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Market Digest Nigeria

Economy

Nigerian economy to worsen with rising second wave of COVID-19

Lagos — Despite the current recession, the economy may be further threatened as some states plan various forms of lock down due to the rising second wave of the COVID-19 pandemic.

 

The Public Health Advisory published on the website of the Nigeria Centre for Disease Control (NCDC) on Friday shows there is an increase in COVID-19 cases. As of Thursday, over 71,000 confirmed cases and 1,190 deaths had been reported across the 36 states and the Federal Capital Territory (FCT). The NCDC said “Since the beginning of September to the end of November 2020, Nigeria has recorded a gradual increase in the number of confirmed COVID-19 cases in the country.

“However, in the last week (30th of November to the 6th of December) our surveillance system has recorded a sharp increase in cases.” The advisory analysis shows that the increase is continual in 23 states in the country. The majority (73%) of the cases detected were in Lagos, Kaduna and FCT. Eight of the 23 states reported a record high number of weekly cases last week. Large parts of Europe are in a second lock down as a new wave of infection sweeps through the continent. Taskforce raises alarm

Chairman of the Presidential Task Force (PTF) on the Coronavirus disease (COVID-19) and Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, has also decried the rising cases. He noted that other countries are already experiencing some form of lock downs in the second wave of the pandemic. The Minister of Health, Dr Osagie Ehanire, in a presentation recently said, “The evolving global situation of COVID-19 gives us much reason for concern. Over 2.8 million cases were reported in the last one week, with half of the cases in Europe.” Lagos, Kaduna mull lock down

Governor Nasir el-Rufai of Kaduna State has expressed concern over the rising cases of COVID-19 and has threatened to impose a second lock down if the trend continues. El-Rufai said he was worried that the rate of infections will soon overwhelm the state’s health system if nothing is done urgently to contain the spread of the virus. Kaduna State has so far recorded 30 percent new COVID-19 infections daily in the last two months, records showed. The Lagos State government has also warned residents that the continuous flagrant disregard of COVID-19 protocols and safety guidelines by citizens could lead to a second wave of new infections in Lagos and subsequent lock down.

Governor Babajide Sanwo-Olu also contracted the virus and is receiving treatment. The Lagos Commissioner for Health, Prof. Akin Abayomi warned that resurgence of cases in Lagos could also lead to the reversal of the measures in place. The International Food Policy Research Institute (IFPRI) in a recent paper which analyzed the economic impacts of the COVID-19 pandemic, estimate that during the lock down, Nigeria’s Gross a domestic Product (GDP) suffered a 34.1 per cent loss due to COVID-19, amounting to $16 billion, with two-thirds of the losses coming from the services sector.

The report also noted that the agriculture sector, which serves as the primary means of livelihood for most Nigerians, suffered 13.1 per cent loss in output ($1.2bn). “We estimate that households lost on average 33 per cent of their incomes during the period, with the heaviest losses occurring for rural non-farm and for urban households. The economic impacts of COVID-19 include a 14-percentage point temporary increase in the poverty headcount rate for Nigeria, implying that 27 million additional people fell below the poverty line during lock down,” it added. Lock down may worsen economy – Experts, CBN

Nigeria is in recession with 14 per cent inflation rate after two consecutive quarters of negative growth. The economy is expected to recover early 2021 with current measures. However, experts who spoke with Daily Trust said the planned lock down by some states may worsen the economy and delay the recovery period. Chairman of the Foundation for Economic Research and Training in Lagos, Prof. Akpan Hogan Ekpo said: “We cannot afford another phase of lock down. It will completely kill the economy. It will be disastrous for households, families and businesses.

“Our economy is not a productive economy. A lot of people depend on the informal sector. They practically live from what they earn daily. What we urgently need is social restrictions. “Government should enforce the wearing of masks; prohibit gatherings to not more than 20. We have to stop these weddings and parties where people behave as if there is no COVID-19.”

Director General of the Lagos Chamber of Commerce and industry (LCCI) Dr Muda Yusuf said a second lock down is not advisable. “The social and economic environment is too fragile to withstand the shock of another lock down. What needs to happen is to intensify the sensitisation and awareness on COVID protocols. Some subtle enforcement should also be put in place.” An economist, Dr. Ifediora Amobi, said the first lockdown did not achieve the desired results because it was terribly abused by the same people that were tasked to ensure its effectiveness.

De Amobi said any state government that wants a second lock down should do it on their own as long as their State House of Assembly approves it. “Any attempt at another national lock down will be catastrophic to the livelihood of the Nigerian family, to business profits, and to the national economy,” he said. Governor of the Central Bank of Nigeria, Godwin Emefiele, has also spoken about this. Responding to  enquiry at a recent briefing, he said: “We have seen second and even third phases of the pandemic, and they have been handled in different ways.

“You would observe that most countries are very reluctant in locking down their economies again. They are doing some form of selective retractions on movement and all that but not an entire lock down that would deeply hurt the fabric of the economic activities in the nation. “We would see what can be done if there is need for some more support in case there is what I can call a restriction. But an entire lock down, like what we had for about six to eight weeks, the private sector will be averse to that,” he noted citing the efforts of CACOVID, a private sector group that intervened during the first lock down.

“We will work with PTF if there is a second wave in Nigeria, God forbid it, on how things can be done in a way that does not result in total lock down with adverse effect on our economy,” Emefiele said.

Source: AllAfrica

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