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Coronavirus and Nigerian economy

By Malachy Ukpong (Former Assistant Editor, News, FRCN)

Malachy Ukpong

Coronavirus is still spreading like wild fire, ravaging virtually everything on its way. The entire world is at the crossroads. Nothing is spared. Social engagements, our spiritual and cultural lives, as well as movements, have all been curtailed. Places of worships, entertainment spots, recreational parks and work places are shutdown in a bid to stop the spread of the virus.

 Our age-long tradition of hand shake and warm embrace with loved ones is now a taboo. Even in European countries, the cheek kiss has been jettisoned. Everybody is assumed a potential carrier of the virus who must be kept at arm’s length. Social distancing has replaced the togetherness and interrelatedness we were hitherto known for. Mankind no longer remain the same. All these have unbearably suffocated the economy. Even the wealthiest nations have had their economies nosedived with a speed never known in history, since the depression of the 1930s. Countries are worried about their economic future and leaders across the world are setting up think tanks to find ways of regaining their economic rhythm after the pandemic.

Price of crude oil, Nigeria’s main source of revenue
has plummeted over COVID-19

The effects of the pandemic vary from country to country, and so will the solutions for post COVID-19 differ from nation to nation. In Nigeria, the first major casualty has been the price of crude oil in the international market. At present, the economic fundamentals look so bleak that there is palpable fear for a total collapse of the economy. The Federal government has twice reviewed downward the 2020 budget in line with the unpalatable dictates of the pandemic.  Many organisations have sacked their workers, while others have threatened to do so or have their salaries slashed.

 Life has become a nightmare for most families. The question many are asking is – will things ever go back to normal?  Will life be the same again even after the pandemic?  First, it is important to note that after the quarantine period, people will find it difficult to go out and mingle or relate with others, as it used to be, for fear of a relapse of the dreaded virus. This disposition will, to a large extent, have serious implication on post pandemic business ideas. Countries with fragile economies are likely to suffer most.  

Agriculture remains a major panacea to the COVID-19 crisis

Import dependent and monolithic economy like Nigeria must begin to look inwards and diversify. Agriculture still remains the best option. It is not an overstatement to say that the economic impacts of COVID-19 would have been more devastating on Nigeria than what it is now, if the present administration did not prioritise agriculture right from inception. If deliberate efforts were not made by the government before now, for Nigerians to produce what they eat through the border closure and encouragement of local production, imagine what the situation would have been with the current global lockdown following the spread of the corona virus. The availability of locally produced rice and other food products has helped to cushion the effects of the lockdown on imported goods.

NIgeria needs functional power supply to boost its economy

 If there is any lesson the coronavirus pandemic has taught us, it is the fact that Nigeria can be self-sufficient in every sector if the right approach is adopted. For instance, within a few weeks of the lockdown, most Nigerians started local production of hand sanitizers and face masks for the prevention of the virus. The National Agency for Food and Drug Administration and Control, NAFDAC, recently announced that it received a number of applications from many Micro, Small and Medium Enterprises, MSMEs, for registration to produce local herbal remedy against the disease. The post COVID-19 era in Nigeria will be determined by the ability of government to come out with well-articulated policies and programmes that will promote the country’s manufacturing sector. Countries that will survive post pandemic era are those that are visionary, innovative and inward looking. The first thing Nigeria should do in this regard is to galvanise the power sector which is the hub of industrial development. The current epileptic electricity supply throughout the country does not encourage the springing up of manufacturing companies to support the economy. If Nigeria cannot produce enough for local consumption and for export, the hope to survive post COVID 19 may be a mirage.

Nigeria is blessed with diverse mineral resources

 At the moment, Nigeria’s balance of trade is in favour of her trade partners, forcing the Naira to plunge to a very dismal level. The reason for this is not farfetched; the country cannot boast of any exportable product apart from crude oil. It is not as if opportunities do not abound in other areas. In fact, investment opportunities are available in other sectors like mining and tourism. In the mining sector alone, Nigeria is endowed with about 34 solid minerals identified in 450 locations across the country.  This is a viable Greenfield capable of fetching Nigeria enormous foreign exchange earnings for economic development.

If Nigeria must survive post pandemic era, concerted efforts must be made to exploit the economic potential in other sectors to reduce the current over dependence on oil. Intractable problems like this require drastic steps to address. Therefore, consideration should be given to the full implementation of the principle of true federalism in the country to stop the current practice in which state governments run cap in hand every month to the centre for federation account allocation. Economic wellbeing of the citizenry in post pandemic period will be predicated on how much government at all levels are able to reorder their priorities, curb areas of waste and come out with projects that will enhance their Internally Generated Revenue base.

This period should spark off healthy competition and greater cooperation among all the federating units on how best to harness the abundant resources in their zones for the economic benefits the people.  With the devastating effects of the corona virus on economies of the so called super powers, the era of African governments expecting financial assistance from donor countries may have been over. The pandemic is likely going beyond 2020 and the end of it may usher in a new World Order. And for Nigeria to fit into the emerging global system, she must re-appraise her policies and embark on programmes that will increase her Gross Domestic Product and improve the living standard of her citizens.       

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