The COVID-19 pandemic which first emerged in China in December 2019 has resulted in severe disruption to human and economic activity around the world. The disease which emerged in China’s Hubei province has since spread rapidly to Asia, Europe, USA and the rest of the World. The virus has a similar strain to the SARS-CoV-1 virus that affected over 8,000 people in 2002/2003 (WHO, 2012). Unlike the SARS pandemic where less than 100,000 people were infected, the COVID-19 virus has infected over 4.6million people and this number is still on the rise.
The World Health Organization (WHO), which is leading global efforts to contain the virus designated COVID-19 as a global pandemic in March 11, 2020, given the severity of spread and the challenges it posed to public health around the world (WHO, 2020). To contain the spread of the disease, governments around the world have since imposed lockdowns and restriction of movement for people, and in some cases goods and trade. The pandemic has resulted in severe downturn in economic activities around the world, affecting various industries, ranging from airline transportation to tourism and hospitality sectors to name a few.
In Nigeria, the first case was recorded on 27th February 2020, a number which has since shot up to nearly 5,500 cases by mid-May 2020, reflecting a mortality rate of 3%, with most cases situated in Lagos, Kano and Abuja. The president imposed a lockdown on Lagos, Abuja and Ogun state on March 30, 2020 which was in place until May 4, 2020 when the restrictions were eased. Interstate travel was limited to only movement of essential goods, whilst intra-state movement was limited to essential workers such as doctors, service personnel, media outlets amongst others.
The pandemic has resulted in a revised outlook for Nigeria’s economy, with GDP now forecast to shrink by 3.45% in 2020 based on estimates by the International Monetary Fund (IMF, 2020). The government has since introduced fiscal and monetary policy responses to stem the effect of shock on the Nigerian economy. This includes reduction in interest rates on interventions by the Central Bank of Nigeria (CBN) from 9% to 5%, introduction of a one-year moratorium on CBN intervention facilities amongst others.
Whilst the economic fallout from the pandemic has affected various sectors of the Nigerian economy, this chapter focuses on the effects of the pandemic on the services sector which is expected to be one of the worse-hit sectors. The remainder of this chapter is structured as follows. The second section outlines the theoretical linkage between COVID-19 and the services sector, while the third section discusses the impact of the pandemic on the Nigerian services sector. The fourth section provides an outlook for the sector post-COVID-19. The fifth and final section provides some policy recommendations and conclusion to the chapter.