Essay: COVID-19 Pandemic: Its Impact on the Nigerian Economy and Government Directives for Containment

In Nigeria, the presence of the deadly virus known as coronavirus, COVID- 19, was first confirmed officially on 27th February 2020 (Otache, 2020). There are different types of coronaviruses; the Middle East Respiratory Syndrome or MERS-CoV; Severe Acute Respiratory Syndrome or SARS; and novel Coronavirus or SARS-CoV-2 are all caused by coronaviruses and results in severe respiratory illnesses. The 2019 novel coronavirus (SARS-CoV-2, which causes the COVID-19), was first identified in Wuhan, China, among people having pneumonia (R. Nseobot et al., 2020) and has taken the entire world by storm, spreading like a wildfire. Apart from its obvious threat to human health and life, COVID- 19 poses arguably more significant economic risks. The COVID-19 disease was characterized as a pandemic (the highest level of health emergency) by the World Health Organization (WHO) in March. A pandemic is a global outbreak of a disease that happens when a new virus emerges and usually presents an alarming health crisis (CDC 2020). In addition to the disturbing human impact of the COVID19 pandemic, significant economic, business and commercial impact can be felt globally. According to forecast analysis by a London-based global financial consultancy firm, Capital Economics, COVID-19 will cost the world economy over $280 billion in the first quarter of this year, meaning that global GDP will not grow from one quarter to the next for the first time since 2009 financial crisis.
Many governments of several nations of the world have been taking major unprecedented steps to curb the continued spread of the virus; these steps range from closing down of businesses and borders, to complete lockdown of major cities in a bid to prevent more spread of the disease and in order to manage the health concerns of those who have been infected. As reported by (Adekilekun et al., 2020), the Nigeria Government issued various directives and Orders to help contain the spread of the coronavirus pandemic. The Nigerian President Muhammadu Buhari, made the COVID-19 Regulation 2020 in pursuant to the powers conferred on him by Sections 2, 3 and 4 of the Quarantine Act. The Regulation, amongst others, imposed significant restrictions on the movement of persons and goods virtually all over the country, especially in 3 states of Lagos state, Ogun state, and the Federal Capital Territory. The President announced the start of lockdown in the aforementioned cities of the nation, on 30th march 2020, in response to the pandemic and efforts to curb its’ spread in the country. Furthermore, respective state governments also followed suit and imposed varying degrees of restrictions on movement of persons and goods, including public gatherings and markets within their states. The lockdown directives have led to the shutdown of many businesses, especially those that cannot be performed from homes. Only businesses proffering essential services have been exempted from the lockdown directive; hence, the nation’s economy is adversely affected it has been difficult to balance business as usual with public safety during the crisis. Such stay-at-home orders affected many industries in many countries of the world and also among others planted the seeds of recession in several countries (Adekilekun et al., 2020). Physical distancing and lockdowns for extended periods are challenging especially where poverty levels are high. COVID-19 has led to economic suffering in Nigeria, through loss of jobs and other incomes. No company was likely to have prepared for COVID-19, irrespective of business size (Aladejebi, 2020), much less SMEs; who are likely to suffer most in times of crisis. As small and medium-sized enterprises are hammered by the lockdown, many workers have lost their jobs while many are working on reduced work schedules. It is more challenging for Nigeria as she is just recovering from the 2016 economic recession which was a fall out of global oil price crash and insufficient foreign exchange earnings to meet imports (Anthony, 2020). The lockdown imposed by the Federal and various state governments as a means of curbing the threats posed by COVID19 has no doubt adversely affected business concerns in the country. To further examine the socioeconomic effects of COVID19 pandemic on Nigerians, (Samson et al., 2020) noted ‘that the effect of the present COVID-19 pandemic and lockdown on socioeconomic activities is likely to be severe on the well-being of the people, many of whom rely on daily income to cater for their personal and family financial needs’.
COVID-19 isn’t the first pandemic to evert Nigeria. Over 100 years ago, the 1918 Influenza pandemic upended the then colonial region with infections between 50% and 80% of the population causing considerable human suffering and loss, as well as, economic disruptions on trade, healthcare, security and agriculture due to measures taken in response to the pandemic (Oluwasegun, 2017). According to the World Economic Forum (WEF), Non-pharmaceutical interventions (NPIs) such as social distancing can have both positive and negative effects on the economy. NPIs implemented in 1918 resemble many of the policies used to reduce the spread of COVID-19, including closures of schools, theaters, and churches, bans on public gatherings and funerals, quarantines of suspected cases, and restrictions on business hours. In a bid to limit spikes in infections and avoiding mass casualties constrain social interactions and thus dampen any economic activity that relies on such interactions. However, in a pandemic, economic activity is also reduced in the absence of such measures, as households reduce consumption and supply less labor in order to reduce their risk of becoming infected. Thus, while NPIs lower economic activity, they can solve the coordination problems associated with fighting disease transmission and mitigate pandemic-related economic disruption. (Sarkodie & Owusu, 2020) argued that containment measures put in place to reduce health outcomes of the global pandemic have affected environmental sustainability, health and economic development due to the intensity of the global pandemic. Concluding their research on the impact of COVID19 on environmental, health and economic development, they reported that the disruptions caused was also positive as the implementation of preventive measures has impacted the environment (sustainability), promoted more collaborations and necessitated more investment in the health sector of studied countries.
In their research on the aftermath of COVID19 for business in developing countries, (I. R. Nseobot et al., 2020) reported that economies of both developed and developing nations around the world has been push into low output, illiquidity and unemployment, by the disease. The ripple effect of the virus on businesses includes but not restricted to salary downsizing, overtime with no incentives for most of them in other to be more productive, delay in or no emolument, etc. Businesses around the world, especially those in developing countries, have been in a pitiable situation as a result of covid-19 outbreak and the policy of city lock-down measures to contend its spread leads some nation’s economy into bombshell. Business organizations and firms that requires physical contacts with clients are the most affected by the pandemic (Anthony, 2020; I. R. Nseobot et al., 2020). The concept of entrepreneurial orientation and opportunity exploitation was discussed by (I. R. Nseobot et al., 2020). They emphasized that businesses around the world must, of a necessity, if they will continue in existence after the pandemic, for commercial and economic activities to discover and make use of any possible opportunities to gain access to a new market, seek out and exploit new opportunities. Since movement at this time, especially of persons is very difficult as a result of the total lockdown in most states, establishments will have to explore alternative survival strategies, like online engagements, digital advertisement, webinars, etc., in order to drive the economy (Aladejebi, 2020; Anthony, 2020). Despite the negative impacts, the COVID19 pandemic presents a silver lining and opportunities especially as regards technology adoption. With the emergence of covid-19 and city lockdown, as well as social distancing, as a consolidated path for curbing the spread of corona virus around the world, businesses are turning to digital solutions in order to carry out their business processes using ICT tools. A characteristic of the Pandemic has been the switch from face to face to digital connection for schooling, higher education, business meetings, health consultations, shopping, and cultural events, thereby accelerating the utilization of ICT globally (Aladejebi, 2020). In their study on the impact of covid-19 on the survival of Igbo owned businesses in Nigeria, (Chinedu et al., 2020) advised businesses to automate their operational processes using ICT, in other to survive during the Pandemic.