When you are faced with health-related adversity such as COVID-19, you think of survival first before the economy. This at least is what any right-thinking government should do. But it appears after the calm then comes another storm.
Nigeria’s Minister of Finance, Zainab Mohammed has said that the government wants to raise N500 billion ($1.39 billion) Coronavirus fund to help support the country’s health care infrastructure. “This crisis intervention fund is to be utilised to upgrade healthcare facilities,” she said in a statement.
Unfortunately, this may not be enough to rescue the economy when the threat of the virus is eventually contained. It will take significantly more to calm the second storm.
Nigeria’s economic and political capital, Lagos and Abuja respectively have been in a lock down since last Monday night after the President Muhammadu Buhari led-government declared a 14-day stay at home order.
READ MORE: COVID-19: Lagos discharges 11 patients
Before then, most businesses had grounded operations to essential duties rolling out whatever business continuity plans they had in the cooler for years. The government now more than ever needs to implement its own business continuity plans and it could be very costly.
A recent report from the London Business School indicates countries hard hit by the shutdown caused by the COVID-19 virus may need as much as 15% of their Gross Domestic Product if they are to exit en impending recession as soon as possible and get their economy back in motion. According to the report “assume only a temporary drop in economic activities: 50% for a month and 25% in the two following months. Then, GDP drop of almost 10% of annual output” will be recorded by most countries.
The report also suggests that the longer the COVID-19 induced lock down, the more money governments will need to put aside if the economy is to heal faster. “Make the countries lock down longer and add the supply/demand downward spiral, then the actual costs (without policy interventions) could exceed 15% of GDP.”
At Nigeria’s GDP of N144trillion, the lock down could cost the country a whopping N21 trillion or $50 billion. Thus, to plug this hole it will surely need more than the $1.39 billion mooted by the Finance Minister. Acknowledged, the CBN along with the bankers committee had promised an intervention fund of about N120 billion while the government is considering a stimulus package.
Virus hit advanced economies in the West (like the UK and US) have similarly announced stimulus package, which they hoped will stem the negative effect of the virus on their economy.
For instance, the US passed a stimulus package of about $2 trillion nearly 20% of its GDP. The United Kingdom also announced an unprecedented stimulus package that is about 15% of its GDP. The situation is that critical.
A recent report from Mckinsey on the effect of the Coronavirus on the Nigerian economy explains it rather starkly.
“Across all scenarios, Nigeria’s economy looks to be pushed towards a contraction. The oil effect is the biggest driver of GDP impact (40-70% of total, disruption impact across scenarios) and also funds 65% of budgeted revenue and 90% of foreign reserves accrual.
“Uncontained, GDP growth could fall to -8.8% (USD ~40Bn) with oil effect and disruption to way of working – particularly consumer spend in F&B, clothing and transport account for >90% of the total impact.”
Where will government get the money from?
The Nigerian Government has major revenue challenges, which are further compounded by the crash in crude oil prices.
To raise cash, it will have to resort to a combination of Eurobonds, local bonds and asset sales. It planned to fund its outsized N10 trillion 2020 budget via loans but the urgency cannot be over emphasized.
Public debt hawks will complain bitterly and rightfully so. Nigeria’s external debts is about N27 trillion as at end of December 2019. Prepare for it to get higher.
#EndSARS: Access Bank debunks aiding military onslaught against Lekki protesters
Access Bank has dismissed rumours on social media suggesting it aided military onslaught against protesters.
Access Bank Nigeria Plc has vehemently debunked rumour making the rounds that it aided the military onslaught against peaceful #EndSARS protesters at Lekki, by allowing military snippers access its head office tower for operations.
Backstory: Recall that Nairametrics had earlier reported on how soldiers allegedly fired gunshots to disperse #EndSARS protesters in Lekki yesterday.
In view of this development, there have been public outcries and ensuing allegations, one of which is that Access Bank Nigeria Plc aided the military onslaught.
What they are saying
In response to the allegations, the bank first reacted to the development by expressing condolence. A verified tweet by the bank read thus: “We are deeply saddened to hear about the unfortunate loss of innocent lives yesterday at the Lekki Toll. We pray that the souls of the innocent rest in peace”.
In addition, the bank stated: “We wish to address the statement by Arise TV alleging that Military Snipers were allowed access to our Head Office Tower for operations at the Lekki Toll Gate area. This is absolutely untrue. The video shared on Arise TV featured an employee of the bank conducting routine maintenance at the Tower location. It is unfortunate that this was reported as a sniper without any proof. As a corporate citizen with the purpose of impacting lives positively, we will never endanger the lives of Nigerians.”
Just in: UK High Commission shuts down visa centres in Nigeria due to #EndSARS protests
The UK High Commission in Nigeria has announced the shutdown of its VISA application centers in Nigeria.
The United Kingdom High Commission in Nigeria on Wednesday, October 21, 2020, announced the shutdown of its VISA application centers in Nigeria for the next 48 hours, with effect from today (Wednesday), due to the ongoing #EndSARS protests in the country.
This comes barely a day after the US shut down its Lagos consulate, following the outbreak of violence from the #EndSARS protests in major parts of the country including Lagos State and the FCT.
The disclosure was contained in a statement issued by the UK High Commission in Nigeria on Wednesday, October 21, 2020.
The High Commission in a brief statement, also asked applicants with appointments for Wednesday and Thursday, to reschedule their appointments from Monday, October 26th.
“Due to the ongoing protest in Nigeria and for the safety of both staff and applicants, our Nigeria centres will be closed for 48 hours at a minimum. For applicants with booked appointments within this period, please you will need to reschedule your appointment for next week, from 26th October 2020.
“We will continue to post regular updates on this page, so please keep checking back for the latest information on reopening. We sincerely apologize for the inconvenience and thank you for your understanding.”
Update on UK Visa Application Centres:
Our TLS contact Visa Application Centres in Nigeria are currently closed.
For further updates on the closures please visit:
Victoria Island: https://t.co/B17AtE4kqv
— UK in Nigeria🇬🇧 (@UKinNigeria) October 21, 2020
#EndSARS: Archbishop of Canterbury condemns Lekki shootings
The Archbishop of Canterbury has joined his voice to the condemnation of the shooting of protesters in Lagos.
The Archbishop of Canterbury, Justin Welby says he condemns the shooting of unarmed protesters in Lekki and urges President Muhammadu Buhari to ensure that lives are protected.
The Archbishop, who is the Chief of the Anglican Church globally disclosed this on Wednesday morning, as the International Community reacted to videos of protesters getting shot at the Lekki tollgate.
I have urged President @MBuhari directly to ensure that lives are protected – and I say that again now.
I mourn for Nigeria. May God save Nigeria.
— Archbishop of Canterbury (@JustinWelby) October 21, 2020
Recall Nairametrics reported that several social media accounts revealed peaceful protesters were being shot at by the military at the Lekki toll gate holdout for the #EndSars protest.
The Nigerian Army, however, denied deploying soldiers to attack #EndSARS protesters who assembled at the Lekki Toll Plaza.
The Archbishop earlier said in his statement, “I condemn in the strongest terms the reported deliberate shooting of unarmed protesters in Lagos and other parts of Nigeria.
“I have urged President Muhammadu Buhari directly to ensure that lives are protected – and I say that again now.
“I mourn for Nigeria. May God save Nigeria.