The world continues to fight the COVID-19 Pandemic which has created health and economic crises and may soon result in food crisis for some regions of the world.1 The impacts of the COVID-19 Pandemic are already being felt across the globe as seen in the crash in oil prices in the global market2, contraction of the global economy3, increase in debt,4 increased mortality,5 etc.

Bearing in mind the growing debate over the effectiveness of lockdowns in flattening the infection curve, economic data from various jurisdictions across the world show that the near-term economic cost of shutdown has been significant.6 Nigeria's economy, in particular, is being threatened by the twin shocks of the COVID- 19 Pandemic and the associated sharp fall in international oil prices.7 This has led to growing concerns over the suitability of lockdowns in addressing the multi-faceted crisis.

In a bid to address these economic concerns, President Muhammadu Buhari through his speech on 27 April 2020 approved a gradual and phased relaxation of the lockdown restrictions in Lagos and Ogun States as well as the Federal Capital Territory, Abuja, effective 4 May 2020. The President also directed all stakeholders to scale up social distancing and other health measures while easing the lockdown restrictions.8

Needless to say, a multi-pronged approach that will ensure the provision of relevant facilities for massive testing, accommodation and treatment of COVID-19 patients and deal with the resultant security, food and economic crisis is very important in restoring overall health to the society. Further to our last newsletter on the COVID- 19 regulatory updates (please click here to read), we have continued to track new measures introduced by the Nigerian government and other regulatory developments in response to the COVID-19 Pandemic and the implications of these developments on individuals and businesses in Nigeria.

A. Economic Updates

Increase in Inflation Rate Based on the April 2020 Consumer Price Index (CPI) Report recently released by the National Bureau of Statistics (NBS) for activities in March 2020, the inflation rate was 12.26% (year-on-year) which is 0.06% points higher than the rate recorded in February 2020 (i.e. 12.20%).9

Based on the Report, the lockdown in Abuja, Lagos and Ogun States and other disruptions in normal economic activities in several states did not have any major impact on the March 2020 inflation because most of the restrictive measures were taken in April 2020.

For April 2020 and subsequent months, we expect that the stability of the CPI and changes to the inflation rate will be influenced by a number of factors, including the policy decisions and measures taken by the Federal and State Governments and the purchasing power of consumers. However, with a proper management of the relaxed lockdown restrictions by the President, we expect that there will be minimal disruptions to economic activities which largely guide the stability of the CPI and the inflation rates, going forward.

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Footnotes

1. World Food Programme, 'COVID-19 Will Double Number of People Facing Food Crisis Unless Swift Action is Taken' WFP News Release (21 April 2020) https://www.wfp.org/news/covid-19-will-double-number-people-facing-food-crisesunless-swift-action-taken, accessed 23 April 2020

2. Organization of the Petroleum Exporting Countries, 'Crude Oil Price Movement' OPEC Monthly Oil Market Report (16 April 2020). 3. International Monetary Fund, 'The Great Lockdown' in World Economic Outlook (IMF Publication, April 2020) 1 – 17. (IMF)

4. International Monetary Fund, 'General Government Net Lending/Borrowing' (IMF Data Mapper, World Economic Outlook, April 2020) https://www.imf.org/external/datamapper/GGXCNL_NGDP@WEO/SWE/AFQ?year=2020 accessed

25 April 2020.

5. IMF (n3) 1.

6. IMF (n3) v.

7. Statement by IMF Managing Director, Kristalina Georgieva on Nigeria, https://www.imf.org/en/News/Articles/2020/04/07/pr20137-nigeria-statement-by-imf-managing-director-kristalina-georgieva-on-nigeria accessed 23 April 2020.

8. Address by H.E President Muhammadu Buhari on the Culmulative Lockdown Order of Lagos and Ogun States as well as the Federal Capital Territory on COVID- 19 Pandemic at the State House, Abuja. Monday, 27th April 2020

9. National Bureau of Statistics, 'Consumer Price Index Report April 2020 https://www.nigerianstat.gov.ng/download/1084 7 accessed 21 April 2020.

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