COVID-19: Nigeria, others to lose $65bn revenue oil money

Nigeria and other oil-producing countries in Africa will lose up to $65 billion in revenues because of the impact of Coronavirus on crude oil sales.

The Economic Commission for Africa (ECA) released this figure on the ravaging Coronavirus pandemic in Africa.

For Nigeria in particular, the ECA said COVID-19, could reduce Nigeria’s total exports of crude oil in 2020 by between US$14 billion and US$19 billion.

The ECA also warned that the unfolding coronavirus crisis could seriously dent Africa’s already stagnant growth.

Vera Songwe, ECA executive secretary, noted that having already strongly hit Africa’s major trading partner, China, COVID-19 would inevitably impacting Africa’s trade.

According to her, “although a few COVID-19 cases have been reported in some African countries so far, the crisis is set to deal African economies a severe blow.”

Songwe stated that “Africa may lose half of its GDP with growth falling from 3.2% to about 2 % due to a number of reasons which include the disruption of global supply chains.”

Songwe, lamented that “the Continent’s interconnectedness to affected economies of the European Union, China and the United States was causing ripple effects.”

She said the continent would need up to US$10.6 billion in unanticipated increases in health spending to curtail the virus from spreading, while on the other hand revenue losses could lead to unsustainable debt.

Other knocks the continent will suffer as a result of the COVID-19 scourge is that Africa’s export revenues from fuels will fall at around US$101 billion in 2020.

Also, “remittances and tourism will be affected as the virus continues to spread worldwide, resulting in a decline in Foreign Direct Investment (FDI) flows; capital flight; domestic financial market tightening; and a slow-down in investments – hence job losses” the ECA said.

Pharmaceuticals, imported largely from Europe and other COVID-19 affected partners from outside the continent, could see their prices increasing and availability reduced for Africans.

In this regard, the Central Bank of Nigeria (CBN) has initiated some interventions to make money available for pharmaceuticals companies.

With nearly two-thirds of African countries being net importers of basic food, shortages are feared to severely impact food availability and food security.