Experts at a forum organised by the Lagos Chamber of Commerce and Industry (LCCI) on the Covid-19 pandemic have advised the federal government not to rest on its oars in its efforts to mitigate the impact of the disease on the Nigerian economy.
Speaking at a forum in Lagos yesterday, they acknowledged policy measures that had already been taken by the government to contain the impact of the virus on the economy.
The forum was designed to highlight the implications of the COVID-19 outbreak on the Nigerian economy and deliberate on the most appropriate policy responses that would help mitigate the impact of the virus as well as subsequent shocks on the economy of Nigeria.
The LCCI President, Mrs. Toki Mabogunje, said that businesses, factories and schools were shutting down due to the virus.
"Conferences, sporting events, football matches, music concerts and business meetings have all been suspended. Countries are imposing wide-range travel restrictions.
Trade are on hold and global airlines have cancelled flight to affected areas. Global equities and commodities markets have been severely affected.
Oil prices have been hit hard due to drastic cut in global oil consumption, compounded by the on-going price war between Saudi Arabia and Russia.Putting these together, the outlook for the global economy looks bleak," she added.
"As a fallout of the pandemic, Global Purchasing Managers Index (PMI), an index of the prevailing direction of economic trends in the manufacturing and service sectors, is fast deteriorating just as its fears have wiped off $7 trillion in market value of listed firms worldwide in two weeks.
"There is also restricted mobility and lower manufacturing through put as a result of the Covid-19 outbreak which have significantly depressed oil prices (~30% below their levels at the start of the year) even as businesses whose supply chains are closely linked to China are increasingly revising profit forecasts as Apple, Nike and United Airlines have reportedly, warned that they would not meet their earnings forecast due to the impact of the virus' outbreak on supply chains.
"In Nigeria, the impacts of the virus include decline in oil revenue due to reduced demand from key foreign customers, fall in foreign exchange reserves as a result of a fall in oil export oil revenue, which might impact FX stability, cost of imports from key trading partners such as Italy and China are likely to spike, resulting in a cost-push inflation ,rate of unemployment may increase due to slowdown in economic activity, potential fall in tax revenue and soaring debt, which would impact developmental outcomes, potential decline in aggregate GDP due to slowdown in economic activity," the LCCI boss added.
On the political fallouts of the crisis, CEO of Economic Associates , Dr. Ayo Teriba, one of the speakers, identified the ongoing oil price war between Saudi Arabia and Russia, travel bans and export bans on medication/gadgets as part of the impacts on Nigeria.
"Nigeria is also at the receiving end of some of the political fallouts like impact of the breakdown in the OPEC efforts to cooperate with OPEC countries on oil price, the travel bans across the world, and the bans imposed on the export of some medications and face masks by some countries as they fear they may not have enough for their residents as the pandemic spreads within their countries," he said.
On the challenge for Nigeria's economic outlook Teriba argued that, "how long the adverse social and economic fallouts for Nigeria would last depends on how long it takes before the world can bring the pandemic sufficiently under control for the restrictions of movement and public gathering to be lifted."
Ajibola Olomola , a Partner at KPMG also said the, "Covid-19 pandemic is increasingly putting pressure on the world economy as the momentum across key economies is grinding to a halt" and from a global perspective, governments and corporates are increasingly devising coping mechanisms both structurally and functionally to deal with the impact of the pandemic."