© 2019 - International Centre for Investigative Reporting
Winners and losers of COVID-19 pandemic
THE COVID-19 pandemic has shown a lot of positive and negative impact on different sectors of the economy, throwing up potential winners and losers in the period of the pandemic.
Different sectors have been on standstill since the outbreak of the pandemic for example schools have been shut down for more than eight weeks.
The aviation sector has also been grounded for more than eight weeks, this is part of the short term losers of the pandemic.
According to financial analysis represented through the infographics below, some of the potential winners include medical supply and services, food processing, health care, information communication technology, e-commerce and agriculture.
Medical supply and services
The Central Bank of Nigeria (CBN) has earlier released funds for this sector provided additional N100billion intervention in healthcare loans to pharmaceutical companies, healthcare practitioners intending to expand/build capacity.
New health care facilities have emerged and benefited from the intervention funds released by the CBN, health sector continued business because they are the lifesaver during the pandemic and adequated funds have been released to them to expand.
Funds have also been released to the general manufacturing sector providing N1 trillion in loans to boost local manufacturing and production across critical sectors over the country.
The federal government has also introduced FarmerMoni loans to assist farmers with soft loans to help them stay in the business and provide for the demands.
Information communication technology (ICT)
It’s no news that offices and most organisations have been on shut down to reduce the impact of the pandemic so meetings have gone virtual which involves constant buying of data through service providers.
Microsoft is an obvious beneficiary here, it announced that the number of daily active users for its teams’ collaboration suite increased by 12 million, though there are many others who are financially better off also.
Zoom video communications, a remote conferencing services company headquartered in San Jose, has seen share price increase 130 per cent since the beginning of the year.
Online shopping has been reported to have speedily risen during the period of the pandemic, people ordering for items rather than physically shopping.
According to a new “Global Shopping Index” report published by Salesforce, the number of unique digital shoppers rose 40 per cent year-over-year (YoY).
Digital shoppers drove 20 per cent revenue growth compared to 12 per cent in Q1 2019.
The CBN has also released part of the palliatives to cushion the effect on the agricultural sector, it also placed a moratorium on all government-funded loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export-Import Bank.
President Buhari has directed the minister of agriculture and rural development, the national security adviser, the vice-chairman, national food security council.
The chairman, presidential fertiliser initiative to work with the Presidential Task Force on COVID-19 to ensure the impact of this pandemic on our 2020 farming season is minimized.
The infographics pointed out the potential losers which included tourism and leisure, aviation, construction and real estates, financial services and education.
Tourism and leisure
The COVID-19 pandemic has had a significant impact on the tourism industry due to resulting restrictions as well as a slump in demand among travellers.
The United Nations World Tourism Organization estimated that global international tourist arrivals might decrease by 20–30 per cent in 2020, leading to a potential loss of US$30–50 billion.
Even with the global drop in the price of oil which is supposed to be very beneficial to the aviation sector, due to the closure of borders all over the world and grounding of flight movement, the aviation sector has recorded a massive loss in the business due to the pandemic.
According to the International Air Transport Association (IATA), the region’s airlines could lose $6 billion of passenger revenue compared to 2019. That is $2billion more than was expected at the beginning of the month.
Job losses in aviation and related industries could grow to 3.1 million.
Full-year 2020 traffic is expected to plummet by 51 per cent compared to 2019 with the previous estimate was a fall of 32 per cent.
Gross Domestic Product (GDP) supported by aviation in the region could fall by $28 billion from $56 billion with the previous estimate was $17.8 billion.
Construction and real estate
The construction industry in Nigeria and the world over is currently in a trying time no thanks to COVID-19 pandemic which has crippled all human activities including building and construction, Kunle Awobudu, President, Nigerian Institute of Building (NIOB), has said.
This, indeed, is not the best of time for an industry where, Awobudu noted, work is determined by man-hours.
“The lockdown and sit-at-home order by the government means everybody is idle.”
Many projects have been suspended and that means we are wasting man-hours; when you are wasting man-hours, you will feel uncomfortable,” he said.
The NIOB president noted that both the industry and economy are losing much as a result of the lockdown.
According to TATA consultancy services, a financial institution, the COVID-19 pandemic could be one of the most serious challenges faced by the financial services industry in nearly a century.
The COVID-19 impact on banking will be severe fall in demand, lower incomes, production shutdowns and will adversely affect the business of banks.
The situation is exacerbated by staff shortages, inadequate digital maturity, and pressure on the existing infrastructure as firms scramble to deal with the impact of COVID-19 on financial services.
According to the United Nations Educational, Scientific and Cultural Organization (UNESCO), most governments around the world have temporarily closed educational institutions in an attempt to contain the spread of the COVID-19 pandemic.
These nationwide closures are impacting almost 70 per cent of the world’s student population.
Several other countries have implemented localized closures impacting millions of additional learners.
UNESCO is supporting countries in their efforts to mitigate the immediate impact of school closures, particularly for more vulnerable and disadvantaged communities,
And to facilitate the continuity of education for all through remote learning.
Inbetween winning and losing
Volatility has always been a challenging element of the oil and gas market but has rarely been more extreme than it is today.
COVID 19-led disruptions to demand, combined with its dramatic impact on financial markets, have led to rapid price swings.
Nigerian consumers have benefited from the drop in the global oil price which has translated to buying petrol at a cheaper rate from N145 to N125.
Petroleum Products Pricing Regulatory Agency’s (PPPRA) is officially empowered to regulate the price of petroleum prices in the Nigerian National Petroleum Corporation (NNPC) which would be beneficial to citizens.