By Hamilton Nwosa (Head, The New Diplomat Business and data tracking desk)
Following President Muhammadu Buhari’s directive to lock-down Lagos, Ogun and the Federal Capital Territory (FCT) over the COVID-19 pandemic for two weeks, economic analysts have been examining the projected financial impact on the two States and the FCT respectively.
The New Diplomat’s economic intelligence desk using data from the National Bureau of Statistics (NBS) as well as those sourced from the affected State governments and the FCT projects that Lagos State government whose monthly average Internally Generated Revenue(IGR )is N34bn would be losing about N17bn in two weeks of economic inactivity. This is followed by Ogun State that is estimated to likely lose about N3.5bn for its lock-down.
This is premised on the fact that Ogun State’s monthly average Internally Generated Revenue (IGR) is put at N7 billion while FCT would be experiencing a revenue loss of about N2.8bn in two weeks. According to data obtained from the NBS, the yearly IGR of FCT stands at N65.51bn. Similarly, according to the data sourced from Lagos State government, the State generates roughly N34bn monthly in IGR while Ogun State government puts its IGR estimates at N7bn monthly.
Experts projects that should the COVID-19 continues, Nigeria would be witnessing severe economic challenges. This is because the above projected financial losses are limited to the revenue estimates of the affected States and the FCT as they don’t’ include projected financial losses that would arise from private sector inactivity in two weeks. These include effects of shut down by financial institutions especially banks, various private sector commercial organizations,and even inability to secure requisite Oil and gas related approvals that might impact on Oil production in the Niger Delta. This is because the corporate headquarters of the oil companies are in Lagos while some institutional approvals that must be obtained are domiciled in Abuja . Recall that President Buhari had Sunday ordered shutdown of Lagos, FCT and Ogun State for two weeks with effect from Monday night.