INTRODUCTION 1.1 Background to the Study
Human suffering and loss of life are the first and greatest component of a pandemic, as demonstrated by the coronavirus pandemic, which currently has six million confirmed cases of illness worldwide and ends with 1.3 million confirmed deaths as of 15 November 2020. (2020) WHO. However with economic and environmental implications, this form of pandemic may have major multi-dimensional impacts. Although the correlation between the consequences of the pandemic and the economy will differ, the extreme risk of infection may vary.
The economic effect of pandemics (and epidemics) was examined by looking at the literature by calculating the cost of deaths, such as for the extreme global influenza (such as the 1918 epidemic) exceeding USD 500 billion a year or around 0.6% of the global GDP Norouzi N., Fani M., KaramiZiarani Z. (2019). Noting that, relative to high-income countries , low-middle-income countries tend to be highly impacted (1.6 percent). In the other hand, the joint report of the World Health Organisation (WHO) and the World Bank reported that the cost of such an outbreak is much more severe, with up to 2.2-4.8 percent of global GDP (USD 3 trillion). Another IMF article adds that disadvantaged people, especially the young, are likely to suffer because they will have less access to health services and less security in the face of a financial catastrophe.
A World Bank report at regional level estimates that the Ebola epidemic in Guinea, Liberia and Sierra Leone canceled many of these countries' economic gains in the years prior to the epidemic, which Wang Y., Li H (2015) categorized as their fastest growing economic period. Furthermore the WHO study states that these types of outbreaks have a direct effect on the private sector and pose a danger to food security due to the decline in agricultural productivity and cross-border commerce, with limits on travel, goods and services.
Notwithstanding the confusion surrounding the introduction of the epidemic, even as the epidemic continues, several branches of studies have arisen to explore its macroeconomic effects at global, continental and national levels. Seven different possibilities of how COVID-19 could develop in the coming year are discussed in the analysis by McKibbin and Fernando (2020), which is an expansion of McKibbin and Sidorenko (2006). The paper pointed to the fact that the disease's evolution and its economic effects was somewhat unpredictable, making it impossible for policymakers to devise adequate responses to macroeconomic policy.
The scenarios investigated in the analysis indicate that despite the suppression of the epidemic, its effect on the global economy will still be important in the short term. Barua (2020), OECD (2020), Orlik et al (2020), Maliszewska et al (2020) and Fernandes (2020) are other recent studies of global interest. Fernandes (2020) analyses the economic effect of the COVID-19 crisis on markets and nations. The report indicates that a median decrease of -2.8 percent in GDP in 2020 is observed in the survey of 30 countries covered. The study indicates that GDP is projected to decrease more than 10 percent in other situations and more than 15 percent in certain countries. Orlik et al (2020) also estimated that the US$2.7 trillion coronavirus could cost the global economy. "A global baseline pandemic scenario shows that the gross domestic product falls by 2% below the global benchmark, 2.5% for developing countries, and 1.8% for industrial countries" (Maliszewska et al (2020).
In the world and in Nigeria in particular, many small and medium-sized enterprises (SMEs) have recently experienced dramatic losses due to the Corona Virus (Covid-19) pandemic. Both the public and private sectors of the Covid-19 pandemic caused unprecedented chaos, destruction and catastrophe. The recession, with policymakers and businesses grappling with the repercussions, is seen as an imminent challenge to the world economy. There has been raising anxiety about the possible effect of the pandemic on small and medium-sized enterprises (SMEs) in particular. Although the health impact of the crisis is huge, the economic consequences, particularly for companies, are no less catastrophic (Falokun, 2020).
The novel Coronavirus or COVID-19 has killed more than 1.3 million individuals worldwide. The planet is probably facing a kind of illness that does not discriminate on the basis of age, gender or even race, for the first time in many decades. The virus originated in China's Wuhan province and has spread to all areas of the world since then (WHO, 2020). The disease has been identified as infectious and contagious by health authorities. As a result, by rubbing their hands with soap and running water or even alcohol-based hand sanitizers, by having their nose and mouth hidden by a mask, both the World Health Organisation (WHO) and governments advised their population to exercise proper hygiene.
In the corporate world, small and medium-sized enterprises (SMEs) have remained a familiar concept and so occupy a position of pride in nearly every country in the global economy. This is due to the essential role of small and medium-sized enterprises in terms of job production, national expansion, poverty reduction and the economic development of global economies, like Nigeria, as the cornerstones of economic activity. These corporations recruit a large percentage of the workforce of cities and towns. According to Kadiri (2012), cited in Peterise (2003), more than 60% of Nigeria's population is employed by SMEs in both the formal and informal sectors. Worse than that, 70 to 80 percent of the daily needs of the world are not high-tech devices, but basic goods that are processed with little to no automation.
Records have shown that in many countries, small and medium-sized firms have provided a vehicle for fostering private ownership and entrepreneurial abilities, growing work opportunities per unit of capital spent, and allowing local technologies to expand (Sule, 1986; World Bank, 1995).
