BY JIDE AYOBOLU
The Central Bank of Nigeria (CBN) has expressed concern over the impact
of COVID-19 on the local economy. He said the toll, especially the
declining global oil price, was becoming severe, calling for massive
investment in agriculture. Its Governor Godwin Emefiele spoke at the
African Economic Research Consortium (AERC) Senior Policy Seminar XXII
in partnership with CBN in Abuja. The seminar has as its theme:
“Agriculture and Food Policies for Better Nutrition Outcomes in
Africa’’. Emefiele said the outbreak of the coronavirus had dampened
consumer confidence resulting to decline in private consumption and
global demand slowdown. He said the sad development had posed a great
threat to the economic gains achieved across Africa in the recent past.
Emefiele said the seminar could not have come at a better time than now
when economies within the region were inundated with challenges
resulting from the impact of the global economic slowdown, and currently
facing further deterioration in global activity owing to COVID-19. He
stressed the need for the countries on the continent to massively invest
in agriculture.
The CBN boss said: “Very much like we have seen in the past, food is
often one of the immediate causalities of any catastrophe on the African
continent. The reason is not far-fetched, a sizeable proportion of the
population is food poor. “Africa is not winning the war against acute
hunger and malnutrition. Food insecurity and malnutrition plague the
lives of millions across the continent.’’
According to the 2019 Global Report on Food Crises, Africa remains
dis-proportionally affected by food insecurity with more than half of
the global 113 million, 58 per cent to be precise acutely food-insecure
people living in 33 countries in Africa. “Here is the irony, Africa
holds 65 per cent of the world uncultivated arable land, particularly
its vast 400 million-hectare savannas which are the world’s largest
agriculture frontier. “The continent of Africa should have no business
with food insecurity. Regrettably, its agriculture continues to be
vulnerable to climate-related shocks, disease, weak input supply chains,
conflicts and economic shocks.” “Disturbingly, the Food and
Agriculture Organisation (FAO) has predicted that Africa could add 38
million hungry people to the world’s number of hungry people by 2050
due to climate change,” he said.
Emefiele said that unlocking the huge potential of agriculture must,
therefore, be at the heart of any meaningful engagement on the economic
and social development of the continent. He said the region had the
capacity and must become the food basket for the world, rather than a
net importer of food. Emefiele said the importation of food by the
continent was unacceptable, saying that Africa spends $35 billion on the
importation of food annually according to report by the African
Development Bank (AfDB). According to him, the continent must urgently
develop policy measures around building what has been termed grey matter
infrastructure in Africa to end the scourge of malnutrition.
It would be recalled that President Muhammadu Buhari only recently set
up a Presidential Task Force to spearhead the campaign against the novel
Coronavirus (COVID-19) in Nigeria. The task force, headed by the
Secretary to the Government of the Federation, Boss Mustapha, was in
response to the potential effects of the pandemic on healthcare services
in the country and the economy. A statement by the Senior Special
Assistant to the President on Media and Publicity, Mallam Garba Shehu,
said the task force would coordinate multi-sectoral actions in the event
of an escalated outbreak.
The statement reads: “Given the current global outbreak of the novel
Coronavirus and its potential of causing significant disruption to
health services in the country as well as impacting negatively on the
economy, President Muhammadu Buhari has established a Presidential Task
Force for the Control of the Coronavirus (Covid-19). “This action is
in preparation for the unlikely but probable major outbreak of the
disease in the country which will require a multi-sectoral
inter-governmental approach as advised by WHO similar to that adopted
for the HIV epidemic in the last two decades. “The start and finish
task group is expected to deliver within a maximum of six months.”
Recalled also that, despite several attempts at diversifying the
national economy, oil remains the mainstay of the Nigerian economy
contributing about 90 per cent of the annual revenue, hence, it is
worthy to note that, the Organisation of Petroleum Exporting Countries
(OPEC) has marked down its global oil demand growth in 2020 as a result
of the coronavirus (COVID-19) outbreak from 1.1 million barrels per day
(bpd) to 480,000 bpd. The Organisation is also proposing to cut oil
output by 1.5 million barrels per day if its non-OPEC allies led by
Russia agree to the proposal, which will be presented to the 8th OPEC
and non-OPEC Ministerial meeting. If the proposal sails through, OPEC
members will cut production by 0ne million barrels per day while
non-OPEC allies will cut production by 500,000 barrels per day. This was
disclosed this at the 178th extraordinary meeting of the Conference of
the Organization of the Petroleum Exporting Countries held in Vienna,
Austria.
