Nigeria loses 207 billion naira to fuel strike

The worst hit were the retail and oil and gas sectors.

Nigeria loses 207 naira billion to fuel strike
Hauwa Noroh Ali, Abuja

Nigeria's economy lost out on an estimated 207.4 billion naira due to an eight day strike this month prompted by a dispute over fuel import subsidies, the national bureau of statistics said on Wednesday.

“The real cost of any socio-economic disturbance is the tragic but avoidable loss of human life, the value of which cannot be accurately computed. In this brief, the NBS relies on the Gross Domestic Product (or GDP) to estimate the monetary value of economic activity “lost”during the period of the strike. In this regard, it is estimated that the nation lost N207,408.28 million during the eight-day strike” , the report said.

The biggest losses were sustained in the retail and the oil and gas sectors, a report by the bureau said.
“The sector which was worst hit by the crisis was the Wholesale and Retail Sector both with respect to absolute amount and relative proportion to other sectors, which recorded a loss of approximately N86,981.84. This sector accounted for 42% of the overall total loss in output during the period.”

This was followed by the Crude Petroleum and Natural Gas Sector, the largest source of government revenue accounting for N28,710.87 million, and 14% of economic losses. Next in line was Crop Production accounting for N15,220.37 million and 7 percent of economic losses during the period”, the report said .

Nigeria's consumer inflation edged down slightly year-on-year in December to 10.3 percent, from 10.5 percent the month before, it also said. Food inflation rose 11 percent in December, up from 9.6 percent in November, the bureau's data showed.

The NBS went on to say that “It is pertinent to state that the estimates are as stated “estimates” for three main reasons. Firstly, the NBS is in the process of rebasing the nation’s GDP estimates. This in turn could either increase or decrease the estimates produced in this report as the GDP rebasing procedure will require adjusting the weights of each component of the GDP estimates to reflect a more up to date representation of each sector’s proportion of the economy. Secondly, they are early estimates which are derived from projected GDP figures rather than actual surveys, and this has its inherent limitations.”

Significant losses

The statement explained that  “In particular, the rate of daily loss significantly affects the final estimates, although they are only, at best, estimates given our understanding of the economy, and feedback we received from sectional operators. Thirdly, the estimates do not include the actual cost of violence such as property destroyed.”

It continued,  “These costs can be considerably high in certain circumstances, particularly where violent demonstrations occur in large commercial cities. Lastly, the estimates do not capture secondary-level costs, such as employment opportunities lost.”

“However, it is expected that these estimates will be revised in the coming weeks as more information on the extent of compliance with the strike, and disturbance witnessed become available”, the statement concluded

Nigerian trade unions called off strikes and protests on Monday, ending a major confrontation over fuel prices after President Goodluck Jonathan said he would cut them by one third.

But a week of total shutdown was massively damaging to Nigeria's economy, especially in its two biggest cities of Lagos and Kano, where protests were most widespread.

"The sector, which accounts for about 18 percent of GDP, was worst hit by the crisis was the Wholesale and Retail Sector, which recorded a loss of approximately 86,981.84 million naira," the bureau report said.

"This sector accounted for 42 percent of the overall total loss in output during the period. This was followed by the Crude Petroleum and Natural Gas Sector, the largest source of government revenue accounting for N28,710.87 million, and 14 percent of economic losses," it said.

This was despite the fact that oil workers did not carry out a threat to shut down production. Most oil majors say their production was not affected during the strike at all.

President Jonathan reinstated part of a subsidy on petrol after Nigerians took to the streets in anger at an attempt on January 1 to scrap it completely, which doubled the pump price of petrol overnight to around 150 naira per litre from 65 naira.

The compromise, settling on 97 naira per litre, still slashes the cost of the benefit to the government and leaves the way open to talks on phasing it out again later.

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