CHAPTER ONE
INTRODUCTION
1.1 Background of the study
A pandemic is a disease outbreak that spreads across countries or continents. It affects more people and takes more lives than an epidemic which according to the World Health Organization (WHO), declared COVID-19 to be a pandemic when it became clear that the illness was severe and that it was spreading quickly over a wide area.
The shocking and sudden outbreak of the Coronavirus pandemic (Covid-19) in late 2019 and early 2020 left countries of the world in a confused state. Nigeria joined most countries of the world to witness a health pandemic in 2020, . Economic pandemic are normal Nigeria situation but health pandemic was definitely not part of her experience. However, the Covid-19 was declared by the World Health Organization (WHO) on 30th January 2020 as a Public Health Emergency of International Concern (PHEIC). On 27th February 2020, the Federal Ministry of Health announced the confirmation of the first case of Coronavirus disease in Lagos State, Nigeria. In the same communication, the Minister of Health announced that the Multi-sectoral Coronavirus Preparedness Group led by the Nigeria Center for Disease Control (NCDC) has immediately activated its National Emergency operations Center.
Since then, in less than 2 months, Nigeria has reached more than 50 cases across the country. Tracing back to previous experiences in Nigeria, some of the economic pandemic Nigeria has witnessed include the 2016 recession, the monetary authority in Nigeria defended the local currency from forced devaluation against the dollar and adopted a managed float foreign exchange system, which worked well from 2016 to 2019. In the aftermath of the 2016 recession in Nigeria, it was almost widely believed that unexpected and sustained decline in oil price was the most important cause of recessions in Nigeria. Nigeria witnessed two economic crises within a decade. The economic crisis of 2009 was as a result of the global financial crisis while the economic crisis in 2016 was as a result of the sudden fall in oil price in the world market. The 2009 recession was caused by a combination of the after-effect of the 2007-8 global financial crisis, poor loan underwriting process in banks, bad risk management practices and poor corporate governance of banks (Sanusi, 2010). Banks were a major cause of the 2009 economic crisis. The 2016 economic crisis was caused by unexpected decline in oil price which led to a sharp drop in oil revenue which severely affected Nigeria’s foreign reserve (Adeniran and Sidiq, 2018). This led to massive balance of payment deficits combined with an already high debt burden which plunged Nigeria into its second recession in a decade.