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07030248044ABSTRACT
This research examined the effects of corona virus (COVID-19) on the Nigerian economy. Relevant conceptual, theoretical and empirical literature was reviewed. Findings revealed thatCorona Virus (COVID-19) significantly influenced inflation in Nigeria. The finding of the study also reveals that Corona Virus (COVID-19) significanlty influenced export in Nigeria. The findings of the study also reveal that the corona virus (COVID-19) on the exchange rate in Nigeria. The finding of the study also reveals that corona virus (COVID-19) sigificant ainfluence unemployment in Nigeria. It was therefore concluded that Covid-19 significantly impacts the economic growth in Nigeria. It was recommended that the government should give financial support for the diversification of many elements of small and medium enterprises (SMEs), such as: agriculture, manufacturing, beauty/cosmetics, etc.
CHAPTER ONE
INTRODUCTION
Since it was first discovered in the Chinese city of Wuhan, Hubei Province, a commercial hub in China, late 2019, the contagious spread of the novel Corona virus, a transmissible virus produced by the new type of corona virus SARS-CoV-2, also known as COVID-19, has severely disrupted countries' economies, the society, and businesses (both individual and corporate) (Emenyi & Effiong, 2020). Small and Medium Scale Enterprises (SMEs), which are the powerful catalyst that form the real fabric of a nation's economic development, appear to have been one of the sectors worst-hit by the disease outbreak as countries struggle to cope with the uncertainties of this crisis and businesses continue to implement their pandemic response strategies and palliatives. The World Health Organisation (WHO) later declared this dreadful illness to be pandemic, which has since increased the risk of business environments, particularly those of SMEs, being plagued by a variety of difficulties including significant interruptions and halts in operations, fluctuations in business operating earnings, and a general decrease in business functional areas and economic growth of the countries (Aderemi et al., 2020, Enesi et al., 2021, Akintola et al., 2021 and IMF, 2020). Due to the exceptional expansion and extent of its damaging effects on all corporate activities as well as the economies of nations, its occurrence has indeed remained pandemic in scope and character, endemic in effects, and severe.
A category of viruses that can transfer from animals to people includes the corona virus (COVID-19), formerly known as SARS-COV-2 (Augustine, 2020). Wuhan, a Chinese city of 11 million people with a sizable industrial, educational, and scientific foundation, is where COVID-19 first emerged (Ayittey, Chiwero, Kasamah,&Dzubar,2020). It was viewed as a regional health issue whose potential global risk was grossly overestimated and not as a threat on a global scale.Doctors and other professionals tried unsuccessfully to destroy the virus in the beginning (Huang et al.2020). The first occurrences were reported on December 31, 2019, in Wuhan, Hubei province, China, where the majority of fatalities were at the time. 2020 (Baker, Bendix, and Frias). Following notification of the virus's first incidence to the World Health Organisation (WHO), the COVID-19 pandemic outbreak was subsequently declared a worldwide emergency on January 30, 2020 (WHONC, 2020). China had previously experienced crises of this nature. The Severe Acute Respiratory Syndrome, subsequently known as SARS-COV-2, ravaged China and many other countries in the years 2002–2003. It was initially ignored but later spread to 37 countries. Initially, this virus affected more than 800 people, killing 750 of them, and it would later rank among the most lethal pathogens in recorded human history (Augustine, 2020). The principal method by which SARS-COV-2 transmits to humans is by contact with respiratory fluid carrying the infectious virus.The three main methods of exposure involve inhaling very small respiratory droplets and aerosol particles, splattering or spraying respiratory particles or droplets directly onto exposed mucous membranes in the mouth, nose, or eyes, and making direct contact with mucous membranes with contaminated hands, either directly by respiratory fluids contaminating the virus or indirectly by making direct contact with surfaces that have the virus (WHO, 2022)
There have been 8437 infections reported overall. Of these incidents, 7452 (90.4%) led to recovery, while 813 (9.5%) were fatal (WHO 2003). Another wave of diseases was brought on between 2012 and 2013 by the Middle East Respiratory Syndrome (MERS), which is related to the coronavirus. Jordan reported the first MERS case in the beginning of 2012. A total of 2600 laboratory-confirmed cases of MERS have been recorded worldwide, with 935 associated deaths and a case-fatality ratio (CFR) of 36%. Saudi Arabia accounted for the majority of these instances, with 2193 cases and 854 deaths connected to them (CFR: 39%) (WHO, 2022).
According to data, as of June 20th, 2020, there were 8,753,853 verified cases of COVID-19 worldwide, and 463,281 people have died as a result. This revealed a death rate of 5.29 percent and a recovery rate of roughly 20 percent (WHO, 2020). Less than a year later, in October 2021, there were 34,804,348 confirmed cases worldwide, with 1,030,738 (2.96%) fatalities (WHO, 2020a: 2020b). Interestingly, Africa had a distinct COVID-19 experience compared to the rest of the world, with the fewest total cases on all continents (WHO, 2022). The local spread of imported cases led to the peak of the first COVID-19 wave in Africa, which occurred between June and August of 2020.The reopening of airports in various African countries between July and November 2020, the reopening of schools, travel, and a failure to abide by social distancing rules all contributed to the second wave peak, which took place between December 2020 and February 2021. The third wave, which occurred in June/August 2021, was brought about by the Delta Virus's entry into Africa. Several countries, notably Angola, Congo, and Kenya, saw a fourth wave in September (WHO, 2022).
An Italian individual who had previously visited Milan, Italy and returned to Lagos on business was engaged in the first official case identified in Nigeria on February 27, 2020. Nigeria had a total of 19,606 confirmed cases as of June 20. Of those, 6,718 had been released, and 506 had passed away. These numbers represent, respectively, recovery rates of about 35% and fatality rates of 2.6%. Consequently, as of 2022, there were 266,283 confirmed cases overall, 3155 deaths, and 3485 active cases.
