• Saturday, June 22, 2024
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These 3 industries have growth potential in Nigeria’s corona economy, according to Agusto & Co.

Covid-19: Fiscal and monetary policy imperatives for Nigeria

While a lot of Nigerian businesses have been disrupted by the outbreak of the deadly coronavirus amid the slowdown in global economic activities Agusto & Co. sees the opportunity for some industries in the country.

The lockdown in some commercial cities in Africa’s largest economy and the increasing adoption of the work-from-home activity was the basis for the growth projections by the Lagos-based consulting firm.

“We believe a few industries are set for strong growth as a result of the pandemic,” Agusto & Co. said in a recent publication-COVID-19 in Nigeria: Economic Perspectives and Mitigating the Risks.

The virus outbreak which has led to the crash in crude price, due to a slump in demand and a spike in supply has shown signs of dragging Nigeria’s crude oi-dependent economy into recession with many industries expected to take the most hit.

“We believe the pandemic’s effects on economic activities and businesses in Nigeria will be dire,” Agusto & Co. said.

To curtail the spread of the deadly coronavirus, President Muhammadu Buhari recently announced the 14-day extension to a lockdown in Lagos, Abuja and Ogun states to combat the coronavirus pandemic.

Buhari said “it has become necessary to extend the current restriction of movement” that was set to expire later in the day.

Nigeria reported 35 new cases of Coronavirus on Friday, this brings the total number in Africa’s most populous nation tot 442 confirmed cases, as compiled from data by NCDC.

Agusto & Co., however, expect the following industries to post strong growth as a result of the virus outbreak in the country.

Read also: COVID-19: Time to prioritise construction to save the economy

Agricultural sector

The increasing spate of a lockdown in Nigeria brings the subject of food security to the core and Agusto & Co. believes the agricultural sector will leverage the rush for food to post strong growth.

It stated that “grains and other staples (particularly locally grown rice)” are mostly “in a strong position to grow as food demand spikes from panic buying.”

The Federal Government recently announced that all markets in states where a lockdown was imposed-Lagos, Abuja and Ogun will be allowed to open between 10 am and 2 pm daily so that the residents of the states can buy food items.

“For markets, only shops and stalls selling food and groceries shall be allowed to open to customers between the hours of 10:00 am and 2:00 pm,” Aliyu Sani, the National Co-coordinator of the Presidential Task Force on COVID-19 said.

Telecommunications industry

With the surge in work-from-home activity amid the outbreak of the deadly coronavirus, there is potential for the increase in data consumption, and the use of airtime for voice calls (as many are frequently checking up on their loved ones).

Agusto & Co. expects an increase in consumers’ demand for these services to fuel growth in Nigeria’s telecommunication industry.

“Working remotely implies that several white-collar professionals will consume more internet data for work and virtual meetings leading to a spike in demand for data,” Agusto & Co. said.

The consulting firm also expects that more telecoms consumers (beyond the white-collar professionals) will spend more time on social media and other streaming apps at this time.

“We believe these trends will help drive growth in the telecommunications industry in 2020 through to 2021,” it said.

Data by the Nigerian Communications Commission (NCC) shows that Nigeria’s telecommunications industry has a reach of 86 percent, and with 182.7 million customers, the industry has the single largest customer base in the country.

Home and personal care industry

Agusto & Co. expects the home and personal care industry especially for those who have been able to adapt rapidly to the spike in demand for hand wash and sanitisers to record growths in revenue.

“The grocery focused supermarkets also represent a bright spot for the times. The rush to stock-up on groceries by households has been the major driver of growth for this segment of the economy,” it said.

Patronage of items like hand sanitisers, disinfectants, hand-washing soaps and gloves increased on request in most cities in Nigeria as many adopted preventive measures.

The trend has remained unchanged since Nigeria reported its first coronavirus case in February.