Amid Covid-19: The Fear Of Recession Grips Nigerians -By Onawola Abdulqodri Adewale

Due to the outbreak of coronavirus pandemic which is declared as a “worldwide emergency” by the World Health Organization, the coronavirus pandemic has been spreading rapidly among Nigerians since Nigeria has experienced the first case of the virus on 27th February 2020. The nature of coronavirus is surprising because it is highly contagious and spreading rapidly among Nigerians.

In order to conquer this deadly virus, the Nigerian government is forced to generally implement some preventive cares like Introduction of Shutdown to all business enterprises, Cancellation of all human engagements, Temporary lockdown in some cities, enforcement of operation “stay at home” and the likes; all these restrictions have boomeranged on the Nigerian Economy in both Home Trade and Foreign Trade.

The Nigerian government is aware that if restrictions are placed on every Human activity, it would bounce back on the Country’s Economy, but, the lives of the citizens are precious and need to be protected. In Economics, Budget Deficit in Government project is said to be a situation where” the expected expenditure is greater than the expected income”, this simply means that the total amount of money spent is greater than the money earned.

In the process of fighting against coronavirus pandemic, Foreign Trade and Home Trade cannot run effectively because of the nationwide restrictions. In the same vein, the Nigerian government is spending a huge amount of money with little income into the Government’s account; the recession is possible in this situation. Coronavirus Pandemic offers delicate phenomena to the Nigerian Economy at the two levels of trade respectively.

CORONAVIRUS EFFECTS ON NIGERIA’S FOREIGN TRADE

Series of unfavorable events have occurred to the Nigerian Foreign Trade which can lead to shortages_ Recession, and the major phenomena that determine the economic growth of Nigeria are affected. The major phenomena are:

CRUDE OIL DECLINES IN INTERNATIONAL MARKET

Since oil accounts for 90% of Foreign Exchange and Revenue from oil production are 31% of the 2020 Budget, the continuous fall in the value of oil negatively affects economic growth which can lead to Recession. The decline in the value of oil and demand happens due to little demand for oil in the international market because of Restrictions in most countries of the world where coronavirus Pandemic cases are recorded. Recession is likely in this situation.

DEPRECIATION IN NAIRA

Nigeria officially approved Naira as the commercial medium of exchange in the Country. When goods are exported to another Country, the medium of exchange could be changed from Naira to any preferable currency, in most cases, it is changed to Dollars.

It is worthy of note that the Central Bank of Nigeria has devalued Naira from the rate of #307 to #360 per Dollar. The restrictions in Nigeria and other countries have disrupted the normal flow of exchange in the international market because there are lesser demands for products on like before when there were no restrictions.

Other aspects of Nigeria’s foreign Trade that contribute greatly to economic growth are negatively affected due to coronavirus Pandemic and if proper cares are not taken by Nigerian economic policymakers, Recession is likely.

CORONAVIRUS EFFECTS ON NIGERIA’S HOME TRADE

The total shutdown placed on all business enterprises and human engagements with some exceptions in the country, in order to fight against coronavirus, Nigerian Economy suffers a great economic loss due to the shutdown. The closure of governmental enterprises, non_ governmental enterprises, schools, ports, informal sectors, and others would boomerang on the Nigerian Economy.

These restrictions take negative effects on Nigeria’s Home Trade and economic output and most especially, the informal sectors, informal sectors contribute 41% of Nigeria’s economic output, in this situation, Recession is possible since it is closed. The Government is spending lots of money to protect the citizens from coronavirus Pandemic which is spreading rapidly among Nigerians day by day with less amount of money coming into the account of Government, Recession is possible in this situation.

In striving to fight against coronavirus pandemic and protecting the country’s Economy, operation “WORK FROM HOME” is introduced and it has been formally adopted. Nigerian economic policymakers made the right decision with this and with the view of making operation”STAY AT HOME” more satisfiable for Nigerians. Although not everyone can stay at home and be productive at least, some Nigerians would be productive at home.

In conclusion, Nigeria may not experience Recession depending on the kind of responses the economic policymakers introduce in tackling all these unpleasant economic occurrences amid coronavirus. Coronavirus pandemic has punched the economic system of Nigeria which results in Recession; the infallible decisions of the economic policymakers can only protect Nigeria.

Onawola Abdulqodri Adewale is an undergraduate student of the English language at Usmanu Danfodiyo University Sokoto, Sokoto State, Nigeria. He can be contacted via email: onawolaabdulqodri22@gmail.com or phone address: 09025324714.