Medical and Dental Council of Nigeria (MDCN), Nigerian Institute of Medical Research (NIMR), the Academia and other experts from around the country with the SON providing secretariat support services.

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