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THE IMPACT OF COVID-19 ON THE NIGERIAN ECONOMY AND THE WAY FORWARD

THE IMPACT OF COVID-19 ON THE NIGERIAN ECONOMY AND THE WAY FORWARD (1)

1.0 INTRODUCTION      

   COVID-19 is a novel virus that originated in Wuhan, China, in December 2019. It has affected over 18, 000,000  people worldwide.The virus has jolted the world economy bringing business activities to theirknees. According to an estimate, the International Monetary Fund projects that Nigeria’s economy will contract by 3.4% in 2020 as many would be left unemployed pushing millions into poverty and hunger. For Nigeria, a country still grappling for recovery from a recent economic recession, the catastrophe of COVID-19 has exacerbated her economy.

2.0 THE IMPACT OF COVID-19 ON THE NIGERIAN ECONOMY

Sadly, the outbreak of the virus has put the world economy in survival mode as the spread is hurting trade, travel and supply chains worldwide. The economic rampage of the virus is also a quandary in Nigeria as legion of public sectors and private enterprises are not left unscathed. Tourism, stock markets, entertainment, schools, etc. are the worst hit.

2.1 THE STEEP DECLINE IN THE GLOBAL OIL PRICE

Nigeria is the largest oil producer in sub-saharan Africa accounting for 70% of government revenue which saw its contribution to the Gross Domestic Product growing by 5.1% in 2019. For the oil and gas industry in Nigeria, the impact of COVID-19 has been most felt in the steep decline in the demand for crude oil resulting from restrictions on economic activities, vehicular travel, air travel, etc. Therefore, federal authorities have lowered Nigeria 2020’s budget estimate from #10.594 trillion to #10.276 trillion after the government’s oil benchmark of $57 per barrel was slashed to $30 per barrel.

2.2 THE CRISIS OF JOB LOSSES

The heartbreaking upsurge in the cases of job losses now grows like the fire in the harmatFORWARD

e relationship between unemployment and economic growth is intertwined. According to a maiden report of COVID-19 impact monitoring survey recently released by the National Bureau of Statistics, the impact has been widespread as 42% of the respondents to the survey have lost their jobs in Nigeria. A software talent company, Andela, laid off 135 employees in Nigeria and three other locations as COVID-19 rocks userbase. One version of Okun’s Law in economics states that when unemployment rises by 1%, it causes a 2% fall in a country’s GDP. Undoubtedly, the astronomical progression in job losses occasioned by COVID-19 is a debacle to Nigeria’s economic growth.

3.0 THE WAY FORWARD

However, despite the tragedy that has trailed the Nigerian economy, the need for strategies to combat the challenges is nonnegotiable, focusing on Nigerian economic revitalization.

Firstly, agriculture remains the key to Nigerian economic diversification strategy. The Nigerian government is at a crossroads to avail farmers with stimulus packages, as a backup to the fall that has bedeviled oil price, to fuel sustainable productivity that will have reciprocal effects of strengthening Nigeria’s GDP and alleviating food insecurity.

Secondly, small and medium scale enterprises (SMEs) have been oiling Nigerian economy through job creation and revenue generation, the nationwide lockdown has disrupted their activities. The CBN and other financial institutions in Nigeria are obliged to advance non-interest loans to them while COVID-19 lasts to keep them afloat, improve their productive efforts and curtail layoffs. 

4.0 CONCLUSION

It is evident that the C0VID-19 pandemic has threatened many sectors of social wellbeing and economy in Nigeria calling for strategic responses to cushion its effects in the nick of time.

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Written by Jamiu Ridwan

I am Ridwan Adeniyi, a third year Law undergraduate of the Faculty of Law, University of Ilorin, Nigeria where I currently serve as a Judge of the Law Students’ Society Court. Writing, for me, is a powerful mechanism to effect positive social changes. I have a keen interest in Intellectual Property Rights, Dispute Resolution, History and African literary works. I am currently taking courses on IP rights.

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