The organised private sector (OPS) has warned of severe economic meltdown if tiers of government fail to put in place adequate health measures to arrest the spread of the outbreak of Coronavirus in Nigeria.

WuzupNigeria reports that Nigeria is now among affected the countries with the deadly coronavirus around the world after an Italian, attached to cement firm, Lafarge, was diagnosed with the disease.

The private sector group also forecast that the coronavirus outbreak was expected to further slow the country’s gross domestic product growth with the manufacturing and other key sectors of the economy expected to witness fragility in growth amid disruption in trade.

For instance, official statistics showed that the trade sector remained in recession in 2019, as it contracted by 0.63 per cent and 0.38 per cent in 2018 and 2019 respectively, NewTelegraph reported.

Also, the manufacturing sector grew at a slower pace of 0.77 per cent in 2019 as against 2.09 per cent in 2018.

In the manufacturing sector, the food and beverage sub-sector is expected to be the biggest hit as non-availability of raw materials and other equipment are going to impede production swiftly amid embargo on their importation.

Already, there are reports that international blue-chip companies mostly in the food and beverage sector, automobile, telecommunications, sports and others have concluded plans to cut jobs around the globe with Nigeria among the countries in the sub-Saharan Africa being targeted as they are currently experiencing costly disruptions to carefully calibrated supply chains and bracing for weaker demand of their products.

With this in place, renowned manufacturing firms in Nigeria like Nestle, Unilever, PZ and others, New Telegraph gathered exclusively, have been put on red alerts awaiting green light from their parent firms (international) to carry out downsizing and also cut down cost of production.

Speaking on the economic implications of the coronavirus outbreak on the real sector of the economy, the President of the Manufacturers’ Association of Nigeria (MAN), Engr. Mansur Ahmed, told this newspaper in an interview in Lagos, that the coronavirus was a great concern for the country’s manufacturing sector.

He said it would hit hard on the sector swiftly if not managed properly by government.

Ahmed explained that there was no doubt the economic implication of the coronavirus outbreak would be monumental for the manufacturing sector, adding that local manufacturers were already feeling the negative impact in the area of scarcity of raw material supply.

According to him, manufacturers have jettisoned Chinese market for raw material importation and looking at alternative markets.

The MAN president noted that the emergence of the virus in China was a setback for global manufacturing, affirming that 80 per cent of raw materials, which come from China are being used in manufacturing sector globally since their prices are ‘reasonable, economical and cheaper.’

Ahmed said:

“As regards to China and the coronavirus outbreak, yes, the coronavirus is definitely having significant impact on trade between China and Nigeria currently, which has also affected the volume of trade between China and other countries.

“So we do reckon in MAN that there will be impact of coronavirus in some key sectors in the manufacturing sector, particularly, pharmaceutical, cottage, automobiles and others. Already, we know that the coronavirus has had tremendous impact on oil price because the Chinese economy is slowing down and the demand for oil has come down and we have already seen the impact on international oil price.

“Obviously, it has also impacted on our foreign exchange, foreign reserves and others. We are engaging government on this, obviously, the first thing is to make sure that we are adequately ready and everything is in place for the outbreak of coronavirus since the first case has been reported in the country.”

Indeed, Coca-Cola said its artificial sweeteners from China could be in short supply following demand for flights to China plunging to zero.

Invariably, this is going to affect the sales and market revenue this year.

Statistics from the National Bureau of Statistics (NBS) showed that China retained the first position amongst Nigeria’s import countries with import trade value of N1.02 trillion; the United States was second with imports worth N422.12 billion; and the Netherlands in third place with imports worth N374.07 billion in the second quarter of 2019.

However, China is expected to lose its first position as Nigeria’s biggest import destination to the U.S. amid the coronavirus outbreak.

In his submission, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, explained that the outbreak would affect the influx of foreign direct investment into the country, especially to key sectors of the economy, while mentioning manufacturing sector as one of those that will feel the effect.

Yusuf also warned of a further increase in inflation in the country with the coronavirus outbreak expected to stifle manufacturing and purchasing power of Nigerians.

New Telegraph