Governor Babajide Sanwo-Olu of Lagos State has assured that despite the effects of COVID-19, the state government would not touch workers’ salaries, even as the weeks of inertia in the economy had made significant impact on Micro, Small and Medium Enterprises (MSMEs).
He said millions of small-scale businesses operating in the state could completely fold up if the economy is not fully reactivated.
Sanwo-Olu who spoke at a webinar organised by First Securities Discount House (FSDH) Group, noted that in addition to granting three-month moratorium to MSMEs that applied for loan facilities at the Lagos State Employment Trust Fund (LSETF), the state government had started to compile data of registered MSMEs for operational support to cushion the effect of the slowdown.
The governor was a panelist in an online discussion that featured the governors of Kaduna and Edo states, Mallam Nasir El-Rufa’i and Godwin Obaseki.
Sanwo-Olu spoke of the state government’s conversation with big corporations in various sectors on the requirements they may want from the state to ensure that they do not retrench staff.
“The companies have given us a retinue of incentives they want us to give and these are the things that will affect the state’s Internally Generated Revenue (IGR). We are willing to make this sacrifice to prevent loss of livelihood for millions of our citizens,” he stated.
Responding to a question on the consequences of COVID-19 on the state’s economy, Sanwo-Olu said: “Lagos has been affected both on healthcare and economy. We have had to take a deep dive into our budget and have about 25% cut, which is not very good number for us.
This is the time we need to continue to spend to stave off pressure on our citizens. However, we need to be prudent at this time and cut unimportant expenditures.
Salary is one thing we cannot even touch. In terms of direct economy, entertainment industry, hospitality, land transportation and aviation businesses have been affected significantly.
“These sectors are large employers of labour. We are thinking through on how to reset these sectors in a gradual manner and bring back the economy on the full swing.”