BY :Ogunjemilua Oluwafemi David
The eruption of coronavirus has birth a global concern, On 11th February, the noble world health organization named the disease that has been ravaging the world since the late December 2019 COVID-19. Furthermore, WHO declared the infectious disease as a public health emergency. Prior to the outbreak of this pandemic in a seafood market located in the city of Wuhan, Hubei Province, China. The 2019 novel coronavirus was detected in 44 case-patients with pneumonia with unknown cause between 31 December 2019 to 3 January 2020 by the Chinese authorities. There is no gainsaying in the fact that this outbreak of this pandemic has disrupted the world economy and its economic impact is highly uncertain. Furthermore there is no iota of doubt that COVID-19 pandemic coupled with global oil prices shock is pernicious to the global economy.
Nigeria is currently facing an economic and health crisis, this crisis is such convoluted such that it is capable of reversing the growth and development progress. It is however imperative to note that the world economy is expected to enter a recession, reflecting widespread disruptions from the COVID-19 pandemic. Global growth is projected to plummet from 2.9 percent in 2019 to −3.0 percent in 2020, far lower than during the 2008–09 global financial crisis. According to IMF, growth projections for Nigeria economy for the year 2020 is expected to be contracted by 1.6, Conversely, Nigeria’s economy is projected to rebound by 2.4 percent in 2021.
Prior to the outbreak of COVID-19 Pandemic, Nigeria government have implement some measures in containing the transmission of this pandemic. It is important that Nigeria likewise government of various countries have advanced various measures in preventing the outgrow of this global pandemic by implementing various measures like social distancing quarantine measures, provision of facemasks, hand sanitizers, stimulus and relief funds. However, the consequence of this global pandemic will be evident in the socioeconomic group that is adversely affected by this pandemic in an assorted way. It is important to understand the consequences of this present pandemic and to predict the effect of this pandemic on the socio-economic forces in the society.
The number of confirmed cases of COVID-19 pandemic is increasing exponentially in Nigeria, this is attributed to the violation of the measure advanced by the government, the low numbers recorded so far could be linked to minimal capacities for testing and reporting cases. However, the health impact of the COVID-19 pandemic in Nigeria is still capricious, the consequences posed by this pandemic is indirectly goes beyond health already bringing a heavy toll. These heavy toll include loss of income and livelihood, Insecurity of food , lack of medical supplies, difficulties in applying sanitary and physical distancing measures, a looming debt crisis coupled with a political crisis.
The effect of pandemic on oil dependent country like Nigeria is severe, Oil prices have declined further thereby convoluting policy making environment. It is important to note that Nigeria as a country was not prepared to handle COVID-19 and its fallouts. In the same vein, Nigeria’s external reserves and exchange rate has been contracted coupled with 1.7% increase in inflation. Nigeria capital importation is completely down resulting from the consequences of this global pandemic. In February/March 2020, there was a devaluation in the Nigeria currency, The implication of this monetary policy is terms of unemployment market, security and social unrest.
Nigeria government needs to do policy prioritizing by makings difficult decisions regarding containment and mitigation measures aimed at limiting the spread of the disease and minimizing the strain on already fragile health systems which include stringent border closures, bans on public gatherings, school closure and remote work system, The eruption of this pandemic will hit the banking sector enormously. I therefore give the following recommendations to Nigeria government in savaging the economic downturn resulting from COVID-19 pandemic. Firstly policy makers should focus on the SMES. Because this constitutes the informal sector of the economy and they contribute greatly to the gross domestic product, Furthermore, Monetary stimulus can play an important role in containing the economic fallout. This will help to cushion the effect of external shock, Policy makers should target building resilience, restoring growth to create jobs, and achieving other sustainable development goals. Furthermore CBN is expected to maintain the balance between preserving financial stability, maintaining banking system soundness, and sustaining economic activity. Banks should be encouraged to use flexibility in existing regulations and undertake prudent renegotiation of loan terms for stressed borrowers, especially SMEs that lack resources to withstand a sharp temporary shock. Supervisors should provide clear guidance on loan restructuring and work closely with banks to ensure that such actions are both transparent and temporary.
Ogunjemilua Oluwafemi David
+2348145550690
Ogunjemiluaoluwafemidavid@gmail.com
Nice write up
ReplyDeleteVery insightful
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