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Economic impact of COVID-19

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Economic impact of COVID-19

Temi Okesanjo

Coronavirus has affected hundreds of thousands of people, and the growing impact on the global economy calls for business leaders to take a lead in providing solutions on the evolving situations and implications of Covid-19 in the business sector.

The question of whether the economy goes into a recession might be determined by the way Nigeria and the rest of the world reacts to the outbreak,  leading companies and businesses like Mastercard, Microsoft and Apple have revealed how the virus is affecting consumer behaviour, in Nigeria, particularly in Lagos, described as the fastest growing city in Nigeria, everything is slowing down by the day, schools are shut down, private companies closed, markets and stores except those food sellers and drugs are to close tomorrow 26th of March 2020,

Lagos is reportedly tracking 1,800 cases 42 Confirmed, Lagos State is also increasing test centres with capacity of 120 tests a day, all leisure services locked down, the government is however only for essential services or emergency, no events, wedding or social activities, we do hope compliance will be enforced appropriately, especially as some people have referred to the COVID- 19 pandemic as the disease of the rich; we certainly have to create more awareness particularly educating people who do not have access to radio, television and the social media.

ALSO READ: COVID-19: CBN puts necessary measures for steady operations

Then, the question of how long this will go on certainly drops on each of our minds. The spread and the increasing numbers of confirmed cases in Lagos, Nigeria is a huge concern as it forces people to stay at home, many people are avoiding supermarkets that attracts a huge number of people, restaurants, and even hospitals as they fear to be exposed to the virus from an infected person around the hospital.

This is inevitably taking a toll on businesses and consumer behaviour on a large scale with both the public and private sectors, It is looking like complete chaos.

In the latest CNBC Global CFO Council survey, in which 40 per cent of companies that already have or expect supply chain issues said it could take between three and six months to get business back to normal once the issue’s end (25 per cent said six months).

While the full economic consequences of this pandemic on small businesses are yet unclear, it’s a threat to businesses; the truth is that the threats are real and on the line, there has been an alarming impact of this virus on stock markets since the start of the outbreak, the travel restrictions, global trade, commerce, tourism, investment and supply chains, how bad could it really get?

The outbreak of the virus in Nigeria and it’s gradual spread is certainly not a good one for our economy. If measures are not taken and the spread is not curtailed, it might have a huge lasting negative impact on bilateral relations across borders, an inflow of Foreign Direct Investment, employment, imports and export trades, industrial activities etc, it might also disrupt the economic forecasts and revenue projections of the nation.

This results might cause inflation and equally impact negatively on many businesses particularly SME’s and start-ups given high uncertainty around production. With states in Nigeria already demanding that only “essential” workers, those providing essential services are the ones allowed to operate, but the definition will have to be made more clear, as the lack of clear business guidance is making it difficult for companies to maintain operations and for supply chains not to collapse.

It’s important to be proactive and strategise as an entrepreneur or business owner though the full financial implication of this can’t be ascertained.

Recall, the major import trading partner of Nigeria is China and China is the second-largest economy in the world. Exports from China to Nigeria were captured as US$1.04 billion during 2018 and were on the increase in 2019 according to the United Nations.

With the state of things, the percentage of imported goods and raw materials is expected to drop, production decline and general business activities affected and consequently hike in the price of goods, because China is still trying to bounce back on economic activities, though they have the highest number of reduced new cases.

The Federal Government seems to be taking prompt, significant actions, as the Central Bank of Nigeria (CBN) introduced the N50 billion.

ALSO READ: N100,000 fine, jail term for coronavirus lockdown defaulters in Lagos

Targeted Credit Facility (TCF) as a stimulus package to support households and micro, small and medium enterprises (MSMEs) affected by the COVI D-19.

Whichever way the Economy turns will be largely dependent on how much or little the COVID19 Pandemic ravages the Nigerian and global marketplace. This means that we all have a role to play in ensuring the impact is not significant, by deliberately working to halt its progress.

Healthcare experts have recommended social distancing; washing of hands with soap and water, constant use of hand sanitizer and self-isolation. Where symptoms are noticed;  or there’s been contact with someone suspected of exposure to the virus, steps must be immediately taken to self-isolate and test for the virus.

Vanguard

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