The Nigerian economy has been hit hard by COVID-19 and could plunge the country into its second recession in 5 years if measures are not taken. The pandemic has positioned many Nigerians in a state of confusion, and it creates anxiety as people are staying at home with no access to food and lack of savings to depend on, people must go out every day before they earn basic subsistence.
The world is in a state of turmoil as many lives continue missing within a short time, humanity has faced a shock and pandemic challenge that will remain in the history of mankind, the world will never forget the ends year of 2019, where numerous cases of virus surfaced in China, which is called coronavirus, this pandemic has eliminated everything that humans normally do. coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered virus. The virus infected almost 4 million people worlwide, and it killed more than 270,000 people. Due to the persistent global upheaval, many countries have lost a large portion of lives and properties, revenues, debts, donations, status, and power. The pandemic has ravaged numerous countries with a high comparative advantage in international trade, and it forced a lockdown measure to prevent people from spreading the virus to each other.
The World Bank’s recent Africa’s Pulse report found that COVID-19 is likely to drive Sub-Saharan Africa into its first recession in 25 years, with growth potentially falling as low as negative 5.1% in 2020. The crisis is likely to push many people into poverty. Food protection is at risk due to disruptions, a decrease in agricultural production, and fewer food imports. With almost 90 percent of Africans getting income from informal jobs, it is more difficult to attain workers with the help they need. African nations need sources and assistance to combat this pandemic and to protect lives and livelihoods. According to a new study by the African Union (AU), COVID-19 could cost Africa $500 billion, damage tourism and aviation sectors, and up to 20 million jobs in the formal and informal sectors in Africa could be lost because of COVID-19. This shows how the pandemic is seriously threatening the African economy.
Coronavirus pandemic in Nigeria has come a long way and laid the genesis for the government to adopt the safety measures, consisting of social distance and lockdown to curb the spread of the virus within the country. This is the reason why it is forbidden to travel in some parts of the country, as the government's commitment to restrain the pandemic from spreading. But people are in shock as the lockdown prevents them from their daily activities. It has positioned many Nigerians in a state of confusion, and it creates anxiety as people are staying at home with no access to food and lack of savings to depend on, people must go out every day before they earn basic subsistence. This has led many people to lose interest in the campaign for fighting the pandemic because Nigerians are suffering from starvation not only the coronavirus.
Nigerian economy recovered from the recession in 2016 even though the country remains unresolved, and the contemporary crash in oil prices due to Covid-19 poses an existential challenge for Nigerian oil depending economy. The coronavirus pandemic has emptied cities around the world, inflicting a historic drop in oil demand simply as production was heading in a new direction. The government made a 2020 budget primarily based on an anticipated oil price of $57 per barrel, however, the shrinking in the price of the Brent benchmark crude has compelled the Nigerian government to revise this to $30 per barrel, forcing the federal government to reduce the quantity of federal funding for upstream projects. However still, the value of crude oil is crashing down globally and if Covid-19 continues pushing oil prices lower than Nigeria’s budgetary benchmark, the country may lose more than $9bn. Thus, the economic instability due to the COVID-19 outbreak could plunge Nigeria into its second recession in 5 years if measures are not taken.
Based on BBC report each 4 out of 5 people’s jobs hit by the coronavirus pandemic and a total of 81% of the global workforce of 3.3 billion people have had their workplace fully or partly closed. Nearly 200 million people could end up out of work, and the risk sectors include retail, manufacturing, accommodation and food, transport, entertainment, finance, construction, agriculture, health, and education. In Nigeria, a country of 200 million people closed its airports since the global lockdown went into effect, this caused the Nigerian travel industry to lose huge revenue and thousand jobs. The International Air Transport Association reported that the disruption to air travel due to the continued spread of coronavirus could lead the country to lose approximately 2.2 million passengers, this will cost Nigeria’s aviation industry over 160.58bn Naira (using Bureau de Change rate of N370 to $1), ($434m) in revenue and 22,200 jobs.
