Nigeria’s economy could be hardly hit as a result of the difficulty of China to curtail the deadly Coronavirus Convid-19, a new report by SB Morgen has revealed.
The report titled, Potential Effect of Coronavirus on the Nigerian Economy, released on 21st February, specifically stated that the disease would crumble global oil prices, stall foreign lendings and incite scarcity of foreign reserve.
“It will be of no surprise if the Chinese CONVID’19 oil price shake leads to another recession in Nigeria, due to the over-reliance on proceeds from the oil sector as the biggest foreign exchange earner,” the SBM Intelligence report stated.
It stressed further that fallout of the disease outbreak would not only affect the Chinese economy – the world’s second-largest and main manufacturing hub but also, its important trading partners including Nigeria.
For instance, a 2014 BBC World Service Poll, says 80 per cent of Nigerians view China’s influence positively, with only 10 per cent expressing a negative view, making Nigeria the most pro-Chinese nation in the world.
China is considered one of Nigeria’s closest allies and partners in bilateral trade which means a drop in productions of goods and services in China also means a drop in commodity sales and a price hike in Nigeria.
SBM Intelligence report, however, showed that car and electronics manufacturing firms have publicly declared effect of the outbreak on the level of productions and demands.
In Germany, Deutsche Bank says, “The outbreak may contribute to recession. German investor sentiment has already crashed to its lowest point since December 2019.”
The International Air Transport Association (IATA) also announced that based on its initial assessment of the COVID-19 on flight operations, IATA already recorded a potential 13 per cent full-year loss of passenger demand for carriers in the Asia-Pacific region.
Other sectors of the Chinese economy that have been affected include pharmaceutical companies, trade shows, sporting events as well as tourism.
Moreover, China’s GDP is expected to reduce to 4.5 per cent in the first quarter of 2020 down from 6 per cent in the previous quarter.
