Link to article: “Nigeria slips into recession blamed on COVID-19 and oil prices”
Nigeria’s economy has begun to fall back into recession, largely due to the COVID-19 pandemic and low oil prices. Nigeria hasn’t experienced a recession like this since 2016, and it may be hard to recover from due to uncertain circumstances. In regards to its foreign trade, Nigeria receives 90% of its earnings from oil exports, making it’s economy highly reliant on oil sales. The pandemic quickly shut down the country’s economy, hauling economic growth, and activity until May.
“Cumulative GDP for the first nine months of 2020, therefore, stood at -2.48 percent,” said Yemi Kale, a statistician general. The IMF has predicted a drop of 5.4% in Nigeria’s GDP for this year.
With many people staying home and traveling less, the pandemic was surely going to have a negative impact on oil prices and the overall economy in Nigeria. Due to the country’s fairly unvaried economy, the low demand and low prices are threatening to an economy that is primarily reliant on their export incomes. Furthermore, the lack of exports and trade with other countries doesn’t help the international economy.
The recession can and most likely will leave lasting impacts in Nigeria, including higher unemployment, low incomes, poverty, and loss of education and economic opportunities. This will mainly impact its citizens, creating an unstable living environment, one that many people will not have a chance to succeed in.
Ideally, a new plan for recovery would be introduced by the president. With government investment in job creation and potential foreign aid, the economy could see growth and improvements over the next months. Although, this is a stretch considering the pandemic can’t easily be controlled and has shown unpredictable trends in countries around the world, making it hard to predict the future outcome of the economy.
This article represents the impact of the pandemic on both a state and a global level. On the state level, Nigeria has been greatly impacted by the pandemic, as it has reduced the prices of its main export, oil, taking a hard hit on the economy. On the global level, lockdowns placed in countries around the globe have reduced activity, causing a low demand for oil. This leads to the absence of Nigeria’s oil exports in international trade, which is what most of its economy relies on.