People & Money

The Half-Open Economy: Five Rapidly Disappearing Jobs

 A hotel bed is said to keep about 8 people employed – cleaners, waiters, laundry room staff etc. How many people does a table at the various businesses selling beer, wines and spirits and assorted accompaniments ranging from suya to peppersoup employ? Variously named joints, bars or clubs, dozens of these businesses where Nigerians relax after work can be found in every Lagos neigbourhood from the upscale to the shabbiest. The modest jobs they support – cleaners, bartenders, servers, cooks  etc. must number in the millions. Incomes derived from these jobs have been almost completely wiped out during the coronavirus lockdown and curfew as it is impossible to serve Heineken or a bowl of nkobi while working remotely. According to the U.S Department of Labour Statistics, bars and restaurants alone account for 60% of the jobs lost in March 2020 in the United States of America as a result of coronavirus restrictions. Figures for Nigeria are lacking, but according to Nigeria’s Bureau of Statistics, the tourism and hospitality sector accounted for 30% of Nigeria’s GDP and 20% of employment creation in the country in 2017. This is an indication of the incomes that have been lost in the sector as Nigeria shuts down establishments in the sector to curtail the spread of the coronavirus. We take a look at other jobs that have been hit particularly hard.

  1. Hotels: Great and modest establishments have been affected in various ways. Even before the lockdown was imposed on Lagos, Abuja and Ogun States on March 29, 2020, big international hotels had been losing clients as foreign business people cancelled trips. By the end of the first week of March, the threat the new coronavirus pandemic posed to health in the west had become very clear. By mid-March, the big hotels had cut the hours and thus the incomes of employees by 50%. The incomes completely disappeared when the hotels closed as the lockdown was imposed.

The hotel manager at Baystars Hotels and Gym Ijaiye-Ojokoro said investors and various businesses in the hotel value chain have lost a lot of money during the lockdown. He said that people who patronized the hotel’s bar in the evening and during weekends are the major sources of revenue. The hotel has had to lay off about 45 workers, virtually all its staff.

  1. Gyms: Fitness centers are places where people work out in close proximity with a very high possibility of exchanging all sorts of bodily fluids. People don’t need to be convinced to stay away. The business is virtually dead. As the lockdown eases, bars and restaurants could sell drinks and food to be taken away, gym services have to be used in situ. Gym operators have had very little choice but to lay off staff. Many are not even renewing property leases.
  2. Event organizers: Lagos folks like parties, so being an event organizer is a good business, until the coronavirus pandemic. Even if anyone thought it was a good idea to organize a small party, the Lagos State Government production, Jenifer in Court, provided a cautionary tale. In 2013, the Lagos State Government carried out a study of Lagos party scene in five local government areas (Agege, Mushin, Ifako-Agege and Ikeja) that 1,555 parties were held on three weekend days (Friday, Saturday and Sunday). Based on the analysis of expenditure during the 12 days, the Government found out that Lagosians in these local governments spent N36 billion ($226,415,094) per annum on parties. This is today about N95,094,339,622.

An Ikeja-based events planner told Arbiterz that she often organises about five parties every month, making an average of N400,000 on each.  The people who were consulting her about parties have put the plans on ice while she has had to refund money to those who had paid in advance for her services but were yet to have their parties before the lockdown. She is worried about how her staff are coping. She had to lay off everyone and only sends them stipends once in a while.

  1. Tailors: The Lagos Study found that partygoers spent N1.2 billion on aso-ebi, the mostly ankarra (Dutch-wax) materials that are worn by celebrants’ friends. That is about N3.1 billion today. Aso-Ebi is a major source of income for a lot of tailors in Lagos and beyond. The lockdown and continuing restrictions on large gatherings have destroyed this line of business. Mrs. Anike Bankole, a tailor who operates from Lagos Island, relies on aso-ebi for more than 80% of her income. She has had to switch to sewing facemasks which she sells to vendors in bulk at the N50-N100, depending on the kind of material used.
  2. Private School Teachers: There are over 6,000 private schools in Lagos. The schools are collectively the largest employer in Lagos State, providing jobs for more than 180,000 people. Most of them are “low-cost”, serving the children of low-income Lagosians more than elites, so they have very low margins. Even the elite schools have cut fees from around N200,000 to about N30,000 along with teachers’ salaries as they switch to teaching via Zoom and Google Classroom. This isn’t an option for the majority of the private schools; they have simply stopped teaching and stopped paying staff.

As Lagos reopens its economy, there is hope for some of these businesses. The State Government will be rolling out register-to-open initiative as part of the plans that will enable it to access the level of readiness of the players in the identified sectors for supervised operations. This means all players in the restaurant business, event centers, entertainment, malls and cinemas will go through a form of re-registration involving space management criteria. Officials from the Lagos State Safety Commission (LSSC) and Lagos State Environmental Protection Agency (LASEPA) will visit business places to assess their level of readiness to safely reopen.  Arbiterz will also visit some businesses to see how safely or smoothly the exercise is going.

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