• Friday, March 29, 2024
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COVID-19’s unprecedented second wave: Are we prepared or is a repeat imminent?

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Just when the world had started to breathe a sigh of relief with the emergence of new vaccines, lifted restrictions and the commencement of global trade, a second wave of the COVID 19 virus with new variants has swooped in, bringing the world to a new brink of uncertainty of how the year 2021 would play out.

In Wuhan the original epicentre of the pandemic, residents took to the streets in celebration with the belief that the disease was finally conquered and out of the way. In major cities of Nigeria, locals optimistically started re-opened pubs, bars, parks and restaurants. In most parts of the country, children started to head back to kindergarten and schools (primary and tertiary), and in Lagos (the hub of commerce) traffic returned once again to the mainland and Island areas of business activities.

Nevertheless, as life started to get back to normal, health officials began to warn of a second wave of coronavirus in the final months of the year 2020 and early 2021. Tedros Ghebreyesus, WHO Director General stated that “recent virological studies reflect that a relatively low percentage of the population have anti-bodies to COVID-19. This implies that coupled with the possibility of a new wave of the virus, a large percentage of the population are still susceptible to the existing virus”.

Looking back at historical viral outbreaks, there is a precedent for multiple peaks in a pandemic. The second wave of the 1918 flu was more deadly than the first. Could this mean that the worst is yet to come with the COVID 19 Virus? According to the Centre for Disease Control and Prevention, the United Kingdom has started to experience several new mutations of the COVID 19 virus with multiple new variants circulating globally. The variant existing in the UK, is said to spread more easily; however, no evidence as to whether it is more severe than the first variant of the virus has been given. Other countries that have started to experience these new variants are the US and Canada.

In the wake of nations starting to take tentative steps back towards normality, this new wave threatens to stop that progress once again in its tracks. Scientists before the second wave stated that, ‘it is not a question of if there would be a second wave of coronavirus globally but a question of when’. This implies that the loosening of restrictions provides the opportunities for the virus to spread once more and at a greater speed.

Out of the last five pandemics the world has faced in about a century, four had multiple waves of infection outbreaks, in some cases the second or third waves turned out to be more severe than the first. As the Federal government weigh the trade-offs between re-opening the economy fully or continuing the lock-down restrictions, history thus has a vital role to play in this decision process.

As the debate of a “second lock-down” drags on, the Spanish flu of 1918 (the worst pandemic in modern history, which was estimated to have infected a third of the world’s population) offers some clues. In 1918, the US had no co-ordinated pandemic plans at a Federal level; it was therefore left to local authorities to decide how and when to intervene to prevent the spread of the disease.

Because tackling the second wave of the infection spread was orchestrated at a local level, the intervention varied widely, this led to mortality rates and the pace of economic recovery differing from country to country at the end of the pandemic. In cities that implemented strict social distancing measures quickly and for longer experienced rapid growth in both manufacturing activities and banking activities a year after the pandemic was over, the evidence suggests that aggressive social distancing measures not only reduced mortality rates but were also economically beneficial. However, it is still difficult to compare the economic outcomes of the Spanish flu of 100 years ago with that of the coronavirus.

This is due to the advancement in technology, global supply chains, the larger role of services and better communication tools may ease economic fall-out significantly, which limits direct comparisons between the two pandemics. However, the evidence does imply that decisive social restrictions to reduce the severity of a pandemic plays a key role in the economic recovery process. So how can both livelihoods and lives be saved? Well there are no easy answers, but looking into the past can offer a glimpse of the future. After all, a healthy economy does not happen without a healthy population.

The global lock-down being the single biggest experiment in human history has been probed with multiple questions from government officials and researchers. In Nigeria, answers to those questions seem far-fetched, hence BusinessDay analysts subdivided them into four categories which include the four quarters of 2020 (Q1-Q4) to shed some light on those questions as well as provide some answers for them. Each quarter represents a significant period during the novel coronavirus pandemic. Q1 represents the GENESIS or IGNORANT PHASE, Q2 represents the PANIC PHASE, Q3 represents the LOCK-DOWN PHASE and Q4 represents the LOCK-DOWN EASE PHASE.

The Genesis phase (Q1) experienced a rather stable inflation rate from the previous year with figures dangling between 12.13%-12.26% while exchange rate spiked from $1-N307 in the previous year to $1-N376 in the early parts of 2020 as a result of the Naira devaluation. Business confidence dropped by 3.7 basis points as it slumped from 30.3-26.6 in the first quarter. Consumer confidence dropped to -0.3 basis points from 3.3 that was experienced in the last quarter of 2019. As a result, GDP growth slumped to 1.95 from the 2.14 in the previous year (2019).

The second phase being the Panic phase experienced a further rise in inflation to 12.56% predominantly as a result of food inflation, exchange rate dropped to $1-N387 largely due to the unprecedented surge in oil prices, business confidence slumped further and harder to -66.2% as a result of the total lock-down and the vast uncertainty of when the lock-down was going to come to an end as well as the new normal which was imposed abruptly on the general public.