The oil cartel noted that the COVID-19 outbreak has had a major adverse
impact on global economic and oil demand forecasts in 2020, particularly
for the first and second quarters adding that the global oil demand
growth in 2020 is now forecast to be 0.48 million barrels per day
(mbpd), down from 1.1 mbpd in December 2019. Moreover, the unprecedented
situation, and the ever-shifting market dynamics, means risks are skewed
to the downside, the group said, noting that the further impact of the
COVID-19 outbreak on oil market fundamentals necessitates further
continuous monitoring.
The Conference commended all OPEC Member Countries, as well as non-OPEC
countries participating in the Declaration of Cooperation, for their
continued commitment to achieving and sustaining balance and stability
in the market. Member Countries reaffirmed their continued focus on
fundamentals for a stable and balanced oil market, in the interests of
producers, consumers, and the global economy. The Conference emphasized
the ongoing dialogue with consuming countries, and the consultations
undertaken in a collegial spirit before reaching decisions. Member
Countries are resolute and committed to being dependable and reliable
suppliers of crude and products to global markets. The Conference
confirmed that its next Ordinary Meeting will convene in Vienna,
Austria, on 9 June 2020, and noted that September 2020 will mark the
60th Anniversary since the founding of OPEC in Baghdad in 1960.
Similarly, the International Monetary Fund (IMF) plans to provide $50
billion to help low income and emerging market countries deal with the
coronavirus outbreak. According to the global lender, the amount will be
raised through a rapid-disbursing emergency financing facility and $10
billion of it will be available at zero-interest for the poorest
members. Speaking about the rapid spread of the disease, IMF’s
Managing Director Kristalina Georgieva said over one-third of the
fund’s member countries were directly affected. “This is no longer a
regional issue, it’s a global problem calling for a global
response,” she stressed. Georgieva explained that one-third of the
economic losses from the COVID-19 outbreak would be direct costs such as
loss of life, workplace closures, and quarantines. Two-thirds, she
added, would be indirect, including impacts on consumer confidence,
business behaviour, and financial markets. “The good news is that
financial systems are more resilient than before the global financial
crisis. However, our biggest challenge right now is handling
uncertainty,” Georgieva said. She added that global growth in 2020
would be below last year’s level.
“How far it will fall, and for how long, is difficult to predict and
would depend on the epidemic, but also on the timeliness and
effectiveness of our actions,” the IMF chief noted. The World Bank
announced $12 billion as an immediate intervention for countries coping
with the health and economic impacts of COVID-19. The new coronavirus
emerged in Wuhan, China, last December and has now spread to over 75
countries, with the global death toll estimated at 3,500 and more than
92,000 confirmed cases. The World Health Organisation (WHO), which had
declared the outbreak an international health emergency, has updated the
global risk level to “very high”.
Moreover, the Minister of Transportation, Rotimi Amaechi has disclosed
that the outbreak of Coronavirus may delay the completion of the
Lagos-Ibadan rail project. The minister said the delay may not be
unconnected to the fact that the bulk of the workforce handling the
project is stuck in China. According to him, the Chinese government
prevented some of the workers from returning to Nigeria because of the
virus. He said: “If not for coronavirus, I would have said that we are
nearly finished with the Lagos-Ibadan rail. “The bulk of the workforce
is still in China. The government of China did not allow them to return
and that has delayed the work on Lagos Ibadan.” The minister also
explained that He said: “If not for coronavirus, I would have said
that we are nearly finished with the Lagos-Ibadan rail. “The bulk of
the workforce is still in China. The government of China did not allow
them to return and that has delayed the work on Lagos Ibadan.” The
minister also explained that the government was still test-running the
rail tracks. He also noted that the government would deploy 10 coaches
each to the Lagos-Ibadan and Abuja-Kaduna rail lines to ease passenger
movement.
“We are still test-running the tracks. Commercial activities are yet
to commence fully. “To test-run the tracks, we brought in two coaches,
each coach takes about 25 passengers. So the two coaches take about 50
passengers. “We have got signals from the passengers and the engineers
that the tracks are ready to run, but we need to complete communication,
signalling and station buildings. Once that is done, we are good to go.
“We are bringing in 20 new coaches and four new locomotives, 10
coaches will be deployed to Abuja-Kaduna and the other 10 to
Lagos-Ibadan.
Therefore, it is a good development that Nigeria is taking proactive
measures to curb the rampaging spread and negative influence of COVID
19, this will help the country to meet its planned expectations in
several areas and aspects of the national economy.