By Yemi Olakitan
There is a global lockdown as a result of the Coronal virus. There is no doubt this will affect the economy of nations including Nigeria. In order to cushion the economic effects of the virus, the Central Bank of Nigeria (CBN)not too long ago announced six new policy measures to mitigate the spread of the dreaded coronavirus across the country. The governor, Godwin Emefiele, said any intervention loan currently under moratorium has been granted additional period of one year. He also announced the reduction of interest rates on all applicable CBN intervention facilities to five per cent from nine per cent per annum, for one year.
According to him, the apex bank is also establishing a N50 billion facility through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) microfinance bank for households as well as Small and Medium-sized Enterprises (SMEs) that have been hit by the COVID-19.
AN24.net had a chat with Economist and social commentator, Chief Bayode Ogunmupe, on the impacts of the virus on the economy and the Central Bank’s measures aimed at cushioning the effects on the nation. He said, ‘‘the Coronal virus epidemic will have a devastating impact on the economic situation of Nigeria because Nigeria is a Monoculture economy. Nigeria’s dependence on oil and her neglect of the agricultural sector will deepen the country’s poverty levels during the global Corona virus shut down. I doubt whether the Central Bank palliative will bear the desired fruits as we will want it to be, although it is a step in the right direction.’’ He said, ‘‘you cannot change the economic system of a nation overnight with a few palliatives. Nigeria has been a monoculture economy for years and the world is going electrical. There are electric cars which are already very popular in Japan. This in itself will affect our oil exports since nations will explore other energy sources giving the situation they are in. With global travel restrictions and movements, more people will stay at home. This will affect international travel business for at least a year and by extension; importation. Nigeria must shift to agriculture and import substitution industries. Only this can alleviate the poverty in the country and check our dependence on oil.’’
For decades Nigeria had relied heavily on her oil resources for dollar earnings to fund its national budget. With this year’s $37 billion budget passed with a benchmark oil price of $57 per barrel—nearly double its current price of around $31 to $33, Nigeria cannot currently fund its budget.
In another chat with Pa Ayodele Ogunjobi, Chattered Accountant and blogger, he said, the economic impacts can be easily observed even by the common man. Ogunjobi said, ‘‘when people stay at home and they don’t work, that will cause economic inactivity. it means we have simply put human capital on hold without which there can be no economic gain. We have not reached a stage where robots can take over economic activities completely, assuming such a stage exist. As you can see, teachers are not working, schools have been shut down, civil servants have been asked to stay at home. If you want something done in the ministry now, it will be very difficult to do it, even if you are able to do it, it will be slow,’’ he said.
‘’They might ask everyone to stay at home eventually, the way things are going. So, definitely we may have another recession. It’s already happening as global stocks exchange as prices have fallen,’’ he said.
Another effect of the Coronal virus on the economic situation of the country is a US dollar shortage that’s already happening on the informal forex markets. These informal dollar dealers operate just in front or across the major establishments or roads in Nigeria. They can be seen mostly in Lagos and Abuja.
No sector is spared; sports activities have been canceled all over the world! In the entertainment sector, Nigerian hip pop star, Davido annulled his American tour, same as Afro beat musician, Femi Kuti. Most Hotels, bars and clubs are becoming a shadow of themselves as the Lagos state Government’s Environmental Protection Agency enforced a total shut down of events centers and clubs for flouting the order of the state on the prohibition of a gathering of more than 20 persons. Yet, no one knows when all these will end with Nigeria’s Corona virus incidents hitting 40 cases and still counting.
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