July 15, 2021/United Capital Report
Last week, the National Center for Disease Control (NCDC) announced that the “Delta” variant of Covid-19 had been detected in the country. The highly infectious nature of the variant suggests the increased possibility of a third wave of Covid-19 infections in Nigeria. On Tuesday 13th July, Nigeria recorded 154 new cases, the highest since Mar-2021. The new cases are concentrated mainly in Lagos, Nigeria’s economic powerhouse.
The “Delta” variant of the virus has spread rapidly worldwide and has forced countries to reintroduce lockdowns, casting a shadow over hopes of a robust economic rebound. This is concerning because, in recent months, the lifting of lockdown measures across regions has aided economic recovery by enabling a resurgence in business activity, retail spending, and consumer confidence, spurring upward adjustments to growth estimates. The lifting of lockdowns has also been contingent on mass vaccinations. However, only 1.2% of Nigeria’s population have received at least one vaccine dose, far from 25.6% globally and the WHO’s early guidance of c.70.0% needed to achieve herd immunity.
Obviously, the “Delta” variant of the virus poses some risk to Nigeria’s economic recovery. Externally, sustained restrictions could affect mobility and demand for oil, Nigeria’s key export. However, we expect any impact on oil demand to be relatively muted, given Nigeria’s low crude production and higher oil prices. Despite the need to take decisive internal action to stop the spread of the variant, the Nigerian economy cannot afford to do so in its fragile state of recovery. The best bet, in our opinion, is to ramp up vaccinations immediately to slow down the spread of the virus and prevent deaths.
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