Omicron Variant: A Downside Risk to Expectations for 2022

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Thursday December 30, 2021 / 12:15 PM / by CSL Research / Header Image Credit:  WOAI


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Many Nigerians believe the pandemic is over, yet the current Covid-19 caseload in the country does not seem to portray that narrative. Since the index case of the Omicron variant in the country on 1 December, the total number of confirmed cases has continued to rise. For the past ten (10) days, the number of Covid-19 cases has averaged 1,750 daily, with an all-time high of 4,035 recorded on 22 December. Currently, the total confirmed cases stand at 240,387 and if compared to 214,218 recorded at the end of November (a day before the index case), it shows that only December 2021 accounted for c.11% of the total confirmed cases since the official statistics of confirmed cases in February 2020.

 

The figure points to the fact that the newly dreaded variant is highly transmissible. The World Health Organization (WHO) notes that this new variant has several mutations which could affect how it behaves, though many aspects remain unclear. What is certain, however, is that the country cannot afford to enforce national lockdowns. This is not only because the initial lockdown measures brought out the age-long inherent weaknesses of the Nigerian economy, leading to untold hardships for many Nigerians who are daily wage earners but also because the government and political actors will be reluctant to announce any lockdowns that could jeopardize their political campaigns and rallies. However, of major concern is the variant's seemingly sizable downside risk to the economic outlook, especially at a time, the economy is leaning on a thin rope.

 

In essence, raising the budget estimate of brent price from US$57/bbl. to US$62/bbl. by the legislators may appear ill-informed. The onset of the covid-19 pandemic and its impact on oil prices led the country into its second recession in 5 years. Though we do not anticipate the extent of movement restrictions seen during the first wave, we believe the continued spread of the infection will have some impact on the global economy and Nigeria. That said, taking Covid-19 precautions such as social distancing, wearing face masks, and handwashing alongside rapid vaccination should be the loud chorus for us as a country as we expect to see political demonstrations in subsequent months.

 

Proshare Nigeria Pvt. Ltd.

 

Proshare Nigeria Pvt. Ltd.


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