LCCI’s Director-General, Muda Yusuf, made this known on Sunday through the LCCI’s Economic and Business Review for 2020 and Outlook for 2021.
Yusuf further attributed the development to two major disruptions of COVID-19 and the EndSARS protests experienced by businesses operating within the Lagos metropolis.
He added that the sharp naira exchange rate depreciation coupled with sustained acceleration in domestic prices escalated both costs of production and operation for investors in the economy.
“The business community witnessed two major disruptions in the year 2020 – COVID-19 pandemic and EndSARS protest nationwide.
“Our findings showed that MSMEs with an active presence in Lagos lost at least N2.7 billion in revenue to the lockdown.
“The fiscal and monetary authorities as well as the coalition of private sector players provided several relief measures to cushion the impacts of the pandemic on the business community.
“Business activities rebounded modestly in Q3-2020 following the relaxation of various lockdown measures.
“However, the major challenges faced by the business community in the outgoing year include – liquidity crisis in the foreign exchange market, sharp exchange rate depreciation, high energy and production cost.
“Others are: ports congestion, cumbersome and burdensome customs processes, insecurity, inconsistent policies, regulatory uncertainties, land border closure and Apapa traffic gridlock,” he said.
The LCCI DG stated that the outlook for the business environment particularly for MSMEs in 2021 was not very bright.
He attributed this to lack of quick fixes for structural issues and the desired regulatory and institutional reforms.
“Without bold policy pronouncements in this regard, constraints to the ease of doing business including FX shortage, escalating production costs, high regulatory costs, infrastructure inadequacies and delayed cargo clearance will persist into year 2021.
“These constraints will be more profound on businesses in the real economy and we believe the sluggish pace of recovery will continue to subdue consumer demand, albeit the impact on earnings performance will be disproportionate across sectors.
“While most MSMEs will struggle to survive in 2021 amid unfavourable economic conditions, we expect most large corporations to demonstrate resilience in the coming year.
“We expect the economy to return to the path of positive growth in the second quarter of 2021.
“This will expectedly impact on the macroeconomic environment which may ease some of the critical economic conditions currently impeding economic growth,” he said.