Private sector estimates that 50 days of prohibitory orders cause loss worth 400 Billion

KATHMANDU: The coronavirus pandemic has crippled the economies of many countries around the world. Even the countries with strong economic foundations are in a state of turmoil at the moment and it is not new information that Nepal has also been shaken.

The first wave of coronavirus in Nepal crippled the country for months. At a time when people’s lives were at a standstill, the country’s economic growth was hit hard. Now, after the second wave of coronavirus, prohibitory orders have been issued in most places in the country.

At this time, the sale and distribution of non-essential services and products are closed. Economic activities are shrinking. Most factories are shut. 

How much economic loss is the country suffering due to this? No study has been conducted by the government. The private sector, however, has calculated a daily loss of Rs. 8 billion.

President of the Federation of Nepalese Chambers of Commerce and Industry Shekhar Golchha said that a loss of Rs. 8 billion is incurred when Nepal is closed for one day.

He said, “When it is closed for one day, the private sector suffers a lot. Tourism and transportation services have suffered the most.”

Golchha said that he was worried about how industries and businesses would recover after these industries that were closed in the lockdown were not fully operational and have been closed again.

“It has been 50 days since the prohibitory orders were imposed due to the second wave of the coronavirus. The daily loss is Rs 8 billion. Accordingly, it seems that there has been a loss of Rs 400 billion in 50 days.” 

The prohibitory orders that started on 24th March 2020 lasted for about nine months. Although the private sector has sought relief from the government saying that the ban has affected industries and businesses, the government has only partially addressed it.

It is unknown at this time when the prohibitory orders that began on 29th April 2021 will be lifted. Gradually, the coronavirus infection rate is declining. CCMC has recommended a smart lockdown, which has been issued.

Cement Industry

Chairman of the Cement Producers’ Association, Dhurba Thapa, said that the cement industry was incurring huge losses during the lockdown. He said, “Currently, 30% of the cement industry is closed. The remaining 70% of the industry is operating at 20-30% capacity.” 

According to Thapa, the cement industry will have to bear a loss of Rs 500 million if it is closed for one day. In this regard, the cement industry has incurred a loss of Rs 25 billion during the current prohibitory orders. 

Transportation 

Transportation is also the area most affected during the lockdown. Due to the prohibitory orders, all public transport vehicles are restricted from moving and giving services.

President of the National Federation of Nepali Transport Entrepreneurs Yogendra Karmacharya said that the transport sector faced the most problems due to the past and present lockdown.

He said, “There are about 300,000 in total buses, microbuses, taxis.” If we calculate the daily loss at the rate of Rs 1,000 for buses and other small vehicles, the daily loss is Rs 300 million. Accordingly, it has incurred a loss of Rs 15 billion in the last 50 days.” 

Employees said that there was a daily loss of Rs 300 million even in the previous lockdown. 

Construction sector

Apart from some big construction projects, many are closed during the lockdown. President of the Federation of Construction Entrepreneurs of Nepal Ravi Singh said that a daily loss of Rs 230 million is being incurred. He said that development work is lagging behind due to non-continuation of construction work, and that unemployment has also increased. 

Hotel businesses

The hotel business is facing the most loss due to COVID-19. The worst hit sectors are transportation and hotels.

Binayak Shah, Senior Vice-President of the Hotel Association of Nepal (HAN), said that the hotel sector is running a daily loss of Rs 66.6 million.

“This time, with the prohibitory orders in place for 50 days, the sector has incurred a loss of Rs 3.33 billion,” he said. 

Of the tens of thousands of hotels in Nepal, 4,000 are connected to HAN.