Prior to this moment, it would have been difficult to envisage a situation where developed nations will experience this magnitude of strain on their healthcare systems. Nations rated among the top ten countries in terms of health care facilities and personnel are currently struggling to contain and halt the spread of the coronavirus (COVID- 19).
The disease that knows no race, ethnicity, belief system, social status also knows no geographical boundaries. Among other things, it exposed the depth of our connection as a global society and how great an individual’s carelessness could affect the whole world. As of the 4th of April 2020 (11:17 am), we have over 1.1million cases and almost 60,000 deaths from COVID-19.
World over, countries have had to make a drastic effort and provide makeshift hospitals to accommodate the ever-growing surge in the number of infected persons. As of today, the Federal government’s stadia, pilgrim camps and other facilities belonging to either the government or private citizens are currently being prepped as makeshift isolation centres.
Being a highly contagious disease, COVID-19’s impact is not limited to the physical health of individuals; it also has a social and economic impact. Social gatherings in virtually every part of the world have been suspended, lots of companies have been forced to fully embrace the remote style of work or risk being forced out of operation, individuals have been urged to stay indoors and maintain a considerable distance among themselves and movement has been completely restricted in some areas.
As a result of the unpleasant but necessary restrictions, businesses all sizes and interests have been badly affected. While businesses providing essential services are still in partial operation, others (tourism, hotel services, sports business and many others) have had to shut down till further notice.
Globally, millions of jobs are being lost on a daily bases (over 6.6 million Americans filed for unemployment on the 3rd of April 2020), companies can no longer generate revenues, self-employed and other categories of workers that could no longer be at their place of work or offer their services are all feeling the economic impact birthed by this pandemic.
The above has led to a steady decline in the purchasing power of citizens globally. Except you are a provider of essential service, recording low or no sales shouldn’t come as a surprise to you. Currently, people are more inclined to spend money on essentials like food, toiletries, drug and water.
For a country with a sizable population of daily earners, the situation is more severe for Nigerians and its economy. The average Nigerian can no longer afford to buy foodstuff the way they used to because the price surge is too high.
According to the prediction of economic experts, the COVID-19 pandemic has accelerated Nigeria’s chances of entering into another recession and a further devaluation of the Naira in no distant time. In other words, we should also expect a surge in the price of imported commodities.
Of course, countries of the world have made genuine effort to limit the economic impact of this pandemic on her citizens by providing several relief packages (It was recently announced that Nigeria gave ₦20,000 to “2.6 million” Nigerians in two days); such initiatives cannot totally annihilate the staggering effect caused by COVID-19.
Sadly, the massive economic disruption caused by COVID-19 is not expected to end soon. The US extended its lockdown policy to the 30th of April while the UK is projecting a minimum of six months before the society returns to normalcy. For Nigeria, we still don’t know how long this shut down will take and more importantly if the citizens will be willing to adhere to an extension of the lockdown order.
Can the Nigerian government provide the needed support to survive this pandemic? Even if the Government intends to, the odds are currently against us. First of all, approximately 25% of our annual budget goes into debt servicing. With the steady drop in the price of crude oil per barrel, debt servicing is already becoming a problem and FAAC allocation is expected to take a nosedive.
With the present situation, Internally Generated Revenue (IGR) will make little to no significant difference as most local enterprises are currently battling with low patronage.
If the above is not enough, our credit rating as a nation is also at an abysmally low level.
How then can we mitigate the economic effect of this pandemic and save the nation from increasing her percentage of extremely poor people? Well, the bulk of the task rests with the Government. Without a solid economic plan drafted and implemented by technocrats, poverty might record more death than COVID-19 when it all ends.
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THE COVID 19 PANDEMIC AND ITS EFFECT ON BUSINESSES IN NIGERIA”