Many economies across the world entered the year 2020 with so much optimism. However, the outbreak of the novel Coronavirus (COVID-19) in Wuhan, China and its spread to the rest of the world dampened the prospect of the global economy.
The spread of the virus constituted a public health challenge as it over-stretched the health care systems of many countries due to rising number of confirmed cases. The pandemic also had huge economic implications as countries implemented lockdowns and movement restrictions. These responses resulted in a disruption of global supply chain, a fall in crude oil price and a global recession.
In Nigeria, the economy halted the 12 consecutive quarters of positive Gross Domestic Product (GDP) growth and contracted by 6.1 percent and 3.6 percent in the second and third quarters of 2020 respectively, triggering a second recession in the space of five years. Inflation rate kept up the momentum, closing 2020 at 15.8 percent from 12.1 percent in January.
Exchange rate faced intense pressure, which led to series of devaluations of the Naira as external reserves depleted, foreign investment inflows declined and oil receipts plummeted. In 2020, the socio-economic condition in Nigeria worsened as unemployment rate rose to 27.1 percent as at June 2020 while about 8.6 million Nigerians are expected to fall into poverty in the year.
Just like 2020, the year 2021 will be characterized by uncertainties. There is the possibility of a third, fourth and fifth wave of COVID-19, which will intensify existing pressure on health systems and the economy at large. In 2021, many of the challenges encountered in 2020 will remain, or perhaps become amplified; so will the expectations of citizens and the business community on the government to address these challenges.
– Laoye Jaiyeola, CEO, NESG
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