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SME, hospitality, aviation lament adverse effect of COVID-19, seek relief

by Business News Report

Small and Medium scale enterprises in hospitality and aviation sector are lamenting the loss of fortune in their business and seeking relief from government. Presenting their view, Director General Lagos Chamber of Commerce and Industry Dr. Yusuf Muda said “we propose that the measures outline for the revival of the aviation sector, and more, should be replicated for the hospitality industry.  The two sectors are closely related, complementary and interdependent.  These measures are 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; extend grant support including payroll support to the Hospitality industry and related services; deferred payment of taxes and filing dates; one-year waiver of Land Use Charge and LASAA Advertisement Rates [Applicable to Lagos State]; one Year waiver for Hotel Renewal Fees and other state levies and fees for Hotels and Resorts; one-year waiver of Local Government fees and Permits; clear mandate to the Federal Ministry of Tourism and its state counterparts to ensure the realization of the foregoing deliverables”.

Yusuf also said “It is in the interest of the economy for the hospitality industry to be supported by the federal and state governments to recover form the devastating shocks inflicted by the Covid 19 pandemic and the associated containment measures. 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 has employment elasticity.  The shocks inflicted on the sector by the Covid 19 pandemic and the associated containment measures have been most devastating on the sector.  A complementary sector of the economy- the aviation sector – was equally negatively impacted.  There is also the collateral adverse impact on thousands of small businesses that are dependent on the hospitality business as suppliers or service providers.  Poultry and fish farmers, for instance, have lamented the impact of the downturn of the hospitality business on their sales and profitability.  

“The hospitality sector and restaurants are the biggest off takers of the poultry and fish products in the economy.  The food and beverages sector experienced similar fate.  The breweries and bottling companies have suffered a major hit as a result of the stumbling fortunes in the hospitality business.  The sector is a one with diverse linkages across many sectors of the economy which explains the secondary transmission of the shocks to many other segments of the economy. The value of the hospitality sector in Nigeria was estimated at N1.4 trillion as at 2019.  Hundreds of thousands of jobs are currently at risk if an urgent rescue plan is not put in place for the sector.  This is not a sector that should be allowed to go under.  This underscores the need for the government to mainstream the hospitality sector in the Economic Sustainability Plan [ESP].  There should be specific intervention measures for the sector as done for the 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”. 

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