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Apart from the economic impact of COVID-19 on the Nigerian economy, especially the imposition of lockdown on many states and cities, Nigerians are more worried over the extra-judicial killings by security officers, who are engaged in enforcing the lockdown
By Goddy Ikeh
AFTER the coronavirus was declared a Public Health Emergency of International Concern on January 30, 2020, by the World Health Organisation, WHO, many international finance organisations and economists have come out with varied forecasts on the negative impacts of the virus on global, regional economies.
In its assessment, the World Bank said on Thursday, April 9, that sub-Saharan Africa could slip into its first recession in a quarter of century because of the coronavirus pandemic on the world’s most impoverished continent.
“We project that economic growth in Sub-Saharan Africa will decline from 2.4 percent in 2019 to -2.1 to -5.1 percent in 2020, the first recession in the region in 25 years,” the Bank said.
It noted that the virus has arrived late in Africa compared to elsewhere and that it is spreading rapidly in some countries, and the continent is highly vulnerable to declining trade and tourism as well as falling prices for oil and mineral exports, it said.
“The COVID-19 pandemic is testing the limits of societies and economies across the world, and African countries are likely to be hit particularly hard,” said Hafez Ghanem, the Bank’s vice president for Africa, said.
But the managing director of the International Monetary Fund, IMF, Kristalina Georgieva, said that the global coronavirus pandemic was causing an economic crisis unlike any in the past century and would require a massive response to ensure recovery.
In her preview of the spring meetings of the IMF and World Bank, which was held virtually due to the restrictions imposed due to the COVID-19, Georgieva warned that “global growth will turn sharply negative in 2020,” with 170 of the International Monetary Fund’s 180 members experiencing a decline in per capita income.
“In fact, we anticipate the worst economic fallout since the Great Depression,” Georgieva said, adding that even in the best case, the IMF expects only a “partial recovery” next year, assuming the virus fades later this year, allowing normal business to resume as the lockdowns imposed to contain its spread are lifted.
But “it could get worse,” and “there is tremendous uncertainty around the outlook” and the duration of the pandemic.
But what is worrisome to some developing countries, especially Nigeria is the impact of the measures imposed to slow the spread of the coronavirus are pushing its economy into sharp decline in productivity, jobs and revenues losses. The lockdown, which was imposed by Nigerian President Muhammadu Buhari on Abuja, Lagos and Ogun States on March 31 for two weeks and extended further for another two weeks, has not only grounded the economies of these states, it has raised security issues and the attendant human rights violations. The lockdown order has been copied and implemented in many states in the country thereby causing more hardships for the people.
For instance, the latest survey by NOIPolls Ltd on the impact of COVID-19 on Nigerians, revealed that 72% of Nigerians raised concerns over hunger caused by the lockdown order imposed by the federal government and some state governments.
The report of the survey released in Abuja on Tuesday, April 14, said: “It is encouraging to know that a substantial proportion of Nigerians believe that lockdown will help in controlling the spread of the disease. However, it is critical to address the concerns citizens have about the lockdown, which include lack of food for the poor (40 percent), that people will die of hunger (21 percent), of economic hardship (13 percent) and the survival of those whose livelihood depends on daily hustling (9 percent) amongst other concerns mentioned.”
“Government and well meaningful Nigerians should assist more citizens, especially the poor and those whose livelihood depends on daily income as pointed out in this survey, with more palliatives. This will not only ensure that Nigerians follow the stay at home directive, but will help control the spread of the virus in the country,” the report said.
In the midst of these frightening forecasts, the IMF also said that Nigeria’s economy would contract by 3.4% due to the impending recession that would be caused by the COVID-19 pandemic, while a rebound of 2.4 percent growth is expected in 2021.
However, the Nigerian government has been forced to take some measures to tackle the near financial crisis brought about by low international oil prices. Among the measures taken was the downward review of the country’s budget, reduction of the oil price from $57 per barrel to $30 per barrel, while seeking over $6 billion concessional loans from the World Bank, IMF and the African Development Bank.
