The novel coronavirus (Covid-19) will drag Nigeria and most of sub-Saharan Africa into a recession, according to the World Bank.
Demand for Nigeria’s oil has tanked and businesses have been shuttered in the nation's commercial hub of Lagos, the industrial state of Ogun and the federal capital city of Abuja, since President Muhammadu Buhari declared a stay-at-home order on March 29 in a bid to slow the spread of Covid-19.
All of which will leave Africa’s largest economy in dire straits in a couple of weeks.
According to the World Bank’s latest forecast for the region, sub-Saharan Africa’s economy will contract 2.1% to 5.1% from growth of 2.4% last year.
The coronavirus will cost sub-Saharan Africa $37 billion to $79 billion in output losses this year due to trade and value chain disruption, among other factors, the report adds.
“The Covid-19 pandemic is testing the limits of societies and economies across the world, and African countries are likely to be hit particularly hard,” World Bank Vice President for Africa Hafez Ghanem said.
Real gross domestic product growth is projected to fall sharply particularly in the region’s three largest economies of Nigeria, South Africa and Angola.
The World Bank also predicts a food security crisis in Nigeria and the rest of the continent.
“Food imports would decline substantially (as much as 25% or as little as 13%) due to a combination of higher transaction costs and reduced domestic demand,” the bank said in a statement accompanying the report.
The bank has called on China, the United States and other bilateral creditors to temporarily suspend debt payments by the poorest countries so they can use the money to halt the spread of the disease and mitigate its financial impact.
“There will be need for some sort of debt relief from bilateral creditors to secure the resources urgently needed to fight Covid-19 and to help manage or maintain macroeconomic stability in the region,” Cesar Calderon, the World Bank’s lead economist and lead author of the report, said.
The World Bank advised African policymakers to focus on saving lives and protecting livelihoods by spending money to strengthen health systems and quickly implement policies to minimise disruptions in food supply chains.
Nigeria has confirmed 276 cases of the novel coronavirus in 16 of its 36 states, as of April 8. There have been 44 recoveries and 6 deaths.