Nigeria Economy | |
Nigeria Economy | |
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Saturday, April 18, 2020 /07:40 AM
/ By FDC/ Header Image Credit: FDC
The great lockdown has become a shutdown according to
Martin Wolf the World renowned economist. The global economy is virtually
on a cliff and you in Nigeria must be wringing your hands and saying what the
heck ..... is going on.
But here is the thing. The probability of
Covid-19 killing you in Nigeria is .0019 in one based on a correlation
coefficient of 0.68 between the Median age of 18, life expectancy of 53.5 and a
Covid-19 fatality. In other words, you are more likely to be killed by a
lighting strike, hunger or malnutrition than this virus if you are in a village
in Warri, Mubi or Mbano.
The model predicts a mild to moderate attack in
Nigeria of 50k - 100,000 infections with 208 - 734 fatalities in a downside
scenario. Remember that malaria kills approximately 300,000 Nigerians in
one year.
Coming back to the economy, the 'Great Lockdown' has
left the global economy in a virtual state of paralysis and necessitated
countries rolling out various stimulus packages to combat the downturn. On
average, advanced economies have committed 12% of their GDP to mitigate the
fallout of Covid-19. This is however not enough to avoid a contraction in
global GDP to approximately -3% in 2020.
Nigeria's 2020 GDP growth outlook is equally as bleak
as the IMF is estimating average growth of -3.45%. So far, its stimulus package
represents a miserly 0.34% of GDP is good but inadequate to mitigate the
fallout of Covid-19 on the economy. This explains why Nigeria is seeking a
total of $6.9bn support from multilateral agencies just like other African
countries.
However, Nigeria's is unlikely to qualify for the
support without some changes to the present forex arrangement. Apart from
receiving stimulus support from the multilaterals, a floating exchange rate
will encourage an inflow of international and diaspora investments.
In this virtual edition of the LBS Breakfast Session,
Bismarck Rewane and the FDC Think Tank attempt to navigate you through the murky
times and offer you a glimpse of the global, regional and domestic economy post
Covid-19. Stay safe and hopeful.
Kindly download
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