The Implication of Federal Government policy on Covid-19 and how it will affect Nigeria Economic System by L.A Muhammed

Coronaviruses are a family of viruses that can cause illnesses such as the common cold, severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS). In 2019, a new coronavirus was identified as the cause of a disease outbreak that originated in China.

The virus is now known as the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The disease it causes is called coronavirus disease 2019 (COVID-19).

Nigeria is categorise under developing country with poor public health care system. Our public hospitals sometimes don’t even have enough beds to accommodate those seeking medical attention on a regular day. So, with the outbreak of the Coronavirus, this may bring about a bigger issue than many realize. Public hospitals don’t have much staff and in countless amounts of them, only have one doctor on call who has to attend to hundreds of patients a day.
And also the government are not making provision for it. Nigeria are so desperate to the extent that they are Inflating the price of goods and services at this moment, A statement made by Barrister Habeeb Whity about how Nigeria Pharmaceutical outlets inflate the price of Nose Mask from #1,200 to #20,000 per pack, which this can not help the situation on ground. And it is quite unfortunate that Nigerian are killing Nigerian.

Also the government are not helping situation and the Constitution of the federal republic of Nigeria provided in section 14 (1)(b) that "The security and welfare of the people shall be the primary purpose of government.

But fortunate the virus is affecting more of the rich than poor people because assuming it's penetrating more of poor people, the government won't take a serious action on it.
But with the government action (policies), Pareto Efficiency has taking place cause there is no way the government policies won't affect the economy negatively.

And That’s a major point; if the virus can be stopped in good time, then the negative economic impact and a resulting stimulus package could be avoided.

Similarly, if we borrow and spend without containing the virus in a few months, the economy will remain in the red and the repayment of loans will be difficult.

But in the more likely event where the virus arrests the economy for a short period, the government should bridge that gap with credit to avoid a deep recession.

Big hit to the economy and perhaps, the most direct hit will come from the restrictions on movement around the world and in Nigeria. The shutdown of offices and non-essential businesses will reduce productive effort and output. Take as examples, the closure of a Chinese fabric manufacturing company that produces input for a Nigerian fashion line or the shutdown of bars in Lagos. In both cases, Nigerian businesses will be required to slow down or halt production. Moreover, with stay-at-home policies and the uncertainty that comes with the pandemic, non-essential commodities will be less sought after.

Considering that the informal sector contributes about 41% of Nigeria’s economic output, how many people can stay at home and still be productive? Work-from-home policies would not apply to food vendors and artisans. Even within the formal economy, workers who are not skilled in working remotely like Nigeria’s civil servants and sectors without telework technology like manufacturing will be unable to work from home. A shutdown of movement will lead to a massive decline in economic output, income and consumer spending.

While most recessions are either caused by demand, supply or financial shocks, the COVID-19 pandemic promises to deliver all three in a single package. The shock to demand (restrictions to movement, and uncertainty causing consumers to reduce non-essential spending), to supply (shutdown of factories and service providers causing a reduction in goods and services produced) and the financial system (disruptions in the capital market) could be fatal.

Writer:
LIADI MUHAMMED ABIODUN
Department of Social Sciences Education
University of Ilorin
Abey34753@gmail.com
08136124728