Consumer confidence plummeted as well to -29.2% since many people were laid off from their jobs and others had limited access to essential goods that were available for purchase due to the panic and the anticipated lock-down. This put further strain on the GDP as it dragged the economy into an undesirable recession with figures swaying around -6.04% thus dragging the country into negative territory.

The third phase being the Lock-down phase took a toll on the economy but created an avenue for Nigerians to begin to adapt to the situation and subsequently accept the new trend as the ‘NEW NORMAL’. Businesses began to find ways around the crisis hence boosting business confidence from -29.2% in the previous quarter to -17% in the 3rd quarter. Exchange rate remained the same at $1-N387, Inflation kept rising as it spiked from 12.56% in the second quarter to 13.71% in the 3rd quarter (LOCK-DOWN PHASE). Consumer confidence grew from -29.2%-(-21.2%) as people were beginning to adapt to the new norm. As economic activities gradually resumed GDP grew from -6.04%- (-3.14%) in the third quarter. In November 2020, inflation spiked to 14.89%, exchange rate remained at $1-N387.

In December, business confidence rose from -17%- (-15.2%) predominantly as a result of the stock market performance, which grew by 50% annualized rate. GDP projections for the 4th quarter stand at 3.64% due to the unrelenting rising rate of inflation. Analysts purport that a strategic blend of Q3 (LOCK-DOWN PHASE) and Q4 (LOCK-DOWN EASE PHASE) be implemented for unforeseen contingencies which may accompany the second wave of the pandemic. Nonetheless, the general public still have pertinent questions which require answers in order to boost their confidence in anticipation of the second wave. Some of the questions put forward were:

• In what ways would the second wave be different from the first wave? BusinessDay analysts believe that the main way in which the second wave would be different from the first wave is that it would be (with luck) less universal and more isolated outbreaks and be focused on people and places that are vulnerable. One important addition is the fact that some places have not finished the first wave yet so it is quite early to talk about the second wave, but in those places where the rate of infection has come down, the hope would be that any future wave can be more controlled into particular phases.

• Assuming a second wave happens in Nigeria, what is the likelihood that people would comply? A direct answer cannot be provided for this question. Reactions are going to vary from country to country. However, governments would be much more reluctant to try and put in a wholesome lock-down because they would have seen the economic consequences and the economic costs of that hence they would try and be much more targeted with any lock-downs and with regards the co-operation of the citizens would depend largely on whether the citizens actually trust the government.

• Can we expect further waves until we reach herd immunity? This is a disease that no one knew about 9 months ago and world scientists are working tirelessly to find a vaccine, until then the world would keep seeing it re-occur. It’s the duty of the government to start to institute the right measures to curtail its spread in tandem with its citizens as it’s a threat that requires the joint effort of both parties to curtail the spread of the virus and subsequently the genesis of the second wave.

• How can the world collaborate to stop the spread of COVID-19? The science side has been swamped with huge unprecedented collaborations as there have been collaborations in the vaccine development department; various countries of the world have been working together to develop new vaccines and major developments have been made thus far. Secondly, richer countries have been assisting poorer countries who have been hit hard by the pandemic.

• Will the stock market decline again with the second wave? What is striking right now is the extraordinary bounce back we have had in the Nigerian stock market particularly in the last quarter of the year and the dissonance between that and the degree to which the economy is being harmed. Stock markets are clearly forward looking, they are anticipating more stimulus and they are anticipating a very rapid recovery. BusinessDay analysts anticipate that the economy would see a recovery but it would not be where we were before. ‘The new normal’ is going to be a diminished economy and an economy that needs a lot of restructuring in some sectors whether its tourism or hospitality are much weaker than they used to be and would take longer to recover and others (particularly big tech companies) are doing extraordinarily well. It thus goes to show that there a lot more economic turmoil ahead.

• What do you think are the positive effects of the pandemic? One of the major positives of the pandemic is greater flexibility in how people work (working from home) and that in turn would lead to a better work-life balance. The down-side would be an increase in the inequality of the labour market between low skilled jobs (where you have to be at your job) and those who can do their jobs from home. It would also be a lot harder for entrants into the work force as most jobs are being done remotely from the comfort of their homes. There is a risk over the long term that companies would lose some things in terms of innovation and productivity because there would be no more serendipitous sharing of ideas which is obtainable when you bump into people at the office or work space.

• Can Nigeria afford another long-term lockdown? The answer is obvious… it’s a big NO. We have learnt that there are huge economic costs that emanate from complete lockdown and in particular that is a cost that is very hard for Nigeria to bear. For advanced economies it’s possible to do the huge fiscal and monetary support that’s required. In Nigeria, it’s harder both because social distancing is harder and it’s not easy for the government to provide the scale of support that is required.

In a nutshell, the reality is that until a vaccine is produced and widely distributed the world would continue to have more waves in the nearest future. However, with the necessary precautions being observed both by the government and its citizens, the pandemic is bound to be another debris floating away in the sands of time.

 

TOCHUKWU OKAFOR & GIFT ONYEDINEFU