Nigeria’s Recession & Food Shortage Amid A Devouring Pandemic: Forecasting 2021 -By Daniel Udeze Jr.

United States commercial bankruptcy filings were up 33% this year, recording new cases, particularly in September with a surge of 7% triggered by the pandemic.

The bankruptcy Fillings YTD (Year Till Date) also revealed that the hospitality and retail sectors are having a horrible year; the pie chart in its report showed clearly that technology-driven enterprises are on a wanton cruise.

While we await a similar reportage in Nigeria from the National Bureau of Statistics, which unfortunately won’t be published until Q4 2021, the plot will track the retailer and hospitality sectors equally wailing.

More notable in this imaginative publication would be the agricultural sector, with a significant percentage of loss as the lockdown happened at the subsistence planting season’s peak. This is partly why Ag-tech start-ups like ThriveAgric and Farm Crowdy witnessed an unfortunate management struggle in this era.

With the drop in oil prices, government revenues fell by 8.4% from an already low 8% GDP last year.

As Nigeria slips into recession, a period of grave decline in economic activities resulting in a business cycle contraction. The collapse in oil prices coupled with the Covid-19 pandemic, was well expected to plunge the economy into severe austerity.

While food inflation stands at 17.38% for November, a food riot is imminent, and the best place to begin is to expand agricultural production of the other key goods and deliberately set low prices to checkmate opportunity inflation. This is so because when prices of essentials are high, people will not buy-in on non-necessaries. The retailers would lower costs, but with food and other necessities, suppliers and producers can always maintain high prices as an increase in this usually and periodically causes a need to raise the minimum wage.

While the pandemic’s macroeconomic impact remains extremely significant even when the country took measures to contain the spread, the Nigerian economy would continue to contract by 3.2% in the first quarter of 2021.

Suggestively, a 90-day import window will go a long way to normalize food production and prices at the beginning of the 2021 fiscal year. In doing this, sound and fair prices on essential goods must be installed by increased food production funding and then retailing at low prices. Without such, food prices will continue to soar and outstrip supply.

Care must be employed not to witness a surge in demand for dollars at the foreign exchange market, eventually weakening the naira. The current exchange rate is already at N470 to a dollar. It may most likely plunge further to N550 in mid-2021, resulting in a high surge in virtually every sector of the economy.