With Ruth Richard
In December 2019, a virus surfaced in Wuhan, China. Based on initial laboratory findings, the disease named Coronavirus disease 2019 (abbreviated as COVID-19) was described as an infectious disease that is caused by the severe acute respiratory syndrome. The COVID-19 outbreak has since spread to about 196 countries across the globe, while there are efforts to curtail the spread of the infection, which is almost entirely driven by human to human transmission. It has accounted for over 3,589,263 confirmed cases and 248,847 deaths worldwide (according to worldometer).
Beyond the tragic health hazards and human consequences of the COVID-19 pandemic, the economic uncertainties and descriptions that have resulted, came at a significant cost to the global economy at large. For most developing countries, Nigeria inclusive, the odds of sliding into a downturn are gradually expected as the global Coronavirus outbreak puts severe pressure on the economy.
For Nigeria, the country is still sluggishly grappling with recovery from the 2016 economic recession which was a fall out of global oil price and insufficient foreign exchange earning to meet imports. In the spirit of economic recovery and growth sustainability, the Nigerian federal budget for 2020 fiscal year was prepared with significant revenue expectations but with contestable realizations.
The approved budget had projected revenue collections at N8.24 trillion an increase in about 20% from 2019 figure. The revenue assumptions are premised on increase global oil demand and stable market with oil price benchmark and oil output respectively at $19.32 per barrel and 2.18 million barrels per day. The emergence of COVID-19 and its increasing incidence in Nigeria has called for drastic review and changes in the earlier revenue expectations and fiscal projections. Compared to events that led to recession in 2016, the current state of the global economy poses more difficulties ahead as the oil price is currently at 19.32USD with projections that it will dip further going by the price war among key players in the industry.
In addressing these devastating economic challenges, the current consideration to revise the budget downward is inevitable. However, certain considerations that are expected in the review must not be left out. The government of Nigeria has been forced to shut down businesses, worship centers, public gatherings, land borders, airports, seaports, markets etc due to the ravaging effect of the pandemic. Corporate organizations have been downsizing their workforce due to the slow of business activities. Food items are on high demand but yet expensive for the common man to afford. The ban on interstate travels has made life unbearable for small scale business owners who need to travel to neighbouring states to restock their goods.
Furthermore, cutting expenditures must be done such that the already excluded group and vulnerable are not left out to bear the brunt of the economic contractions. The economic and growth recovery program which has the aim of increasing social inclusion by creating jobs and providing support for the poorest and most vulnerable members of the society through investments in social programs and providing social amenities will no doubt suffer some setbacks. The last unemployment report released by the National Bureau Of Statistics (NBS) ranks Nigeria 21st among 181 countries with a poverty rate of 40.09% representing 82.9 million persons, though critics and analysts contest these figures.
Basically, the Nigerian government essentially must lead economic diversification drive. It is one practicable way to saddle through the current economic uncertainties and instabilities. What the consequences of COVID-19 pandemic should offer the Nigeria economic managers and policymakers is that the one-tracked, monolithic reliance on oil is failing. Diversification priorities to alternate sectors such as agriculture, solid minerals, manufacturing and services, should be further intensified. Before now, most states have been on either total or partial lockdown by the presidential order or governors respectively and last week, another order came to gradually ease the lockdown to enable economic activities to return to its normal state.
Akwa Ibom state is not left out in this eases of lockdown, the governor, Mr Udom Emmanuel has given a directive of no mask no movement effective from 4th of May. He also gave directives as to the number of persons each means of transportation is expected to carry, days for markets to be opened and the number of staff expected in an organization per time. These measures taken do not mean the virus has been defeated completely; rather, it is a means of cushioning the effect on the economy and allowing people fend for themselves while adhering strictly to the guidelines and taking responsibility for themselves. A gradual return of economic activities is expected and this will enable states and the county at large gain back business and the economy.