Nigeria, home to Africa’s largest economy, is facing consequences from the surge of COVID-19. After experiencing a recession in 2014, the country was finally seeing progress in its oil exports, resulting in overall financial recovery. That is until the pandemic hit. Nigeria is struggling to reignite its economy as the damages of the novel coronavirus persist. The country’s dependency on oil exports, along with the inevitable effects of a country-wide lockdown, are two reasons for Nigeria’s economic downturn. However, steps are being taken to boost Nigeria’s economy. This article articulates both the economic impact of COVID-19 in Nigeria and recent motions toward recovery.
COVID-19: The Numbers in Nigeria
According to the World Health Organization, Nigeria has seen over 38,000 cases of the coronavirus and over 800 deaths. In a country of around 214 million, the fatality rate is about 2% or 418,000 Nigerians. What does this mean for their economy?
Despite a recession from 2014 to 2016, The World Bank asserts that Nigeria’s economy may be headed toward the worst financial state the country has seen in four decades. Nigeria is extremely dependent on oil, which represents more than 80% of the country’s exports. With international travel halted due to COVID-19, the country has recorded an 18-year low on fuel prices, at $22 per barrel. According to economics experts, the Nigerian revenue flow will decrease to 1.1 trillion Naira (about $3 billion). That is about a 4.4 trillion Naira decline from the beginning of 2020.
The National Bureau of Statistics states that 42% of almost 2,000 citizens interviewed were out of work as a result of the pandemic. Out of all households interviewed, the poorest households saw the highest share of unemployment, at a jarring 45%. Moreover, 79% of reported households saw a decrease in their income as of March 2020.
Oil exports are not the only thing hurting Nigeria’s economy. Prices of common goods, like bread and water, increased shortly after a lockdown was enforced on March 30. A single loaf of bread increased from N350 to N450 (around ¢90 to $1.16). Pure, clean household water in Nigeria normally costs about N100, but since the pandemic, the price has doubled. As the consumption of goods, investments and net exports decrease, Nigeria’s economy is facing a harmful downturn.
The Good News
There remain reasons to be hopeful for Nigeria’s economy. Early in the pandemic, the National Orientation Agency (NOA) performed contact tracing calls to prevent the spread of COVID-19. These calls were made to people deemed “passengers of interest,” or those who had been traveling in recent weeks. Not only did these calls help slow the spread of the virus by enforcing self-isolation, but they also created a sense of comfort. The calls aided monitoring symptoms and provided psychological encouragement during an unprecedented time.
Nigeria’s government has also worked to help people financially impacted by COVID-19. The Central Bank of Nigeria (CBN) set out a 50 billion Naira ($139 million) stimulus package for Nigerian households and small to medium-sized businesses. Moreover, interest rates on CBN interventions decreased from 9% to 5% in an effort to aid Nigeria’s Economy.
UNICEF has also contributed to helping Nigeria throughout the COVID-19 pandemic. In collaboration with the Nigeria Center for Disease Control (NCDC), UNICEF is ensuring that all mothers with children under the age of two are able to safely breastfeed their babies, making sure they follow health guidelines.
With children out of school due to the pandemic, the National Agency for Food and Drug Administration and Control (NAFDAC) has provided training to mothers to screen their children for malnutrition. Many students depend on school lunches and considering the rate of job loss in Nigeria, this is a necessary step to ensure that all children are taken care of.
The pandemic has affected Nigeria’s economy and citizens to a grave extent. With oil exports reported at an 18-year low and job losses mounting, COVID-19 has destroyed whatever sense of progress Nigeria experienced since its last recession. With the support of the U.S International Affairs Budget, and with further foreign aid, Nigeria can hope for drastic changes in their job rates and oil exports.
– Anna Hoban