Analysts warn October 1 protests may further strain Nigeria’s fragile economy

As youth groups prepare for nationwide protests on October 1, analysts and industry experts are raising concerns about potential disruptions to business and the broader economy.

The protests, scheduled to coincide with Nigeria’s Independence Day, are expected to unfold in major economic centers such as Lagos, Abuja, and Port Harcourt, heightening fears of disruptions to business operations, supply chains, and economic stability.

Youth activists are protesting against the government’s failure to address pressing issues like unemployment, insecurity, and poor governance. Experts caution that these demonstrations could pose serious short-term risks to businesses and hinder ongoing efforts to revive the country’s fragile economy.

Dr. Muda Yusuf, a leading economist and former Director-General of the Lagos Chamber of Commerce and Industry (LCCI), pointed out that while protests are a legitimate form of expression, the timing could hurt Nigeria’s fragile economy.

“The economic implications of these protests cannot be overlooked. When businesses close or are disrupted due to security concerns, it leads to direct losses in revenue, especially for small and medium enterprises (SMEs), which are the backbone of the Nigerian economy,” Yusuf explained.

He noted that cities like Lagos and Abuja are vital to Nigeria’s commerce and trade activities. Any significant slowdown in these cities could affect key sectors such as retail, transportation, and services.

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Yusuf also highlighted the ripple effect on supply chains, especially as many businesses rely on timely logistics for operations.

“Even a short disruption in major commercial hubs could impact supply chains and distribution networks, which are still recovering from past shutdowns and the impact of COVID-19.”

Some financial experts have also expressed concerns about how the planned protests could impact investor confidence.

Nigeria’s stock market, already facing volatility due to global economic conditions and domestic inflationary pressures, could see further declines if the protests escalate or continue for an extended period.

Bismarck Rewane, a financial analyst and CEO of Financial Derivatives Company, warned that unrest often triggers panic among foreign and local investors.

“Political instability or social unrest is one of the top risks for investors. If the protests spiral out of control, we could see a sell-off in the equities market, as well as a dip in investor sentiment,” Rewane stated.

He added that although Nigeria’s financial system has resilience, any significant disruption in major cities could lead to temporary withdrawal or suspension of transactions by businesses.

“Banks may close branches in areas affected by protests for safety reasons, and this could hinder financial activities, especially for local traders and businesses dependent on daily transactions.”

Industries such as transportation, retail, and manufacturing could also take a hit if the protests lead to road blockades or a general shutdown of activities. The transport sector, already grappling with high fuel costs and infrastructure challenges, is particularly vulnerable to disruptions.

“Transport and logistics are critical to the movement of goods and services in Nigeria, and protests often result in road closures, leading to significant delays. This could further increase the cost of doing business,” said Gbenga Adeoye, a logistics expert and CEO of Abeokuta Transport Solutions.

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He cautioned that repeated disruptions could make Nigeria less attractive as a business destination, especially for industries heavily reliant on smooth logistical operations.

The retail sector, which includes a large number of informal traders, is also at risk. Street markets and shops could be forced to close, leading to loss of income for traders. In a country where much of the population operates in the informal economy, this could have immediate effects on household incomes and consumer spending.

The manufacturing sector, which depends on the seamless movement of raw materials and finished goods, may also feel the pinch. “Factory operations in Lagos and Ogun states could be interrupted if the protests lead to road closures or security lockdowns. This could result in production delays and unmet delivery schedules,” explained Adeoye.

While experts acknowledge the right to protest, many believe the government must ensure that such demonstrations do not escalate into violence or cause unnecessary economic harm.

Professor Uche Uwaleke, a development economist at Nasarawa State University, called for a balanced approach, saying that while it is essential to allow citizens to express their grievances, economic stability should not be jeopardized.

“The youth are raising legitimate concerns, but if protests become violent or disrupt critical sectors of the economy, it could set back progress on development goals. The government should create channels for dialogue and work towards addressing these issues without letting the economy suffer,” Uwaleke suggested.