Due to the effect of COVID-19 on Nigerian major trading countries such as China, Spain, Netherlands, United States, India, Italy, and France, there has been a decline in the volume of import and export cargoes. The level of imports arriving in Nigerian ports is gradually dropping while export to many countries is becoming less frequent, this is because the COVID-19 have deterred oil tankers, container ships, bulk carriers, cruise liners, and alike from stopping at the nation’s harbors. Many multinational companies and businessmen in Nigeria are scared to take any consignment from their trading partners as there are more barriers to international trade. The federal government’s plan to meet its target by generating the sum of 2 trillion Naira from the maritime industry is being threatened due to the outbreak of the coronavirus pandemic.
Panic continued at the Nigerian Stock Exchange (NSE) with the marketplace capitalization dropping to billions of naira which attributed to fear of uncertainties within the market. Specifically, the Nigerian Stock Exchange on 25th March has declared the brief closure of its trading floors and far-flung trading engagement because of the COVID-19 outbreak. As the CEO of the Nigerian Stock Exchange, Oscar Onyema cited that the choice has become imperative because of the current level of the virus spreads within the country. All the buying and selling flooring will be temporarily closed, even though remote trading will be holding and Nigerian stock exchange workers can be available via all NSE digital platforms to offer assistance. Investors are currently anxious about the COVID-19, this fear has led to expanded volatility in the Nigerian stock market as investors scramble to modify their portfolios, which also have an impact on asset prices and the Nigerian economy.
There are around 2 billion people who accounted for 61 percent of the world’s working population under the informal economy; they have nothing to rely on if they are unable to go to work. While in Africa 86% of employment is informal, according to the International Labor Organization (ILO). In Nigeria, despite the statement announced by the central bank of Nigeria on a credit relief of $136.6M to businesses affected by the COVID-19 pandemic. However, many businesses are nevertheless collapsing; many workers in the informal sector are having a much wider economic effect. People are unable to work from the comfort of their homes and they need money or basic subsistence to survive. Some private organizations started recording lost and they have to retrench workers, cut their wages, or stop payment of the wages/salaries, the more affected employees are from private schools, banks, hotels, restaurants, cinemas, construction companies, transportation companies, retailing industries, and so on. The Nigerian economy has been hit hard by the coronavirus pandemic and affected many workers’ welfare.
More than 1.5 billion learners are presently affected worldwide because of school closures in response to the COVID-19 pandemic. The School closures affected not only government, private schools, teachers, students, academicians, and concern families, but have repercussions on education, economic, social, and cultural segment of the society. Many school systems are turning to technology as the best alternative, classes have gone online in many countries, but the current situation imposes immense challenges for Nigeria to be able to provide uninterrupted learning for the students in an equitable manner. Nigeria is having a sequence of problems that hinder the country to manage online classes This has caused serious damage and delay in the whole country’s education sector ranging from primary schools up to tertiary institutions.
Nigeria’s health sector is among the weakest in the world, even though the country is regarded as the giant of Africa with the largest economy, the country's healthcare account for less than 5% of the budget, and the doctor-to-patient ratio is 1 doctor per 2,500 patients. The COVID-19 cases in Nigeria are approaching 4,000 with more than 100 deaths. Some public and private hospitals have begun to turn away patients and avoiding gathering of people on their surroundings due to the lack of capacity to carry out COVID-19 testing. Some of the isolation centers and hospitals are having inadequate Personal Protective Equipment, testing challenges, shortage of human resources, beds, drugs, ventilators, and many other items needed to fight the pandemic. Nigerian healthcare is seriously affected by the unprecedented pandemic of the coronavirus.
Based on International Monetary Fund estimation, Nigeria’s economy is expected to shrink by 3.4 percent this year and the country could face a recession lasting until 2021. Despite all of that, the Nigerian economy can be restored if good policies and implementation measures are adopted, but no one could bring back a thousand lives that could die if society fails to come together and fight the pandemic with immediate effects. This led to an urgent need for the Nigerian government, non-governmental organizations, local and international media, international agencies, national and multinational companies, health professionals, intellectuals, politicians, communities, and individuals to come together and fight the spreads of COVID-19 within the country, the Nigerian government should also learn a lesson and reduce immoderate dependency on oil revenue; it’s time to invest in other sectors for revenue generation and sustainable economic growth.
