• On Monday, March 2nd, 2020, the global coronavirus death toll passed 3,000 and almost 90,000 cases worldwide.
  • The Organisation for Economic Co-operation and Development (OECD) slashes the 2020 global growth forecast by 0.5% over coronavirus fears.
  • Business Insider SSA looks at five ways the global outbreak could hurt businesses, economy, and individuals.

On February 27th, 2020, Nigeria recorded the first case of coronavirus in Sub-Saharan Africa at a time the global economy is beclouded by the outbreak of the virus in China.

Earlier, the National Bureau Of Statistics (NBS) reported a GDP growth of 2.3 % for Nigeria in 2019, representing a sluggish path of recovery and fragility to external shocks such as the impact of coronavirus around the world.

On Monday, March 2nd, 2020, the global coronavirus death toll passed 3,000 and almost 90,000 cases worldwide, according to the live chart of ChannelNewsAsia. The Organisation for Economic Co-operation and Development (OECD) also slashed the 2020 global growth forecast by 0.5% over coronavirus fears.

Live chart on Coronavirus outbreak (channelnewsasia)
Live chart on Coronavirus outbreak (channelnewsasia)

A report by the Overseas Development Institute (ODI) estimated Sub-Saharan Africa may lose up to $4 billion worth of exports from China. Business Insider SSA looks at five ways the outbreak in Lagos may affect Nigerians:

1. Strict access to nations, most especially not-yet-affected countries

Nigerians may find it difficult to enter and/or face strict scrutiny at airports. The confirmed case may add more injuries to the already difficulties Nigerians faced at the international scenes.

What is in it for individuals:

BBC reported that countries around are already closing their borders and denying entry to all foreign visitors from China. Sources also said airport officials in Ghana are already stigmatising passengers from affected nations.

A health worker checks temperature of traveller as part of Coronavirus screening procedure at the Kotoka International Airport
A health worker checks temperature of traveller as part of Coronavirus screening procedure at the Kotoka International Airport

2. Dip in Nigerian stocks

Last Friday, investors on the Nigerian bourse lost N308 billion as market capitalisation dropped to N13.657 trillion. During the day’s trading, the equities market closed negative with only two gainers against 41 losers, while Year-to-Date (YTD) returns currently dropped by 2.33%. On Monday, the market also closed negative, wiping off another N208 billion from investors.

The fears can be ascribed to the confirmation of the first coronavirus outbreak in Lagos, Nigeria. The Nigerian stock market follows the same pattern as the US and China stocks.

What is in it for individuals:

According to Investopedia, a fall in stock values create fear for the loss of wealth and purchasing power. Stocks movement is also one of the key ways to determine a nation’s healthy economy.

3. Dip in oil price leading to recession

Oil remains Nigeria’s main cash cow. If the global oil price falls below $50 per barrel, it will significantly impact on the Nigerian economy and may result in another recession. Last week, the global price dropped below $50 per barrel, as tensions of coronavirus heighten globally. A dip in global oil prices can also lead to the devaluation of Nigeria’s local currency.

Analysts at Afrinvest had predicted a devaluation of the Naira around mid-2020. The firm based its prediction on three consecutive quarters of weakness in the current balance account, and only a drastic increase in international prices of crude oil can avert such.

Nigerian naira banknotes are seen in this picture illustration
Nigerian naira banknotes are seen in this picture illustration
REUTERS/Afolabi Sotunde/Illustration

What is in it for individuals:

Oil powers the Nigerian economy and a drastic drop in price will affect everything Nigeria, including its citizens, and the company’s earnings. A recent example is a drop in global prices which led to a recession in 2016.

4. Importers from China

Nigerian businesses that import or rely on China as a principal source of goods will also be affected.

In a recent interview, the President of Phones and Allied Dealers Products Association (PAPDAN), Ifeanyi Akubue, told The Guardian that “huge stocks, especially phones and computers were stuck in China,” due to the outbreak of coronavirus.

What is in it for individuals:

The price of mobile phones and gadgets from China will skyrocket.

From Left Chairman Nigerian Railway Corporation,Malam Ibrahim Al-Hassan Musa, Managing Director CCECC Nigeria Limited,Mr Jiang Yi Gao, Minister Of Transportation, Rotimi Amaechi And Chairman China Civil Engineering Construction Corporation (CCECC), Mr Zhao DianLong During The Inspection Of Lagos-Ibadan Standard Rail Gauge In Lagos on Friday, 24/01/2020 (NAN).
From Left Chairman Nigerian Railway Corporation,Malam Ibrahim Al-Hassan Musa, Managing Director CCECC Nigeria Limited,Mr Jiang Yi Gao, Minister Of Transportation, Rotimi Amaechi And Chairman China Civil Engineering Construction Corporation (CCECC), Mr Zhao DianLong During The Inspection Of Lagos-Ibadan Standard Rail Gauge In Lagos on Friday, 24/01/2020 (NAN).

5. Impact of Nigeria’s tourism sector

It will affect the travel industry and scare foreigners or tourists from visiting the West African nation for now. According to Jumia’s Hospitality Report, the travels and tourism sector contributed N2.3 billion to the GDP as a direct contribution and N6.2 billion as a total contribution to the GDP in 2018.

This figure will reduce drastically, and its impact will fall on the Nigerian economy. Describing the sector as Nigeria’s untapped goldmine, Augusto & Co said the capability of the tourism industry can generate sustainable revenues that will rival current earnings from crude oil.

Other ways include:

Slow delivering in infrastructural development in Nigeria as many constructions, including the Lagos-Ibadan railway, are being handled by Chinese companies.

It will also affect and reduce deals in the form of developmental programmes and grants coming from Beijing in the form of the Africa-China assistance programme.