An Economist and senior lecturer in the Department of Economics at the Rivers State University, Prof Ayodele Momodu, says automobile and drug manufacturers will face difficulty over the coronavirus pandemic.
Prof Momodu in an exclusive chat with The Tide yesterday in Port Harcourt opined that since China and USA are leaders in automobile and pharmaceutical manufacturing, hence anything that affects their economy will crash production in the two sectors.
My own problem is China because they produce 90 percent of our imported drugs, including automobile parts so it will definitely affect us here,”Prof Momodu said.
He explained that since production has slumped over the past two months, availability of products will be scarce in the developing countries. Besides, he stated that prices of such products would go up and lead to more demand.
On the other hand, he expressed fears that the N1.1 trillion bailout fund released by the Central Bank of Nigeria(CBN) last week might not have the desired effect as the economy is still import-dependent.
Though he hailed the action of CBN, he expressed fears that if the fund was not properly channeled it would further plunge the economy to more stress and shocks, as the spread of the coronavirus continues to make in-roads to other parts of the country.
The bailout would have been effective if we had a productive sector. But here how many of the factories are working . The import content is huge and so you discover that the money will end up flying to other countries,”Momodu said.
He, however, argued that though the injection was salutary to stabilise the economy and reduce shock of the coronavirus pandemic across the world, he nonetheless was of the view that there should be factors that should be provided to drive the economy to ensure that the few local producers are encouraged to produce without shutting down.
Momodu recommended that the fund should be targeted to agriculture sector and farmers. In addition, he submitted that small and medium enterprises should be assisted to continue production since any shock may affect the economy.
Commenting on the reduction of fuel pump price by N20 as a result of the slump in oil price, Prof. Momodu said such was expected since the economy rely on oil. He urged the authorities to effect the price cut, as failure would affect the cost of transport which in the long run may affect the price of goods and services.