The catastrophic economic cost of Covid-19

Mankind is at war with an invisible, seemingly inanimate substance which has wrecked more havoc on the United States of America (USA), the world’s largest economy, than the Japanese invasion of Pearl Harbour in December 7, 1941.

The coronavirus pandemic (Covid-19) has sent shock waves down the spines of the entire human race. For the first time in human history a pestilence is plaguing practically every part of the globe.  It has wrecked the world’s economy. The brewing recession kicked up by the pandemic might dwarf the great depression of the 1930s. The global figure on confirmed cases has crossed the 1.2 million mark. The global death toll is perilously close to 70, 000.

The effect of the pandemic on China which was the epicenter of the apocalyptic pestilence now pales into insignificance when measured against what is happening in the U.S.

The Chinese claim that they had just above 81, 000 cases and 3, 334 deaths.

Conversely, confirmed infection in the U.S. hovers around 360, 000 with the death toll expected to hit 15, 000 this week.

Ironically Italy and Spain now top the infection cases in Europe and global casualty rate. Italy’s death toll now stands at 16, 000 while Spain trails with 12, 600.

In Nigeria, confirmed cases of the virus remains at three digits. However, even as the United Nations and other global organisations are applauding the federal government for the perceived mature handling of the pandemic, the country is obviously not prepared for a possible full blown assault by the virus. Only 4,000 tests have been conducted so far.

There are very few quarantine centers and the health workers are fighting the few established cases with limited protection. In most of the primary health centers the face masks are so scarce that workers have to buy them with their hard earned pay. Health workers reporting for work under the lockdown are packed like sardines in the few ambulances available, while some trek long distances to and from work. No one talks about social distancing in the ambulances.

No one in Nigeria’s medical circle expects the kind of full scale assault by the virus that devastated the healthcare systems of Italy and Spain.

Two factors are touted as Nigeria’s possible shield against a full scale assault by the virus. The first is the country’s simmering temperature which hovers around 34 degrees Celsius. The virus is believed to capitulate under temperatures above 26 degrees Celsius.  

The next line of defence is Nigeria’s decimating population of aged people. With life expectancy at 53 years, the number of Nigerians above 65 years of age is a scant 3.5 per cent of the population. The economy is too hostile and the healthcare facilities too primitive for the survival of aged people. In some developed countries 40 per cent of the population is made up of people who are 65 years and above. That may be Italy’s case.

There are claims in medical circles that Italy’s high casualty in the pandemic emanates from the country’s robust population of aged people who were sustained by an efficient healthcare system.

Empirical evidence suggests that people above 65 and those with underlying health factors like diabetes and high blood pressure are more susceptible to the virus.

A school of thoughts believe that Nigeria’s primitive healthcare system has flushed out millions of aged and terminally ill people who would have been susceptible to the virus invasion.

The argument therefore is that those remaining are rugged enough to resist the virus. The virus would therefore find very few in Nigeria to kill.

In fact, medical experts believe that the virus is everywhere in Nigeria and that many who were infected have weathered the storm with rugged immunity without actually developing the symptoms.

If millions of Nigerians are immune to the health assault of the virus many would be cut down by the brewing economic blitzkrieg kicked up by the pandemic. Nigeria’s economy is on its knees. Just one week into the lockdown, many can no longer feed. Government is too broke to help.

Oil price tumbled to $16 per barrel last week before the spineless oil price war tacticians in Saudi Arabia remembered to call an emergency meeting of global oil producers to discuss supply cuts that could halt the southward journey of prices.

The Saudis acted just in time to reduce Nigeria’s economic calamity. If oil price had remained at $16, Nigeria’s oil producers would have had to shut down their rigs because production cost in Nigerian oil fields stands menacingly at $17 per barrel while the Saudis produce at a moderate $5 per barrel.

Airlines, motorists and other land transportation systems consume 16 million barrels of oil daily. Currently, more than half of the world’s airlines are grounded by fear of spreading the pandemic. Land transportation systems have lost 80 per cent of their patronage to lockdowns in many countries. The two-month closure of factories in China and now in the U.S. and the European Union has further worsened a bad demand situation in the international oil market.

Consequently, even if oil producers agree to stem the menacing supply glut, no one expects crude oil price to climb above $50 in the interim.

That is bad news for Nigeria’s one-handed economy. Nigeria depends on oil for 90 per cent of its foreign exchange earnings. Now that the 90 per cent has gone down by 50 per cent the first casualty would be the exchange rate of the naira which might be heading to N500 to the dollar.

Inflation would surge as an import dependent economy gasps for breath under excruciating forex asphyxiation. As inflation eats into the purchasing power of the naira, producers of goods and services would lose patronage and consequently throw millions more into the boisterous labour market.

More would join the thriving business of banditry, kidnapping and armed robbery and worsen Nigeria’s alarming insecurity. The economic casualties of Covid-19 would be higher than those felled in hospital wards by the pestilence.    

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