Effect of Coronavirus on Nigeria’s Economy

coronavirus on the economy

A deadly flu-like infection is causing the global economy to shiver, and Nigerian manufacturers are not left out, as development of the virus holds major implications for them. Known as the coronavirus, the epidemic has ravaged the Central province of the world’s most populous nation, China, from where the virus is believed to have originated from and spread to other parts, making countries of the world take a cautious stand. Over 70, 000 people have been confirmed to have been diagnosed of the virus while the numbers of deaths from the outbreak have exceeded 2000 as of February, according to China’s National Health Commission.

With China being one of Nigeria biggest trading partner, there are concerns that Nigeria would take a big hit as a result of Coronaviruus outbreak. Some businesses are already being affected.

Since the coronavirus started in early January, there has been a slowdown in the demand of oil from China which happens to be the world’s largest importer of the commodity, bringing in about 10.04 million barrel per day.

The IMF slashed its economic growth forecast for Nigeria, citing falling oil prices, as it urged Africa’s biggest crude producer to diversify its oil-dependent economy. Oil still provides more than half of Nigerian government revenues and 94 per cent of its foreign exchange, according to the IMF. Oil prices have also fallen about 13 per cent this year on plunging Chinese demand, reflecting a slowdown in economic activity caused by the coronavirus outbreak. Nigeria does not export much oil to China but every drop in oil prices costs Nigeria a huge amount of money.

China also being a major purchaser of natural resources from the continent, the impact of China’s economic engine shifting downward due to the coronavirus could have a deep impact on Nigeria economy.

Nigeria Manufacturers are beginning to panic, falling oil prices does not sit well on an economy known to majorly depend on the oil sector. A decline in oil prices could mean lower dollar coming into the country and manufacturers would need dollar to buy input and equipment for their day-to-day operations. Manufacturers need good roads, constant power, and other basic infrastructure to remain competitive and produce at a low cost.

New studies show that the new coronavirus outbreak and subsequent shutdown of many parts of China could impact more than five million businesses worldwide, and Nigeria might not be left out.

Nigeria’s government however, claimed to be ready to face any issue or effects of the deadly coronavirus on our economy.

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