The Possible Effects Of The COVID-19 Pandemic On The Nigerian Economy - Oluwaseyi Duracell

By Bright Olorungbotemi


Since December 2019, as a result of the intransigent spread of the novel Coronavirus, over 75,000 people have died. The acerbity and frightening levels of the spread incited the World Health Organization to label the coronavirus outbreak "Pandemic".

According to WHO, 211 Countries and territories have been affected, over 1,358,000 people have been infected and more than 75,000 people killed. Nigeria, the most populous black Nation is among the 211 Countries affected, VOICE AIR MEDIA reports.


Aside the monumental and cataclysmic loss of human life, the coronavirus pandemic is believed by many to leave a pernicious footprint on global economies. Trades between countries have been halted, movement of persons have been restricted, flights in and out of Countries have been suspended indefinitely, no thanks to the pandemic.


However, despite recording less than 250 confirmed index cases, Nigeria is expected to be hit harder by the the outbreak. Experts predict the country might slip into recession after the world has eventually recovered from the crisis.


EFFECTS ON ECONOMIC GROWTH
For a country, that depends solely on crude oil couple with a southward movement of oil price to $27 per barrel, which is way below the country's benchmark of $57 per barrel a downward review of the 2020 budget is necessary.


As projected, the Federal Government, through the Minister of Finance said a reduction in the 2020 budget is necessary to reduce the expenditure of the government. The cut mostly will affect non-critical expenditure. Also, Nigeria foreign reserve have dropped from $45 billion to less than $30 billion. This means fewer dollars will be available to import goods. The fact that the Federation Account Allocation Committee (FAAC) could not agree on the percentage for sharing confirmed the negative impact the pandemic is having on the nation economy.


FISCAL
Revenues generated would decline drastically due to the the lockdown and work-at-home policy of the government. However, to meet the demands of citizens, governments expenditures will have to increase. In one way or the other there is need to give palliatives to the poor and vulnerable Nigerians as a way to cushion the threats  the crisis could pose.


LOCAL MARKETS
Productions of locally made materials have been negatively affected as there is a disruption in supplies of raw materials. Nigerian Manufacturers are beginning to show their discontentment about access to raw materials needed for productions. All these are borne out of the fact that China- a major supplier of inputs for manufacturing in the world- is among the countries heavily affected by the outbreak.


TRADE AND TRANSPORT
To contain the spread of the virus, Government have advised their citizens to practice social distancing and also implemented lockdowns in areas where risks of infection is high. States like Lagos, Ogun, Rivers, Kaduna have imposed stringent restrictions on vehicular and human movements, including borders closure. Also, according to Civil Aviation Authority, international flights would be restricted into Nigeria. These measures will have significant impacts on trades done locally, services of airports taxi operators. While the aim of the restrictions is to mitigate the spread of the virus, revenues generated by government have reduced drastically.


While government is working resolutely to reduce the spread of the virus, business owners too did not fail to contribute their quotas. Although steps taken so far in Nigeria and some other countries are positive ones which will help to subdue the impact of the virus on the Economy and human, however, it's apposite to understand there should be no room for complacency. They must continue to take proactive measures to successfully assuage the spread of the virus.


In the meantime, to defeat the devil that is presently tormenting the world, the global community must come together to conjoin and assist each other. This trying time should serve as a reminder that countries are concomitant. They should bear in mind that until every nation is safe no nation is safe.