In late December 2019, news of a rapidly-spreading pneumonia-like virus in China started spreading across the world. The novel coronavirus, now called COVID- 19, which causes respiratory illness was declared a global pandemic by the World Health Organisation on March 11. It has spread to at least 170 countries, infecting over 600,000 people and killing more than 30,000 people.

Since the first confirmed case of coronavirus was announced n Nigeria on the 27th of March, There have been over 224 confirmed cases of the virus. The Federal and State governments have taken drastic measures in an effort to curb the spread of the virus.

COVID-19 has dampened demand for crude oil, Nigeria’s main money spinner. A decline in demand and price war have slashed prices to from $40 to $25. This means less revenue for Nigeria: 31% of the 2020 budget was to be funded from oil revenues at an estimated price of $57 per barrel.

Income from oil accounts for around 90% of export earnings from oil. In the absence of petrodollars Nigeria risks a severe crunch in income and will affect states which rely on the Federal Government for 86% of their income.

The naira won’t be spared too. Without an adequate foreign reserve, slowing dollar inflow and capital flight at the same time, the CBN “adjusted” official rate to 360/$ from 306/$. The currency is sold to foreign investors at 380/$ as against the previous rate of 360/$. Yet, analysts say the naira should trade at around 400/$ to be at its fair value.

Already manufacturers cannot produce as much as they used to due to lack of raw material supply from China and the rest of the world. If Nigeria shuts down, businesses won’t operate and lay-offs could follow.

As of now, Lagos-based FDC says the probability of a recession is 45% while manufacturing PMI which predicts output growth fell to its lowest in almost three years.