A number of unfortunate developments have worked together to shape the Nigerian economy, albeit in a bad way. And things can get worse unless certain actions are taken quickly to mitigate these adverse events.
This is the summary of a presentation by Cheta Nwanze, Lead Partner at SBM Intelligence, who was part of a set of lively panelists who spoke during Nairametrics’ economic outlook in Q2 2020. The event, which took place practically on Saturday, centered on the topic: “The New Normal – Economic Prospects: Your Money or Your Life.”
According to Nwanze, the COVID-19 pandemic triggered a public health crisis in Nigeria, a situation quickly followed by economic instability. The drastic fall in oil prices, Nigeria’s largest currency source, only complicated the situation.
While other countries like the United States responded to the crisis by handing out trillions of dollars as palliatives, Nigeria offered very little relief. The country was also plagued by worsening inflation and the challenges of civil unrest / security. The International Monetary Fund (IMF) had since predicted a global recession expected to exceed 3%.
Nigeria was not prepared to deal with COVID-19 and its fallout
Speaking further during his presentation, Nwanze compared Nigeria’s response to the pandemic with countries such as South Africa and India. According to him, Nigeria’s first COVID-19 curve was particularly similar to that of India.
But this changed over time because Nigeria had only been able to test a very limited number of its citizens, a situation that led to fewer cases being discovered. It was unlike India which increased its testing efforts. Nevertheless, the negative economic effects of the pandemic remained very significant in Africa’s most populous country.
The economic impact is still there, whether the cases are low or not. And it shows the state’s readiness; this chart is very important … the preparedness of the Nigerian state. Basically, this chart was derived by taking into account certain factors – doctor-population ratio, human development index, infant mortality, budget per person. Per capita, percentage of the budget spent on health; it is a very important thing that many people do not look at in this country.
“After seeing all these, you find that the best prepared Nigerian state is believed to be Cross River, which is not even up to 60% ready for anything. Basically, Nigeria at the state level is not ready to deal with the effects of this pandemic. “
Civil unrest and violence have been major problems
In addition to the fatalities caused by the COVID-19 pandemic and a previous Lassa fever outbreak this year, Nigeria has also struggled with the fatalities caused by unrest in the country’s northeast region.
According to Nwanze, hundreds of violent deaths were reported across northeast Nigeria. Similarly, kidnapping remained a major security challenge in the country, he noted. Unfortunately, a poor security situation never facilitates the economy of any country.