Negative Impact of Covid-19 On Oil Price and Export: An Assessment of CounterMeasures Taken by The Nigerian Government

Abstract

The unprecedented outbreak of the COVID-19 pandemic has affected individuals and countries in diverse ways. One of such areas that have suffered a massive hit is the socio-economic aspect of man. Efforts to contain the spread resulted in close down of manufacturing centres of major economies of the world, travel restrictions, total lockdown, border closures and a host of others. This has negatively affected world trade as it has led to decrease in the demand of raw materials particularly crude oil by producers and drastic fall in its price following disagreement of oil price war between Russia and Saudi Arabia. Nigeria is greatly affected as it relies heavily on crude oil as its major export commodity coupled with an already weak economy. The negative impact of the drop in oil price and export is taking its toll on the economy. In a bid to manage the situation, the federal government has taken certain countermeasures. The study examined the negative impact of the drop in oil price and exports on the Nigerian economy and counter measures to checkmate the effects therein. By analyzing secondary data, the study found out that the negative impact on the Nigerian economy is drastic and there is a need to cushion its effects, some of the countermeasures identified include devaluation of the naira, extension of moratorium, review of the budget, release of 50 billion naira to households and affected SMES among others. The study recommends that there is increased need to diversify the economy and increase local production.