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Social, food businesses lose N300b to COVID-19

By Femi Ibirogba, Head Agro-Economy
31 July 2020   |   4:33 am
As COVID-19-induced lockdown continues to affect businesses in the hospitality and social industries, commercial chicken, egg and catfish farmers have been counting losses in billions.

PHOTO: Pressherald

• Thousands lose jobs to pandemic
• Hoteliers warn of grave consequences, seek bailout

As COVID-19-induced lockdown continues to affect businesses in the hospitality and social industries, commercial chicken, egg and catfish farmers have been counting losses in billions. This is largely due to the inability to sell their products in commercial quantities.

Industry players told The Guardian the shutdown of schools, social businesses, and worship centres had triggered socio-economic challenges leading to job losses and adversely affecting flow of resources, loan repayment, food and income security, among others.

Hotels, event centres, night clubs, bar and joints have remained shut down. Similarly, gatherings for burials, weddings and birthdays, with associated businesses of fashion designers, event organisers, caterers, confectioners and food vendors have been affected.

In Lagos alone, the number of registered hotels, event centres, bars, food service chains, restaurants and clubs operating in the formal sector is 1,032, according to a document made available to The Guardian by the Public Relations Officer in the Lagos State Ministry of Tourism, Mr. Ayo Afuwape.

Hoteliers, however, said there are, at least, 7,000 of such businesses in Lagos State alone.

President of the Nigeria Hotel Association, Patrick Anyanwu, a traditional ruler, said losses in the hospitality and allied industries were alarming and operators would need financial assistance from government to mitigate the impact.

“We made some requests to the Federal Government a while back. The sum of N120 billion was requested as palliatives. I must say some hotels make N15 billion monthly but the pandemic and the lockdown have affected them. We will be glad if government can heed and grant our plea,” he said.

Anyanwu said he could not ascertain the number of hotels in the country, but noted that a standard hotel would employ the services of no fewer than 30 persons.

By implication, Lagos hotels and other hospitality industries must have dispensed with the services of no fewer than 30,960 workers.

He said: “We have lost more than N150 billion for the period of three months. There are over 20,000 hotels in Nigeria and, in fact, more than 7,000 hotels are situated in Lagos State.

“Abuja, the country’s capital, has over 2,000 hotels, while Imo State, south-eastern Nigeria, has more than 3,000 hotels.

“I must add that we are not going to flout and violate the safety measures put in place by the government by ordering the closure of our recreational centres. We just hope that they would understand our plight, especially the workers, who are dependent on the salaries they get monthly.”

Managing Director of Jogor Centre, Ibadan, Oyo State, Mr Femi Babalola, affirmed that related businesses affected since the lockdown were worth billions of naira monthly, describing the losses as monumental.

Babalola said: “It will be very difficult to quantify. From my experience in the last 25 years, I’ll say the social sector, in which hospitality is one, is a big chunk of our GDP. The social industry is made up of event centres, which are the apex in the hotel industry, as well as transportation, which helps to convey people to various places. The social industry can be likened to tourism in the western world.

“I can say a lot of income is generated from it, but it is quite unfortunate that we are taken aback by the carefree treatment accorded to this industry.”

On losses by event centres, he said about N5 billion was made monthly by the centres from rental services alone.

He added that thousands of jobs had been lost to the pandemic.

He said: “With the belief that things would return to normalcy, some managements decided to pay half salaries to employees and this went on for two months. With constant chains of events, we had to appeal to the staff and bring payments to a halt because there are no palliatives from the government.”

He called for government interventions in terms of funds or loans with low interest rate over a period of time, to strengthen the bond between government and the industry.

“The best thing I can suggest is a forum for the hospitality and social industries with the government to provide palliatives.”

The National President of Catfish and Allied Fish Farmers Association of Nigeria (CAFFAN), Mr. Rotimi Oloye, told The Guardian Nigerian commercial “fish farmers have lost close to N150 billion over the months of lockdown.”

The losses, he added, was caused by the perishable nature of fish and the failure to be move them from production locations to end users.

“With the total lockdown of the country, markets got closed down, celebration of all sorts is forbidden, joints and night clubs are also prohibited, and all these result in zero demand for fishes that are on the farms ready or about to get to the market,” he said.

The situation, according to CAFFAN, is compounded by the non-inclusion of fish farmers in Anchor Borrower’s Programme.

He added: “Fish had to be sold at lower than their cost of production, fingerlings could not be taken up by farmers from the hatcheries, and continued bills incurred on products still on farms waiting on an economy and social life that may take quite a reasonable time to return to normalcy.”

“Everyone has downsized their operations,” he explained, “and this has surely caused job losses and definitely worsened our security situation, both on farms and every other place, since those out of jobs will surely need means to survive.”

He observed that in other climes, governments had responded in support of farmers in more organised ways, lamenting: “But nothing has happened here. We have had of governments buying up farmers’ products in other places; none of such has happened here.”

CAFFAN said it had supported government through donations of products as palliatives, but no government had approached it to buy its products to be used in supporting Nigerians as either COVID-19 palliatives or school-feeding programme.

The CAFFAN boss called on Federal Government and states to “mop up smoked and fresh fishes of members to make recovery easier for farmers. They should also work on providing logistics for cold room facilities for farmed fish and work on agricultural insurance schemes for fish farming.

Mr Taofeek Badmus, General Manager, Tuns Farm Ltd, a commercial processor of chickens in Osogbo, Osun State, said: “The truth is that we are facing the brunt during this time, the costs of raw materials have seen a steady rise while the cost of final product has been stagnant.”

He added that the closure of hotels, event centres and functions has affected sales of produce with many processors still holding finished products in cold rooms at additional cost.

Managing Director of Agro Park, Mr Shola Olunowo, said, “COVID-19 pandemic is the greatest challenge we have faced. It is much more than a health crisis, stressing every country it touches, triggering social and economic crises.

“This has led to the inability of off-take partners to fulfill their obligations to off-take products, and has put pressure on our storage. We have been forced to ask about 40 per cent of our workers to stay at home.”

However, Mr. Rahman Olayiwola, the founder and Managing Director of RTO Farms Ltd, in Osogbo, said though the hospitality industry was incapacitated, other international markets had opened up to poultry producers.

He explained that the inability of Nigeria’s neighbouring countries, including Benin, Chad, Cameroon and Niger Republics, to import frozen foods from Europe and America hadUntitled:Users:shittu.salaudeen:Desktop:South East 20-07-20 forced them to resort to made-in-Nigeria poultry products.