In addition, the agriculture sector which has been the beneficiary of the measures taken to check the spread of coronavirus, COVID-19, may lead Nigeria to attain self-sufficient in food. According to the governor of the Central Bank of Nigeria, CBN, Godwin Emefiele, the federal government is committed to turn the lessons of COVID-19 into strong learning points that will help the country grow its economy. Recalling some of the giant strides attained in rice and fish production, Emefiele was quoted by local media reports as saying that “we can no longer ignore repeated warnings about the dangers that lie ahead if we do not begin to depend largely on what we produce locally, because the security and well-being of our nation is contingent on building a well-diversified and inclusive productive economy”.
Emefiele had in March, announced N100 billion loan support for health laboratories in the country. According to him, the apex bank has also increased its intervention in the manufacturing sector by N1 trillion. He also said that the CBN would create N50 billion fund for families and businesses affected by the lockdown.
The CBN boss also said that the apex bank would establish InfraCo PLC with combined debt and equity take-off capital of N15 trillion to solely focus on infrastructure development as the country works towards mitigating the impact of COVID-19 on the economy.
Presenting a 27-page policy response timeline document on Tuesday, April 14, Emefiele said that the three-year strategic response would guide the nation through this crisis and rebooting the economy.
“The CBN has issued a support guideline on low-interest loans to hospitals and the pharmaceutical industry, to immediately deal with the public health crisis caused by the COVID-19 pandemic.
“Under this immediate-term response, we have activated financial system stability by granting regulatory forbearance to banks to restructure terms of facilities in affected sectors; triggered banks and other financial institutions to roll-out business continuity processes to ensure that banking services are delivered in a safe social-distance regime for all customers and bankers; grant additional moratorium of 1 year on CBN intervention facilities, and reduce interest rates on intervention facilities from 9 to 5 percent,” the report by Channels Television quoted Emefiele as saying.
According to him, the 12-month short-term policy priorities which covers the establishment of InfraCo PLC, a world-class infrastructure development vehicle and a host of other initiatives will ensure that the value-added sector like the manufacturing industry, will be strengthened to reposition the Nigerian economic space.
“With the support of the Federal Government, the CBN will embark on a project to get banks and private equity firms to finance homegrown and sustainable healthcare services that will help to reverse medical tourism out of Nigeria; by offering long-term financing for the entire healthcare value-chain (including medicine, pharmaceuticals and critical care), banks will work with the healthcare providers to consolidate on the current efforts to rebuild our medical facilities in order to ensure Nigeria has world-class affordable hospitals for the people of Nigeria and those wishing to visit Nigeria for treatment,” he said.
On a three-year projection, Emefiele said that the CBN would act quickly to enable faster recovery of the economy for full business operation as the world returns to some new normal activities after taming the COVID-19 by a combination of vaccines and social distancing.
“Therefore, the CBN will consider an initial intervention of N500 billion over the medium term, specifically targeted at manufacturing firms to procure state-of-the-art machinery models that would fast-track local production and economic rejuvenation, as well as support increased patronage of locally processed products such as cement, steel, iron rods, and doors, amongst several other products.”
In the area of job creation, household incomes and economic growth, Emefiele said that the bank would be focusing on bridging the housing deficit in the country by facilitating government intervention in three critical areas, housing development, mortgage finance and institutional capacity.
The Nigerian private sector and individuals have been able to donate over N25.8 billion to Nigeria’s Private Sector Coalition Against COVID-19 fund to assist the government in providing palliatives to the people affected by the lockdown. Already, Nigerians have been protesting against way and manner the palliatives are being distributed so far and there is no assurance that this fund and the 50 euros donated by the European Union will be utilized to ensure that the poor people in the society benefit from such gestures.
There is no doubt that the measures and interventions announced by the CBN and the federal government are good on paper, but the challenge lies with the implementation, which is often a departure from the principle laid down for it. Another painful aspect of the lockdown is the increasing number of lives of youngsters lost daily through extrajudicial killings by security personnel, who are engaged in enforcing the lockdown order. According to a Lawyer and Senior Advocate of Nigeria, SAN, Femi Falana, the National Human Rights Commission should investigate the alleged killing of 21 persons by security forces during the COVID-19 lockdown.
– Apr. 18, 2020 @ 19:39 GMT |
A.I
Tags: Impact of COVID-19 on Nigeria Mixed bag of reactions to economic impact of COVID-19 on Nigeria WHO
