COVID-19 3rd wave: Nigeria’s economic recovery hangs

The International Monetary Fund (IMF) has expressed concern on some issues that, it says, may significantly affect the pace of Nigeria’s economic recovery if measures are not taken.

This is coming on the heels of fears of possible outbreak of the third wave of the COVID-19 pandemic.

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The IMF made the statement in a recently published report titled ‘Sub-Saharan Africa: We Need to Act Now’.

According to the report, the level of increase in infections in the third wave of the disease in Sub-Saharan Africa (SSA) is faster than anywhere else in the world.

Analysts at Afrinvest have said the report was not surprising given that vaccine rollout in SSA is estimated to be less than 5 percent of the total population according to data from the World Bank.

Precisely, less than one adult in every 100 is fully vaccinated in SSA compared to an average of over 30 in every 100 in more advanced economies.

Interestingly, Nigeria has the largest population in SSA (c.208m) and its vaccination story is not in any way better than other SSA countries whose vaccination data were analyzed by the IMF.

For instance, data obtained from Thomas Reuters global COVID-19 vaccination tracking portal as of June 29, 2021 shows that Nigeria has administered 3.4 million doses of vaccine.

Given that each person requires two doses of the vaccine to be fully immunised against the pandemic, it is safe to estimate that only 1.7m Nigerians have received the two doses required for full vaccination as of the end of June 2021.

This number represents a paltry 0.8% of Nigeria’s estimated current population of 208m. This is worrisome given the quick spread of the new Delta variant (now in 96 countries) which was first discovered in India earlier in May 2021.

Even though Nigeria’s total confirmed cases during the first and second wave of the pandemic in 2020 settled below 140,000, yet, the minimum estimated economic loss arising from the disruption stood at N3 trillion, with Gross Domestic Product (GDP) contracting by 1.9% in 2020.

Although the federal government has already announced some strict measures that would see passengers from India, Turkey, Brazil and South Africa either barred from entering the country (non-Nigerians) or subjected to a compulsory 14-day quarantine (Nigerians), yet, the analysts are of the view that these measures may not be sufficient to prevent the entry of the Delta variant into Nigeria, given the porous borders and reported cases of compromise from some Nigerian officials at the airports.

The World Bank excluded Nigeria from the list of 51 Low Income Countries (LIC) it would be assisting with a fresh $4.4bn for the purchase and deployment of vaccines in the coming weeks, and the FG’s balance sheet remains weak to support state-funded mass vaccination.

Despite the IMF making a case for other multilateral organisations and Advanced Economies (AEs) to support SSA countries in vaccinating about 30% of their population (through support with funds or giving out vaccine from their stockpile) in 2021, The Analyst suspect that Nigeria may not benefit significantly from this arrangement given that the new Delta variant has peaked in South Africa (83%), Zambia (92%), Tunisia (98%) and Namibia (100%).

Besides, the IMF also reported that much of the global supply of vaccines for 2021 has already been bought up by AEs. Hence, this leaves Nigeria with no other option than to be aggressive in preventing the Delta variant from entering the country.

The analysts estimated that adopting strict measures such as banning flights from red zones and limiting social activities may cause Nigeria’s economic recovery in H2:2021 to drag by about 0.5%.

They said: “The cost of allowing a third wave of the pandemic may take the country back into a recession in the coming quarters if taken for granted.”