NIGERIA – The raging Coronavirus has ravaged economies through out the world, the worst hit being China which has been forced to effect far-reaching containment measures that have not only hurt its economies but those of others that rely on China for exports and imports.
Nigeria is among some of the major economies in Africa that heavily rely on China and it is expected to be among the worst hit in the continent.
According to a Punch Nigeria report, China accounts for around a quarter of Nigerian imports, greasing much of the country’s supply chain, and is funding and building much-needed infrastructure.
Business people like Yetunde Oluyide depend on China for cheaper exports are already experiencing shortages in their inventories thanks to supply chains disruptions in china.
Oluyide runs a gift shop in bustling Lagos for nearly a decade, but with coronavirus curtailing imports of Chinese goods, she revealed in an interview with Punch Nigeria that she was losing more than 2 million naira ($5,555) a month.
Oluyide’s reliance on China to fill the shelves of Yetty-Jewel Ventures is a classic example of the close ties between the world’s second largest economy and Africa’s largest economy.
An anxious Oluyide explained that, f or the past two months, she has not been able to ship in anything.
Apart from traders, China’s economic health is also crucial for oil prices, which make up more than half of government revenues for Africa’s top producer.
Oil prices have tumbled more than 20% since January and the prolonging virus coupled with lack of consensus by OPEC+ members has even pushed them further below the US$50 per barrel price tag.
This combined with disrupted supply chains and the threat of coronavirus spreading within Nigeria, threatens to torpedo growth in its economy and boost borrowing costs just as the country plans to return to the Eurobond market.
Nigeria’s Finance Minister Zainab Ahmed expressed concern thi at the drop in prices, saying that if it is sustained, the record 10.59 trillion naira (US$28.97bn) budget could become unsustainable.
“We will do the mid-term review and if the revenues are so significantly affected we will have to do some revisions by way of budget adjustment,” she said.
Nigeria confirmed its first coronavirus case last week, wiping some 300 billion naira ($980 million) off the value of the local stock market.
If the virus spreads, and workers and shoppers stay home, much-needed revenue from a higher VAT rate passed last year will evaporate.