With the increase in the number of confirmed COVID-19 cases, the whole world is still struggling to find a foot in this new environment. The coronavirus cases which first occurred in Wuhan China has now brought about two million infections and over hundreds of deaths across the world. In Nigeria presently, there are about 9000 confirmed cases and over a thousand deaths.
Not only is the health and safety of people in trouble but also the various economies of the world are in trouble too and most industries are experiencing a disruption in their businesses. The increased uncertainty about what the future holds has led to the financial market volatility which was last seen and experienced during the global financial crisis. In a bid to contain the spread of the coronavirus disease, it has led to numerous lockdowns, social distancing measures and travel restrictions placed in countries globally, with Nigeria also not been left out of all the world’s struggles against this pandemic.
These are the top industries facing massive disruption due to economic meltdown
Due to the increase in the slow down of work and as the world continues to struggle through the COVID-19 pandemic, more industries and sectors are going through tough times in stabilizing their economy. Some of the industries listed below have experienced a great disruption in their activities and as such reduced their growth and economy, thereby making them financially inbalance. All of these financial struggles have made some industries result in laying off their staffs and putting some into compulsory leave without pay. Listed below are some of the industries going through economy meltdown:
- Manufacturing industry: with the ongoing pandemic, the manufacturing sector has suffered a great disruption in their daily business. Most manufacturing companies, production lines and industries are currently on shut down as they are obeying the directives of the government which specifies what businesses are to operate and how they should be operated. All of these directives have drastically changed the way things are been done in this sector and this will, in turn, lower the consumer purchases.
- Automobile: for the automobile industry, sales would be dropped as they also have to be on a temporary shut down due to the ongoing pandemic. The manufacturing and selling of cars should be expected to see an extended period of a slow down in their market given that they are a large ticket purchase. The automobile business would experience low purchase and profits during this times, as most people are not buying cars now but, for the agricultural sector, the demand for tractors and other farm machinery would increase the purchase of the automobiles a bit during this period.
- Tourism and travel: the advent of the global pandemic have resulted in the cancellation of most trips both internal and external ones. Most flights have been cancelled as orders are put in place for a lockdown in various areas of the world. This has, in turn, closed the doors of this industry temporarily and has also resulted in low or no profits for the sector. This has been one of the hardest-hit industries affected by the pandemic, as the lockdown and travel restrictions have caused a huge slump in demand among travellers and tourists. Most of the local and foreign airlines have subsequently suspended all operations, with all the airports; both international and domestic, are under a shutdown order by the Federal Government.
- Hospitality industry: the hospitality industry is one of the sectors that have also been hit the hardest by the COVID-19 pandemic, and this has also made it inevitable for most of the employees in this industry to either be out of work or on compulsory leave without pay. Money is been lost as flights are been cancelled due to travel restrictions, the shutdown of businesses, and social distancing which have not allowed the business to flourish as it uses to be in the past times. The hotels and other hospitality businesses have now been experiencing very low or no patronage at all in some states of the federation.
- Export businesses: such as textiles, jewellery, some food items have been barred due to the travel restrictions placed on all land and sea borders. This industry has also suffered a huge blow due to the ongoing COVID-19 pandemic which is ravaging the whole world currently. All export businesses are on temporary shut down until otherwise stated by the government.
- Entertainment industry: during all of the current struggle for the end of the global pandemic, the entertainment industry has been on a partial shut down as movie theatres, art exhibitions, movie premiers and musical concerts have either been cancelled, postponed or temporarily shut down. A lot of deals worth so much money, which had been made before the coming of the pandemic have also been lost.
- Trade: owing to the shutdown of factories, the trade sector has been negatively affected too. There is a reduction in the trade business due to inability to access raw materials and commodities for sale. As a result of the lockdown and closure of all sea and land borders, exports and imports are not been made and this has brought a drastic negative change to the trading sector’s economy.
- Real estate and construction: with the reduction in the income of salary earners, business operators and loss of jobs been experienced in some industries in the nation, there is very little interest or no interest at all from people in acquiring houses or different properties during this pandemic. Everybody is keeping whatever they have to feed their families for the duration of the lockdown restrictions. Also, the movement restrictions and social distancing has adversely affected the construction activities nationwide with various organizations and individuals trying to apply safety measures due to the pandemic and also in the process follow the directives of the government.
- Oil and gas industry: this sector has also been badly hit by the pandemic and current situation of the world at large. Since the lockdown and the introduction of travel restrictions, there has been a huge reduction in the oil demand and crash in crude oil prices globally. With the crash in the oil prices, following OPEC’s price war with Russia and Dubai, the country is losing so much money in the oil and gas industry and this is affecting the country’s economy more, as it is the cash cow of the nation.
- Consultants and services: the consultants and service sectors have also been negatively affected with the current situation of the world, as there is an increase in the drop in revenue by companies and even government institutions are not left behind in this drop in profits due to the economic meltdown. All of these have led to the tightening of budgets which will negatively affect the consultants.
Effects Of COVID-19 On Nigerian Economy
The economic impacts of the COVID-19 pandemic in the country and the whole world will definitely have a major effect across the continent. The government revenues are collapsing in various directions following the fall in oil prices, and oil is the major export business of our nation, the main money bag so to say. The crash in the oil prices, following OPEC’s price war with Russia and Dubai, has revealed some significant fault lines in the nation’s economy and reasons why we shouldn’t rely on only the oil and gas sector as our nation’s source of income.
Also with the health sector and the subsequent economic ramifications from COVID-19 disease will be an unprecedented challenge which Nigeria would face. The high burden of this infectious disease is likely to put an extra strain on an already not too good health sector of the country. Wealthy Nigerians and politicians have often preferred travelling abroad for their medical treatments with the Minister of Health estimating that the country spends over $1 billion annually on medical tourism.
Unfortunately, now that the sea and land borders are been shut down and no movement between countries except on special cases, these people now have to manage with whatever health care system they are presented with. This low overall spending makes the healthcare system particularly fragile and at major risk of being overwhelmed. Without additional funding, the demand for healthcare services, especially for critical care services, they will significantly exceed the capacity. This is likely to have long-term consequences for the health care sector in the country, as well as spillover effects to the rest of the nation’s economy; manufacturing, export businesses, trade, finances and so much more. All of the nation’s economy is at a verge of collapse is not properly managed.