In support of the above opinion, Ajose (2010) claims that the center of economic growth and the first point of contact for the corporate world is small and medium-sized businesses, but Covid-19 has had a significant impact on business operations. Small and medium-sized companies are helping to push growth in spending and facilitate the use of local raw materials. We help diversify global growth and contribute greatly to exports and trade. Small and medium-sized businesses, as they aim to employ marginal and low-income people and are frequently the source of employment in rural areas and poor regions, are often important for poverty reduction.
In addition, small and medium-sized businesses are contributing to improving industrial ties by exporting intermediate products for use in large enterprises. This describes the increasing enthusiasm displayed in promoting small and medium-sized businesses since the 1970s by developing countries (Ekpenyong and Nyong, 1992). Many countries have lagged behind in supporting small and medium-sized firms, according to Bonga (2010), and have ignored the advantages they offer to a nation because of Covid-19.
Ataguba (2020) claims that it is only one part of the larger picture of economic impact" in what seems like a veiled critique of the public media and scholarly writings for relying solely on the global macroeconomic impact of COVID-19.
In particular, the effects of the pandemic in Africa, with its high prevalence of pathogens, poorly functioning infrastructure and safety nets, and inadequate health services, is projected to be extreme on the continent. A country-level effect review, using the same logic, is not only beneficial but inevitable to direct the policy authorities. For many factors, the probable deteriorating effect of the pandemic on the Nigerian economy is imminent. Next the economy is yet to rebound completely from the effects of the 2016 recession. Secondly, the economy is overwhelmingly dependent on crude oil, the price of which on the world market has collapsed. Third, the reserves of foreign exchange were decreased from US$45.1 billion at the end of 2019 to US$35.3 billion at the end of March 2020. Fourthly, the debt burden of the nation has been rising since 2015. Fifth, double-digit inflation is still firmly in place and the naira is under threat. Finally, the capacities of the health system are abysmal.
The rising worries and challenges that COVID-19 would bring to the Nigerian economy have resulted from these and other causes. "The economic downturn in Nigeria was triggered by a combination of declining oil prices and spillovers from the COVID-19 outbreak," according to Ozoli (2020).
The plan of this study is to examine the effect of the pandemic on economic development as a continuation of the above.
1.2 Declaration of the Issue For small and medium-sized businesses (SMEs) worldwide, the Covid-19 pandemic created critical obstacles, causing many to transfer their focus from everyday activities to disaster management and alternate market response efforts. In the fields of sales/services, programs to reduce adverse impacts, opportunities, risks, help interventions and prospects for business sustainability, the impact is already evident (Falokun, 2020). Furthermore, owing to Covid's 19 pandemic, so many small and medium-sized enterprises have completed their projects. The spread of the Covid-19 pandemic has stunned the world. At the start of the year 2020 (Adhikari et al., 2020; Congressional Research Service., 2020; H/arapan, Itoh, Yufika, Winardi, Keam, Te, et al., 2020), the World Health Organisation (WHO) announced the outbreak of a new coronavirus (SARS-CoV-2). The disease was first identified in December 2019 in the city of Wuhan, China, according to WHO (Adhikari et al., 2020; Adnan, Khan, Kazmi, Bashir, & Siddique, 2020; Unhale, Ansar, Sanap, Thakhre, & Wadatkar, 2020) and has since spread to more than 190 countries like a wildfire (Congressional Research Service., 2020; Harapan, Itoh, Yufika, Winardi, Keam, Te, et al., 2020). The epidemic, in other words, has become a worldwide pandemic. Throughout the world, the pandemic has triggered major economic disturbances. The pandemic could plunge the globe into a global recession (Ozili, 2020), economic analysts have projected. The pandemic has since destroyed a large amount of lives around the globe. 1.3 Goals of the study The broad aim of this research is to study the effect of a pandemic on economic development. The research has the following basic study goals; 1. Examining ways in which the Covid-19 pandemic could exacerbate Nigeria's unemployment rate 2. To investigate how the pandemic of Covid-19 impacted the economy of Nigeria 3. To investigate the impact on foreign exchange performance in Nigeria of the Covid-19 Outbreak 1.4 Questions for Study 1. In what way does Covid-19 exacerbate Nigeria's unemployment situation? 2. How has the pandemic of the Covid-19s impacted Nigeria's economy? 3. What are the consequences of the Covid-19 outbreak on Nigeria's foreign exchange performance? 1.5 Extent of the Scope of the Research This research focuses on the influence of a pandemic on economic development. In carrying out the report, the investigator narrowed the focus to Covid-19 because, as at the time of the report, it is the most new pandemic that is currently ravaging the planet.
1.6 Importance of study Significance of study
This research adds to the new literature exploring the social effects of the pandemic (see Chinazzi et al, 2020; Haleem et al, 2020; Chen et al, 2020; Fornaro and Wolf, 2020). This research adds to this literature by investigating the variables that lead to economic distress after a pandemic.
1.7 Study limitations 1.7 Study limitations
Financial constraints: With restricted funds, the researcher was unable to visit all areas to receive responses from respondents, but she was able to obtain good information about the research subject.
Time constraints: The researcher engaged in other departmental events, such as conferences, lecture attendance, etc., which restricted her research time, but the researcher was able to fulfill the time allotted for the completion of the research work.