Nigerian Based market research organisation, SBM Intelligence published a list of industries that will be positively and negatively impacted by the Covid-19 pandemic. This is part of the risk-based firm’s series of discussions on the impact of Covid-19 on the Nigerian Economy.
In a published report seen by Nairametrics, the company takes a look at Nigeria in the age of the coronavirus. The pandemic which broke out in Wuhan China in December 2019 has killed over a hundred thousand people across the world, with over three million people infected as well as about a million recoveries.
With its attendant devastating effects, it has impacted the global oil economy which makes up 7% percent of Nigeria’s GDP, and with the recent price war between Saudi Arabia and Russia, it has sent shocks to the Nigerian economy as oil sold below the $30 mark. held a Seminar during the week on the theme.
In a look at how the various sectors of the economy will fare, the report noted that bakery, beverages, chemicals, healthcare products, pharmaceuticals, telecommunications sectors face low exposure, compared with restaurant, clothing and textile, education, electricity, agriculture, real estate, hospitality as well as tobacco sectors that it classifies as medium risk.
Automobile, banking and finance, entertainment, leisure oil, and gas as well as trading and transportation were identified as high exposure and are more likely to experience disruption compared with the other sectors.
How the industries were chosen
According to SBM intelligence, between Thursday, 16 April 2020 and Sunday, 19 April, it conducted a series of phone interviews with practitioners in various industries to ascertain how their industries were faring as a result of the lockdowns in federal government imposed lockdowns in Abuja, Lagos State, and Ogun State; as well as the state government lockdowns in various other states. Their questions sought to determine the direction the respondents felt their industries would go after the pandemic was over.
A chart of the risks to various industries is presented below:
What this means: As the Nigerian economy continues to reel from the impact of the economic lockdowns, businesses across the country are jostling to limit their financial and business exposures. Most organisations have rolled out their business continuity plans designed to ensure that their business operations are not severely impacted. Nevertheless, there will still be winners and losers with varying degrees of exposures to the pandemic.
For businesses considered highly exposed they will have to review their business model and deploy painful reorganizations if they are to remain in business post-Covid-19. Thos on medium risk exposures will also have to adapt their models to reduce the impact while those on low-risk exposure need to consolidate on their operations and also taking full advantage of the opportunities being offered.
AFCFTA is a powerful tool for Africa’s economic integration – ECA
The pandemic has given African an opportunity to review its poor healthcare infrastructure,
The Executive Secretary of the UN Economic Commission for Africa (ECA), Ms Vera Songwe, said the African Continental Free Trade Area (AFCFTA) is a powerful tool to accelerate regional and economic integration in Africa.
The statement was made during a virtual panel by the African Union marking the Africa Integration for the Continental Free Trade Agreement.
She urged that Continental Free Trade Agreement would be Africa’s Marshall plan. Adding that nobody could have predicted the deep effects of the economic crisis on the continent.
“We need to talk about Africa and the AfCFTA. Our Marshall Plan is the AfCFTA. The AfCFTA is our plan, so let us take it and run with it.
“The Marshall Plan for Europe was about 160 per cent of their GDP traded to bring back growth after the war,” she said.
She added that implementation of the AFCFTA, would help the continent have control of its economic future. She added that the UN Economic Commission for Africa forecasts African GDP would decline by 3.2% to -2.8% in 2020 due to the effects of the pandemic.
She stressed the need for a continental financial system integration to implement a mutual system of financial stability for sub-Saharan monetary cooperation, while also urging that Africa builds on progress made from implementing The Afreximbank Exchange Facility.
“We need to ensure that as we build the AfCFTA and trade integration, we begin to build stronger, much more robust monetary and fiscal systems that can ensure that as a continent we actually can work with each other in a more effective way,” Songwe said.
She also urged that the pandemic has given Africa an opportunity to review its poor healthcare infrastructure, citing countries like South Africa, Ethiopia and Morocco developing new healthcare systems.
Songwe was joined on the panel by Mr Mukhisa Kituyi, Secretary-General of UNCTAD and Mr Benedict Okey Oramah, the President of the African Export-Import Bank (Afreximbank), Mr Wamkele Mene, first Secretary-General of the AfCFTA; Mr Chileshe Mpundu Kapwepwe, Secretary-General COMESA; and Paolo Gomes of AfroChampions.
The panelist jointly agreed that the economic crisis due to COVID-19 was an opportunity for Africa to learn lessons on the needs for Industrial developments by producing its own pharmaceutical industry.
Tax debt payments extended to August 31- FIRS
Tax debtors are to liquidate their outstanding tax liabilities on or before August 31.
The Federal Inland Revenue Service (FIRS) announced it on Wednesday that it has extended the waiver of penalty and interest window on tax debts owned by businesses and individuals from June 30 to August 31, 2020.
In a statement by the Director Communications and Liaison Department, Mr Abdullahi Ahmad. The Executive Chairman of FIRS, Mr Muhammad Nami said the extension is a sequel to palliative measures set up by the FIRS to help businesses and individuals deal with the effects of the Covid-19 pandemic on the economy.
“The latest extension applies to tax audit, tax investigation and desk review assessments, approved installment payment plans under Voluntary Assets and Income Declaration Scheme yet to be fully liquidated,” he said.
He added that there would not be any extension after the August 31 due date.
He urged tax debtors to liquidate their outstanding tax liabilities on or before August 31 in order to partake in the waiver of accumulated interests and penalties.
Nami also advised all businesses and individuals who fall under the waivers to contact their nearest FIRS Regional Debt Management Office and tax controllers for further enquiries.
African Union will accelerate industrialization in order to beat COVID-19
AU is planning on improving industrial output through the establishment of the regional value chain.
The African Union says it will accelerate its industrial development drive and improve supply chains needed for Africa’s trade and logistic growth to overcome the pandemic.
In a statement by the chairman of the AU and South Africa’s President, Cyril Ramaphosa, the AU is planning on improving industrial output through the establishment of a regional value chain with the aid of private sector stakeholders. The statement commemorating Africa Integration Day was co-signed by AU Commission Chairman Moussa Faki Mahamat and Mahamadou Issoufou, the president of Niger.
President Ramaphosa added that the African free trade area is the best tool that can help the continent speed up its regional economic integration to battle the effects of the pandemic. He added that the creation of a free trade area is “defragmenting Africa to put behind us the history of small uncompetitive markets that have thwarted our efforts to achieve inclusive sustainable development for the benefit of our people.”
The African Continental Free Trade Area agreement was signed last year and was meant to commence this year in July but the COVID-19 pandemic has delayed the negotiations for tariff concessions for trade in goods; a date has not yet been announced to resume negotiations.
When fully ratified and operational by 2030, the ACFTA would be the largest free trade area by land area, servicing a potential of 1.2 billion people and with combined GDP of $2.5 trillion. Of the 54 nations that have signed the agreement, only 28 have ratified it so far. Nigeria is one of the countries yet to ratify over worries of “dumping”. Internal trade in Africa is just 15% compared to Europe’s 70% and Asia’s 58%. The ACFTA when fully ratified will reduce tariffs on goods by 90% and help promote investment and movement of goods, people and capital in the continent.