Currently, the Nigerian economy is experiencing a serious economic quagmire due to a decline in oil price and production of goods and services due to the Covid-19 outbreak. This just did not lead to a fall in the demand for oil but it also stopped economic activities from operating due to the social distancing and lockdown policies that were enforced by the government.
Although recessions are not new in Nigeria, previous economic recessions in Nigeria occurred due to an unexpected general fall of oil price in the international oil market, as Nigeria depends mainly on oil as its main source of income. But in 2020, one of the major and backbone sectors which is the public health crisis triggered an economic crisis in the country.
The country is suffering a lot from this disease because the public health sector in Nigeria has poor infrastructure such as poor emergency services, few ambulance services, ineffective national health insurance systems, insufficient primary health care facilities, and these problems in the public health sector have often been linked to the high maternal and infant mortality rates in the country (Muhammad et al, 2017). Currently, Nigeria operates a two-tiered healthcare system with a large public healthcare sector and a smaller private healthcare sector.
Nowadays, cases of Covid-19 are constantly increasing. As of now, there are 28,167 people who have contracted the disease, 11,462 people recovered and 634 dead. This resulting in why some sectors of the economy are still not operating such as schools being closed, manufacturing sectors closed; and markets closed.
This economic recession might be the worst ever for Nigeria. And it may even possibly lead to an economic depression due to the large total decline in production and output.
Although this Covid-19 pandemic in Nigeria coupled with the declining oil price and production, caused this economic crisis, the Nigerian government was still wise to use fiscal and monetary stimulus package as a partial solution to revive falling aggregate demand during the outbreak. It also used public money to slow the rate of business closures and the spread of Coronavirus.
By Habibu Muhammad (B.Sc Economics at Sokoto State University, Sokoto. Nigeria)
Contact details: 10habibu@gmail.com, +2348060160251
References:
Ozili, Peterson K and Arun, Thankom, Spillover of COVID-19: Impact on the Global Economy (March 27, 2020). Available at SSRN: https://ssrn.com/abstract=3562570 or http://dx.doi.org/10.2139/ssrn.3562570