Amechi Ogbonna
The raging global health epidemic widely known as coronavirus is threatening to put Nigeria’s economy at risk as seen from the negative impact on oil price, Standard Chartered Bank, StanChart said yesterday.
Speaking at a media interactive session in Lagos, the bank’s Chief Economist for Africa and Middle East, Razia Khan, noted that “Anything that suggests downside risks to oil price is a risk to Nigeria,”
According to her, the bank will continue to monitor developments in the global economy in response to the coronavirus as well as responses by respective governments and agencies before coming out with position on the extent of its impact on the Nigerian economy.
Khan said “It is not a risk that we have quantified yet. We will monitor what happens with the global coordinated responses,” before any quantification is made”.
She said Standard Chartered forecasts Nigeria’s growth at “fairly low level “ of 2.2 per cent this year owing to potential weakness in oil price and inadequate economic diversification.
The lender’s cautious disposition may not be unconnected with a likely slowdown in demand for crude oil and by extension economic activities in China, Nigeria’s largest customers which is the epicenter of the coronavirus.
This was as oil prices jumped by more than 3per cent on Wednesday on media reports that scientists have developed a drug against the fast-spreading coronavirus that continued to weigh heavily on global economic activity. News that the Organisation of the Petroleum Exporting Countries (OPEC) and its producer allies are considering further output cuts to counter a potential squeeze on global oil demand further supported by more than 20 per cent since early January.
Recent reports said China’s daily crude consumption had slumped by 20 per cent the equivalent of the UK and Italy’s oil needs combined. In response, Asia’s largest oil refiner, Sinopec, which is owned by the Chinese government, has cut the amount of crude it is processing by about 600,000 barrels per day, or 12 per cent, its biggest cut in more than a decade.