ECONOMIC IMPORTANCE OF CORONAVIRUS IN NIGERIA
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ECONOMIC IMPORTANCE OF CORONAVIRUS IN NIGERIA
Chapter one
INTRODUCTION
1.1 Background of the Study
Coronavirus disease (COVID-19) is an infection caused by a novel virus. The condition causes respiratory illness (similar to the flu), with symptoms including a cough, fever, and, in extreme cases, difficulty breathing. You can protect yourself by washing your hands often, not touching your face, and avoiding close contact (1 metre or 3 feet) with those who are sick.
The 2019-20 coronavirus pandemic has had far-reaching repercussions that go beyond the disease’s transmission and quarantine attempts. As the pandemic progressed over the world, concerns turned from supply-side manufacturing challenges to reduced revenue in the services sector.
Supply shortages are predicted to hit a variety of industries as a result of panic buying, increased consumption of commodities to combat the pandemic, and disruptions to manufacturers and logistics in mainland China.
There have been numerous reports of pharmaceutical supply shortages, with many locations experiencing panic buying and subsequent shortages of food and other necessary grocery goods (.wikipedia.org).
Nigeria has a primarily monoproduct economy based solely on crude oil. The previous and current governments have often emphasised the need to transition the economy away from its reliance on oil.
Workers’ earnings may be jeopardised given the current economic climate. Last Wednesday, members of the Federation Accounts Allocation Committee (FAAC) were unable to agree on the sum proposed for sharing.
An official intimated that members of the committee were unable to agree on the amount provided for split by revenue-generating entities. The amount offered was significantly less than the members expected from the three levels of government.
This brings back memories of the 2016 recession, when 27 states owed workers and pensioners pay and entitlements ranging from one to 36 months. A 2017 poll found that numerous states failed to pay pensions and gratuities, with Imo, Taraba, and Niger owing retirees two to three years’ worth of entitlements (https://tribuneonlineng.com).
Following a cabinet meeting on Wednesday, the Nigerian government approved a reduction in its capped petrol pump rates, allowing the country’s fuel costs to reflect the recent drop in global oil prices.
President Muhammadu Buhari approved the drop in fuel pump prices from 145 Naira to 125 Naira and also instituted a “modulation mechanism” that will allow a reduction in petrol expenses if crude prices decline.
Timipre Sylva, Minister of State for Petroleum, stated that Nigerians should profit from lower fuel expenses as a direct result of the global crude oil price slump. “This action is being taken to cushion the economic impact of COVID-19 on our people,” he stated.
The coronavirus’s global impact has rattled Nigeria’s main source of revenue and foreign currency. Up to 90% of the country’s foreign exchange profits come from oil sales (http://venturesafrica.com).
Prices for basic food items are rising in Nigeria as buyers stock up on necessities and vendors seek profit amid the coronavirus outbreak. People are calling on governments to intervene. The price increase is attributable to a variety of factors.
Sellers are looking to benefit on the catastrophe. There is also an upsurge in demand due to panic buying by folks who are unsure what tomorrow may bring.
Third, it is linked to the global commercial landscape. Many commodities originate in China, and because the Chinese market has been severely impacted since the beginning of the year, dealers are no longer travelling there.
The bleak image is not limited to Nigeria. Other African countries, as well as those in the Middle East, Asia, and Europe, face similar challenges. Based on this backdrop, the researcher would like to explore the economic importance of coronavirus in Nigeria.
Statement of the Problem
As a result of the worldwide economic slowdown and lockdown in some countries, including Italy, Spain, and most Eurozone nations, as well as Nigeria in particular, COVID-19 has had an impact on global oil demand.
The drop in oil demand is expected to outpace the loss of over 1 million barrels per day during the 2007-08 recession. This comes at a time when two major players in the global oil business, Russia and the OPEC cartel, are at odds over the decision to restrict supply.
The unambiguous oil price war that has begun between these two global oil market titans may have far-reaching ramifications for the oil price, which has begun to fall.
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