Coronavirus (COVID-19) Pandemic, Economic Consequences and Strategies for Ameliorting Macroeconomic Shocks in Nigeria’s Economy

Abstract

This study provides multi-disciplinary assessment of the coronavirus pandemic transmission in Nigeria, magnitude of COVID-19 confirmed cases, recovery, deaths, and inventory of infected person with recovery lags. It applied the statistical outcomes in predicting spilling over to subsequent periods. It identifies economic sectors worst hit by COVID-19 triggered recession, simulate the estimates of potential fiscal and other macroeconomic impact of the pandemic in the country in short run alongside synthesis of restoration and sustainability strategies. Secondary data relating to coronavirus infection cases, spreads, recoveries and fatalities were assessed, using the susceptible-infected-recovered” (SIR) model in absence of mass testing and probable cessation from health crisis management. It identified economic sectors/activities being devastated by COVID-19 induced recession, provides interim estimates adverse impact based on economic peak and down-turn cycle method. The study also measured the magnitude of macroeconomic shocks in Nigeria’s economy using a standard global computable general equilibrium model and exploration of sustainability strategies based on synthesis of extant reports were employed. These data-sets were obtained from the Nigerian sources and partly from global sources. Furthermore, it utilized trend analysis derived from on empirical data of extant daily confirmed cases, discharges and hospitalized person together with tentative projection of additional confirmed cases as from July–September, 2020. Results revealed that confirmed cases in Nigeria will increase steadily from 25694 (in June) to around 74825 by the end September and expected to reach 121000 by end of year 2020. This suggests that the pandemic is likely to persist up to the second quarter of 2021. Education, transport (aviation), hospitality, tourism and sports businesses; trade (informal sector) in the services sector; petroleum exploration in mining sub-sector are most severely contracting activities industries in the economy. Given the prevailing intensity of recession, the result indicates that a reduction of about 5-to-7% in GDP will be recorded in 2020. Result of variance analysis of fiscal budget estimates indicates adverse increase of -2% in overall fiscal deficit balances during the periods, which may aggravate debt burden with decline of about -5.7 percent and up to -7 percent in nominal GDP. Health, education, agriculture, petroleum exploration; petroleum refining and petrochemical industries, manufacturing (particularly pharmaceuticals), energy and power generation should be given priority in the sustainability programme.