Abstract
One of the most burning issues that have dominated the public sphere in Nigeria and other oil exporting countries is the covid-19 pandemic and its attendant challenges. This pandemic is a shock on real economic fundamentals and frictionless of the market. It introduces a barrier between the market forces with strong complementary feedbacks in the real economy. The absence of precise vaccine or medication for the virus has necessitated the adoption of several precautionary measures with the aim of containing its wide spread. Critical among which are the travel restrictions, lockdown measures as well as social and physical distancing. These measures have detrimental effect on the demand and price of oil in the international market. In view of that, this study evaluates the social and economic impact of covid-19 in Nigeria taking into cognisance the effect on certain critical macroeconomic indicators. The study adopted an analytical approach to supplement the much ongoing documentations on the subject matter. Result shows that virtually all essential macroeconomic indicators are grossly affected with tax, remittances and employment exhibiting severe consequences. Also, uncertainty, panics and lockdown measures are key to motivating higher decrease in world demand. The supply disruptions and huge death toll generates a heightened uncertainty and panic for household and business. This uncertainty and panic leads to drop in consumption and investment thereby causing a decrease in corporate cash flows and triggered firm’s bankruptcy. Also, lay-off and exiting firms produce higher unemployment while labour income decreased significantly. Since it entails a large amount of government expenditure especially in the health sector which is required to contain the spread of the virus, there is needs for government to diversify its revenue sources and thus drop over dependency on the oil remittance. Furthermore, there is a need to support the financial system to avoid the health crisis becoming a financial crisis in the long-run.
Highlights
In the global economy, countries with abundant natural resources have a comparative advantage as they can export at lower prices and the international quantity demanded for their product would be on the increase
The absence of precise vaccine or medication for the virus has necessitated the adoption of several precautionary measures with the aim of containing its wide spread
This study evaluates the social and economic impact of covid-19 in Nigeria taking into cognisance the effect on certain critical macroeconomic indicators
Summary
Countries with abundant natural resources have a comparative advantage as they can export at lower prices and the international quantity demanded for their product would be on the increase. Instability in oil prices and of mineral resources generally has significant effect on economic growth and exchange rate for Nigeria and other African countries as well as indirect impact on inflation through the exchange rate (Akalpler and Nuhu, 2018). This development places oil producing countries of Africa at greater risk of depreciation of their currencies during this covi crisis. Trade among African continents is seen as one of the lowest when compared to other regions of the world, at 16.6% of the total Experts observed that this situation is very much rooted in the low levels of large industrial establishment, infrastructure development, financial and monetary integration and the tariff and non-tariff barriers. The rest of the paper is organised as follows: section 2 presents and highlights the social and economic impact of covid-19 in Nigeria in relation to sustainable growth; section 3 provides the challenges and other complications of managing the pandemic in Nigeria; section 4 deals with the government response and other initiatives as instituted by the federal authority in Nigeria; section 5 contains the materials and methodology used in providing clarification to the covid-19 happenings in Nigeria; section 6 presents the results based on review from the literature; section 7 provides the concluding remarks; and section 8 deals with the policy recommendations based on observations from the current realities
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