COVID-19 Aftermath: The Brewing Crisis
I have always marveled at how Nigeria as a nation survives with the lack of developmental statistics necessary to assess and possibly fine tune her economy. Here is another instance starring at us in the face.
Most attention is currently directed at curtailing the spread of the Corona virus in the country. Perhaps, rightly so. It is logical that we address this concern as a priority because it is difficult to build when destruction prevails! But it would be wise also, to take a closer look at the dimension of the catastrophe caused by the shut downs, the stay at homes, decline in economic activities, collapse of the crude oil price, the apparent failure in the relationship between the leaders and the led etc.
As a result of the economic meltdown of Covid-19, the United States Labor department recently reported that unemployment benefit claims, rose to a whopping 6.6 million - almost ten times the previous record set in October 1982. That alone in itself, indicates the enormity of the restructuring work needed to put the US economy back on its foot after this crisis.
In the Nigerian context however, the statistical data needed to evaluate such impact is neither unavailable or at best, inadequate. We therefore, need to rely on conjectures or approximations in order to fathom the way out of our predicament.
Be that as it may be, we need to understand that post Covid-19 era will bring about a basket-full of challenges especially as the Nigerian economy is crawling through a post-recession era. If figures from the Statistics office are to be reckoned with, our GDP wimped from 0.82 percent in 2017 to 1.93 in 2018 and just 2.02 at the first quarter of 2019. Also, prevailing inflation rate just before the emergence of Covid-19 stood at 11.02 percent. Thus, with the prevailing Covid-19 shut downs and crippling economic activities, the impact on our economic well-being is as good as you may guess!
For us to have an idea of the challenges that lies ahead post Covid-19, the 2020 Appropriation Act was predicated on $57 per barrel and the production of 2.3 million barrels per day. Today, the price of Crude oil is rallying around $30 per barrel. Even when there were not much economic disruptions in 2019, we recorded an average daily oil production of 2.04 million barrels per day (mbpd) in the third quarter of 2019! Also, revenue from Customs amounted to about 1.3 trillion in 2019 which forms a substantive part of the nationís non-oil revenue. In 2020, the revenue from Customs will hardly be half of this figure based on the closure of most international airports, Seaports and land boarders as a result of Covid-19!
Is there life after Covid-19 for Nigerians? Please fasten your belt because the ride will be rough. Our leaders must, as a matter of necessity, quickly go to the drawing table, to prepare the economic palliatives necessary to keep the economy afloat. Cognisance must be given to the substantive role of the informal sector because it is this base that employs majority of Nigerians. In simple terms, the leadership needs to concoct formulas or solutions that will encompass the man in the informal sector who may not have the requisite curriculum vitae to qualify for bank loans or government grants as structured today.
The answers, in my humble opinion are firstly, significant attention to employment generation both at the formal and informal sectors. Secondly, injection of funds into capital projects with its multiplier effects even if we have to borrow. Thirdly, blocking of economic leakages through corruption, maladministration and official graft. Fourthly and very importantly, the government must provide necessary leadership at these difficult times, develop a trust relationship with the people and advance hope to replace despair in our nation.
The road may be rough, but hard work, dedication and careful planning will get us to our destination.
2. National Bureau of Statistics: https://www.nigerianstat.gov.ng/.
3. Budget office of the Federation: https://www.budgetoffice.gov.ng/.