China, the factory of the world and a big importer of Nigeria’s crude oil, has sneezed and the world economy has caught a cold. But it’s no common cold. Not much is known about this more lethal strain of coronavirus but its impact on lives and economies unfolds daily as governments around the world grapple with this pandemic.
This much is known: 25 to 70 percent of people in an infected country are vulnerable – it is transmitted directly or indirectly from contact with “respiratory droplets generated via coughing, sneezing or talking” according to the Nigeria Centre for Disease Control (NCDC) – and it will slow down the global economy as production freezes in China and countries cease to interact in order to prevent the virus from spreading. No antivirals or vaccines have been discovered.
Nigeria is not immune to the health and economic implications of covid-19 but government action or inaction can make a huge difference. Timely information to prevent panic and the spread of misinformation can douse the fear, uncertainty and doubt that make people take terrible decisions at times like this.
Since the first case of covid-19 in Nigeria on February 27, the NCDC has issued several situation reports and, lately, a 39-page interim guideline for health professionals to manage the disease. This proactive response is commendable.
Information on how to identify, diagnose and manage the virus must be spread faster than the disease itself. It gives those who will be at the forefront of treating infected cases a head start. Even though there have been no reports of community spread in Nigeria, what happened in China, where the outbreak started, and is happening in Europe and the US shows the extent to which controlling the spread of this new respiratory infection can strain even the best and most developed public health systems in the world.
Nigeria, unfortunately is ill-equipped to manage an outbreak; our public health system barely copes with treating malaria.
Measures taken in China and the West to reduce the transmission of the virus such as social distancing limit the interaction of people in public spaces; factories, offices and stadiums have been shutdown as people are forced to stay indoors. Hubei province in China with almost 60 million people and the location of Wuhan, the city where the virus first emerged, was locked down for 50-days – the largest quarantine in history.
These restrictions on movement of people have affected trade and travel; and consequently the global economy. It has destabilised the crude oil market.
What’s more, an oil price war between Saudi Arabia and Russia has made a bad situation worse, a nasty headache for Nigeria. Both are pumping millions of barrels of oil daily in a battle for market share. Oil prices are expected to tumble further to $20 a barrel, way below the $57 the 2020 budget of Nigeria is based on.
Last week, in response to what many expect to be a torrid time for the foreign reserves of Nigeria which is solely and overly dependent on oil revenues, the exchange rate of the naira to a dollar went berserk, rising to as high as 420 naira per dollar. The central bank responded with a terse press release more reminiscent of a riot act read out by a disciplinarian headmaster to recalcitrant students during assembly.
Authorities at the apex don’t realise that their inaction is what is triggering panic; the surge in the black market is based on experience. Investors, households and other economic agents know about the consequences of the outbreak of covid-19. Don’t tell them not to panic, show them why they shouldn’t. Because they all know what happened the last time the CBN could not meet the demand for dollars.
