183 views | Akpan Akata | April 5, 2021
Political risk consultancy, Menas Associates, says over 50% of the workforce under 30 years old in Nigeria and South Africa, Africa’s two largest economies, is now classified as unemployed or chronically underemployed.
In its latest monthly intelligence report on Nigeria, Nigeria Focus, workers were hit by both the restriction in trade and periodic urban lockdowns due to COVID-19 pandemic, as well as the wider economic slowdown as oil prices — and therefore the Federal Government’s revenues — plummeted.
According to the report, ‘’it is the political and economic effect of the pandemic that has hit Nigeria hardest: the disruption to the economy via domestic, regional, and international trade channels.
‘’This registers most clearly in ballooning jobless figures that has put Nigeria on a par with South Africa.
‘’Nigeria’s official exit from recession — following National Bureau of Statistics (NBS) calculations that real GDP expanded by 0.11% in Q4 of 2020 — obscures proliferating concerns about debt, rising unemployment and stagflation, varying rates of sectoral recovery, and the true impact of the National Economic Sustainability Plan that Vice President Yemi Osinbajo now credits for the return to growth.
‘’Overall GDP fell by 1.92% last year which represents an improvement on projections made following significant contraction in Q2 (–6.10%) and Q3 (–3.62%). The NBS figures nonetheless confirm major sectoral differences in quarterly and annual performance:
oil sector Q4 real year-on-year contraction of circa –19.8%, resulting in an overall 2020 real contraction of –8.9%; non-oil sector Q4 growth of 1.69%, resulting in overall 2020 contraction of –1.25%, information and communications (including telecoms) growth of 14.95%, resulting in overall 2020 growth of 13.18%.
‘’Agriculture sector Q4 growth of 3.42%, resulting in modest overall 2020 growth of 2.17%; construction Q4 growth of 1.21%, resulting in overall 2020 contraction of –7.68%; manufacturing Q4 contraction of –1.51%, resulting in overall 2020 contraction of –2.75%; trade Q4 contraction of –3.20%, resulting in overall 2020 contraction of –8.49%, a notable disclosure considering that the NBS Q4 trade report confirms a trade deficit of ₦7.37 trillion (US$19 billion) for 2020 and circa 35% overall drop in naira terms in 2020 exports compared to 2019.’’
Continuing, Menas Associates says, ‘’it is a better story on the public health front, mainly because Nigeria has an impressive cohort of senior health care professionals who led the national response to the pandemic.
‘’Even allowing for undercounting of COVID-driven deaths and infections, President Muhammadu Buhari’s team and the Presidential Task Force on COVID-19 (PTF) can still claim to have exceeded expectations on their handling of the virus.
‘’This is much like their counterparts in a number of sub-Saharan Africa (SSA) countries, although some suggest that youthful populations and a form of natural resistance from prior exposure to disease may have kept the death toll down.
‘’The comparison with the major Western economies and also Brazil remains favourable. In the latter, a recent one-day death toll exceeded Nigeria’s official total of 2,000 deaths since the pandemic began in early 2020.
‘’And — unlike Tanzania’s 61-year-old President John Magufuli who died of COVID-19 on 17 March — Buhari, Vice President Yemi Osinbajo, and the PTF have shown little public sign of virus or vaccine scepticism.
‘’The septuagenarian Buhari publicised his vaccination on 6 March, claiming not to have suffered any side effects, and sent out positive messages about the process via his spokesperson Garba Shehu.
‘’On March 30, Buhari flew to London for two weeks of medical checks, but his office said these were unrelated to either the pandemic or the vaccine. His office provided no details about his condition, other than to insist that he is in otherwise excellent health and will return to the country in mid-April.
‘’He will be under pressure to do so because staying away for longer would increase pressure for a formal, if temporary, handover of power to Osinbajo, who is now positioning himself in the race for the 2023 presidential election.
‘’The government’s ambitious plan to vaccinate a significant proportion of the population this year is optimistic. In late March, around four million COVAX-backed doses landed in Nigeria but this will cover less than 1% of the population with two doses each.
‘’The expected receipt of more vaccines via COVAX, other initiatives, and perhaps modest imports by large corporations operating in Nigeria still leaves a significant numerical gap, even before considering distribution challenges.
‘’The vaccination programme will inevitably come with a heavy financial cost despite international funding for a large portion of the vaccines that Nigeria is scheduled to receive. For that reason, a recent announcement by Finance, Budget, and National Planning Minister Zainab Ahmed that a supplementary budget for vaccines is being prepared comes as little surprise.
‘’Even without a pandemic, Nigeria’s federal budgets are prone to mid-year augmentation for additional spending needs.’’