The Impact of COVID-19 on the Nigerian Economy
The novel COVID-19 has shaken the world with great power, such that the world isn’t certain of how to attend to its cause. The Nigerian economy just like the rest of the world is feeling the dead weight of the virus from numerous dimensions. These dimensions are as discussed in the succeeding paragraphs. The Economy of Nigeria is known to be a mono-economy as a result of its huge dependence on a commodity to generate a large proportion of its revenue. The economy depends heavily on crude oil for revenue earning and worst yet, the crude oil does accounts for about 90% if not more of the revenue the economy earns. The pandemic has made the economy realize how faltering this is by causing the price of that resource to fall by about 73% within two months, this unarguably would result in drastic fall in the revenue made by the economy which has a linked effect on the nation’s Budget planning not surprising hearing news of budget reviews in order to be at par with the economic situation. To another dimension of impact, due to the nature of the novel coronavirus, the country just like others across the globe has made a lockdown order to mitigate the spread of the virus, the order thus disrupts economic activities of production and consumption of goods and services; in light of this, businesses both great, have been weakened and small on the verge of oblivion. Industries from aviation, manufacturing, transportation etc. in the economy are seeming to be folding-up, laying off staffs/workers, as well as falling into deep financial crisis they never envisaged would come due to the disruptions in economic activities as caused by the pandemic coronavirus disease with an unclear or unknown period of time. At the moment, the economy of Nigeria is experiencing the shock period, not clear of what is to come during the after-shock period. Succeeding the dilemma as discussed in the preceding paragraphs is the problem of rise in the level of unemployment. A whole lot of Nigerians have lost their jobs as business thrive to survive the condition, they either get laid-off or have their jobs suspended and their source of livelihood is truncated as they can no longer earn some or income to cater for their daily bread. This problem is so pronounced in the Nigeria economy because a larger proportion of its population depends completely on daily earnings to get their daily feeding. The pandemic has therefore made it extremely difficult for the people due to the lockdown policy imposed by the federal government on epicenter states in the federation, which spilled over to other states as their respective governors adopted the policy to allay the spread of COVID-19 in the country.
Provision of financial aids or non-interest loan to firms and business with good record of tax payment post-COVID-19 in order to help them remain strong as they thrive to survive the situation.
This would bring about shrinking of the GDP by a mammoth proportion, noting that the informal sector takes 65% of the nation’s GDP. Distraught is another issue which really affects the people in the economy, due to the pandemic, the prices of goods and services has been hiked drastically to the amazement of people. This implies that the value of many has fallen and hugely as a basket of commodity has had its price increased by 100% if not more a precarious situation detrimental to the people who has had their sources of earning taken out by the pandemic. Logically it would be difficult for the buying and selling of essential food commodity needed by the people since they would need more money to buy the same quantity of goods in spite of their having inadequate cash at this period of time. Without remorse, it could be stated that is necessary and vital for the budget to be adjusted. Reason being that the economic situation as caused by this pandemic drives home the point of federal government re-structuring its revenue and expenditure in order to strike a balance that would cushion the effect of these impacts caused by Covid-19 on the economy. It is vital for the federal government to channel its expenditure to more important segments of the economy, noting the huge plunge in revenue accruing to the country. The complexity of the ongoing situation makes it difficult to have a specific-general solution to the problems the economy faces, but on a wise turn, the government would need to take up some actions and policies at this emergency period to mitigate these problems. A few of such actions includes: Strategic touting of potential patronizing nations of our crude oil in order to ensure sales and inflow of revenue to a good degree. To seek for debt relief from international organisations and advanced nations (especially the G20), in order for the monetary resources available in that channel to be used up for necessary things during this period as the country manage the little resources available. This cannot be entirely focused on though. Federal government should quite payment of allowances to workers, senators and ministers for the moment while this lasts but salaries must be fully paid as they work on and the money obtained from this medium can be used for the course the economy fights. The granting of 60% reduction in tax or tax holiday to firms and businesses operating in the country but especially those of indigenes of the country. Provision of financial aids or non-interest loan to firms and business with good record of tax payment post-COVID-19 in order to help them remain strong as they thrive to survive the situation. Selection and Organizing selected farmers, markets, agro-allied companies and necessary distribution channels across the federation, that would be in operation technically in order to ensure adequate food supply, which would help tame high cost of food prices which might linger for long as this condition persists.
My name is Oladapo Obafemi Benson. I am a male by gender and a graduate of Nigeria certificate in education (NCE); from Michael Otedola College of primary education (EPE), Lagos state, where I studied Economics/computer science as combined courses.