IMPACT OF COVID-19 ON THE NIGERIAN ECONOMY.
|Corona virus disease 19 (COVID-19 originated from Hubei Province, Wuhan City, China in December, 2019 and is classified as a severe acute respiratory syndrome corona virus-2 (SARS COV2). It was declared as a public health emergency in January, 2020 and a pandemic on March 11, 2020 by the World Health Organization (WHO).|
It has impacted negatively on the socio-economic status of over 210 countries across the globe, including Nigeria, which has the largest economy in Africa since the year 2013.
Nigeria is ranked as the 22nd largest in terms of power parity purchase and the 27th largest economy in the world in terms of nominal Gross Domestic Product (GDP).
Since the first confirmed positive case of COVID-19 in Lagos, Nigeria on the 28th of February, 2020; COVID-19 has found its way across the states in Nigeria, infecting more than 1000people, with the two largest economic states in Nigeria: Abuja and Lagos, leading the highest number of cases in the country.
The enforcement of several rules and regulations by the government in Nigeria, including the shutting of all land and air borders, including international flights and total lockdown in some affected states has greatly affected the Nigerian economy, and experts predict that Nigeria may enter into recession again before the end of the year.
The Nigerian Stock Exchange has experienced several relapses. The price of crude oil, which is Nigeria’s most valued asset, has dropped remarkably due to the decrease in demand and increase in Nigeria-This has put the Nigerian currency rate exchange at jeopardy of gradually facing devaluation.
Due to the total lockdown, especially in the largest economic states such as Abuja and Lagos, many businesses are at the border of experiencing bankruptcy. The rate of unemployment, loss of jobs and poverty has risen due to the inability of some employers to pay all their employees as a result of decreasing profit and funds, thus sacking some employees to ease the financial burden.
Nigeria is a country blessed with many natural resources such as Tin, Gold, Iron Ore, Coal etc. apart from crude oil, which contributes about 9% of the country’s annual revenue. Focusing on other natural resources, as well as technology can be a better solution
Port-Harcourt, the oil capital of Nigeria, with Bonny as its oil starlight has been facing problems in exporting crude oil and its products to other countries since the arrival of the recent pandemic, due to global shutdown in transportation and the fall of the price of crude oil-This has caused a fall in Nigeria’s Gross Domestic Product (GDP), which was expected by Trading Economics Global Macro models and analysts expectation to increase by 420billion US Dollars by the end of the year 2020.
The United Nations Trade Development Agency estimated that over 20 trillion US Dollars has been spent globally to eradicate the current pandemic.
The total lockdown, however, has affected many businesses, which are now forced to migrate online, but those businesses, which cannot be managed online, such as transportation and those that add to the country’s annual revenue has caused a massive decline in the economic activities of the country. Also, the revenue gotten from tourism and foreign investors has declined due to the fear of the aftermath of the pandemic.
With the financial aid that is being received from various world organizations and philanthropists, Nigeria, however, is still trying to maintain its stand financially, but the rate at which the virus is spreading to various states and the high demand for medical equipment, such as personal protective equipment, ventilators, more bed spaces in isolation center, management and maintenance of isolation centers and also the recent agreement of the federal government to increase the hazard fee of health workers to 50% of their consolidated basic salary for the health workers working in government and public hospitals, as well as COVID-19 designated centers and 40% for the health workers working in non public hospitals, has led to reconsideration of the Nigerian government to review and amend the 2020 Budget,
Some economists have predicted that if the lockdown is extended for too long, Nigerian Government may have challenges in paying their workers, as well as providing life insurance for health workers and keeping up with the provision of medical equipments for the management of COVID-19 patients.
In a bid to prevent Nigeria from going into recession by the end of the year, some solutions need to be pondered on.
Since Nigeria has a high rate of poverty with over 77% of the population with increasing needs, the country might not be able to provide for all during the total lockdown. Relaxing the lockdown with strict adherence to several rules and regulations, especially practicing good personal hygiene, observing social distancing of at least 6feet or 2meters, avoiding overcrowding or congestion of people in public places and the use of protective face masks in public places, in order to enable some people to continue their businesses with ease can be one of the better solutions for preventing recession due to the economic crash.
Reviewing the year’s budget by the legislators and making some amendments in order of prioritization, in order to promote wise spending and preventing unnecessary loss of funds is also another solution.
Nigeria is a country blessed with many natural resources such as Tin, Gold, Iron Ore, Coal etc. apart from crude oil, which contributes about 9% of the country’s annual revenue. Focusing on other natural resources, as well as technology can be a better solution. If Nigeria can invest in all its natural resources, a fall in the price of crude oil will not affect its annual revenue and its Gross Domestic Product (GDP) would be massively increased by the time the pandemic is over.
Nigeria should also plan ahead to focus more on exportation than importation in order to boost the country’s economy.
My name is Ekene Nnagha. I am a 19-year old medical student at the University of Calabar, Cross Rivers State. I hail from Ideato North Local Government Area of Imo state. I am the last child out of seven children. My hobbies include Reading, Writing and Baking.