The pandemic epidemic has a significant impact on the Nigerian economy. Key economic operations have been severely damaged worldwide, especially in Nigeria, as a result of the lockdown in the world's major economies that followed the covid-19 epidemic. It can be inferred that a sizable portion of the producing elements were at present inactive and that the cyclical flow of money had been severely constrained. Since most firms were shut down, it was harder to pay taxes to the government. In addition, the closure of airports and seaports to impede the pandemic's spread resulted in a significant decrease in international trade.Ironically, the government transferred payment grew greatly since so many governments throughout the world had spent money on palliative to alleviate the impact of the lockdown on individuals. The rise in government spending necessary to combat the impacts of COVID-19 led to an increase in the nation's budget imbalance and vulnerability to high public debt vulnerabilities. The country's different monetary policies have also been impacted by the diminishing global capital flows, which have put tremendous pressure on Nigeria's foreign currency reserve and exchange rates (KPMG, 2020).
The covid-19 pandemic has had a significant negative impact on the Nigerian economy, including employment losses, a major reduction in the income of the poor and informal workers, business closures, food and agricultural instability, a sharp decline in oil earnings, school closings, a high death toll, and economic uncertainty. Based on this context, the current study aims to investigate how Covid-19 has affected the Nigerian economy.
People, information, products, and money have all struck a brick wall during the COVID-19 pandemic-induced global lockdown, limiting the circular flow of income among all nations in the world, whether they are developing, less developed, or developed. This was due to the lockdown restricting traffic and restricting human and vehicle movement, which had a negative effect on economic activities and caused a decline in economic transactions, a decrease in household spending, an increase in economic unpredictability, and a consequent decline in business revenue.After the lockout, people and companies immediately ran out of currency, making it impossible for them to execute the necessary transactions. Because the green revolution is an essential stage before the industrial revolution, the issue was made worse by the reduction in transport services, which may restrict agricultural activities and jeopardise economic progress (Inegbedion et al, 2020).
Additionally, a significant number of people lost their jobs as a result of the Covid-19 pandemic epidemic, and many more jobs were in danger. The epidemic worsened Nigeria's unemployment issue (CSEA, 2019; National Bureau of Statistics, 2018; NSEG, 2019). But it was then forecast that the epidemic will raise the unemployment rate to roughly 33% by the end of 2020 (Obiezu 2020). Numerous businesses, particularly small and medium-sized businesses (SMEs), were also forced to close due to the epidemic. Due to their vulnerability and limited resources, SMEs were severely impacted by the pandemic's outbreak; actions taken to stop the spread of the disease, such as self-isolation or quarantine, social distancing, a ban on social gatherings, and the closure of markets, had a negative impact on their operations, sales, and earnings. Many SMEs experienced supply and demand chain interruptions during the outbreak. The lockdown and travel restrictions had a significant negative impact on the supply networks and the demand for commodities. Nigerian companies, for instance, import products from China (Ozili, 2020). However, the supply of such items and the ability of such organisations or businesses to continue operating were significantly impacted by the prohibition on foreign travel during the pandemic.
Nigeria's economy is built only on a single product (Agbaeze & Ukoha, 2018; National Bureau of Statistics, 2019). For its foreign exchange revenues, the nation is largely dependent on crude oil, an exhaustible resource. As a result, it has struggled to develop optimistic financial plans that may have sparked economic growth (Inegbedion et al., 2020). The global market for crude oil experienced a decline in price as a result of the COVID-19 epidemic.Crude oil's price dropped from more than $60 per barrel to less than $30 per barrel (Ozili, 2020), which had a negative effect on the revenue Nigeria got from the sale of crude oil and had an effect on Nigeria's 2020 budget. The levelling of crude oil prices resulted in a loss of revenues for the federal, state, and local governments, which had an immediate impact on their ability to carry out their responsibilities and pursue their objectives for growth and development.Global value chains, which Covid-19 has adversely impacted, now account for more than two thirds of all trades worldwide (dollar, 2019). One could conclude that Covid-19 had an impact on the Nigerian economy based on the available research, statistical evidence, and intuitive assessment. Based on this context, the current study attempts to address a gap in the literature by analysing the effects of COVID-19 on the Nigerian economy.
1.3 Research Questions
The following questions guided the present study:
Objectives of the Study
The main objective of this study is to examine the effects of corona virus (COVID-19) on the Nigerian economy. Other specific objectives of the study include;
1.5 Justification For The Study
The study on the impacts of the corona virus disease (COVID -19) on the Nigerian economy will be helpful as it aims to explore the prevalence of the disease, the causes, and the repercussions of the disease on the various sectors on the Nigerian economy.
The research will also contribute to the body of knowledge already available on the effects of the disease on the Nigerian economy by educating people about the virus mode of transmission and the preventive steps taken by the government to stop the disease’s spread and limit the effects on the economy as a whole
The study will cover the effects of the corona virus disease (COVID-19) on the Nigerian economy. The areas included in this study are inflation, export, exchange rate and unemployment from 2019 to 2020.
1.7 Organizaton Of The Study
This study will be arranged in five sections; chapter one, chapter two, chapter three, chapter four and chapter five. Chapter one is made up of the background of the study, the problem statement, research questions, objective of the study, justification of the study, scope of the study and the organization of the study. Chapter two explores conceptual, theoretical and empirical literature. Chapter three covers the theoretical framework, data sources, model specification, techniques of estimation, and a priori expectation. Findings are given and discussed in chapter four while the summary, conclusions, and recommendations re contained in chapter five.
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