The Director-General of the West African Institute for Financial and Economic Management (WAIFEM), Dr. Baba Musa has said the disruptive impact of the Covid-19 will further widen the income inequality gap in countries in West Africa.
Musa, said this in his opening remark during a webinar organised by WAIFEM to diagnose the impact of the pandemic on WAIFEM member countries held recently. The online meeting also featured presentations by the respective Director of Research of central banks of Nigeria, Liberia, Sierra Leone, Ghana and The Gambia.
The Director, Monetary Policy Department, Central Bank of Nigeria, Dr. Hassan Mahmud, was the discussant.
According to Musa, the pandemic has hit hard on economies of West African countries, including WAIFEM member countries which include Gambia, Ghana, Liberia, Nigeria and Sierra Leone.
He pointed out that in the countries, domestic activities have dropped sharply, while trade, transportation, hospitality, tourism, financial institutions, oil and gas sector, construction and health sector, have been heavily affected.
In addition, the WAIFEM boss said the pandemic has also resulted to drastic reduction in foreign direct investments (FDIs) and foreign portfolio investments (FPIs), capital reversals, deterioration of exports and imports.
“These factors have affected the livelihoods of millions of West African families. As a matter of fact, the Covid-19 crisis has inflicted the most pain on those who are already vulnerable and the toll on the poorer and more vulnerable segments of our society will be several times worse.
“Indeed the calamity will lead to a significant rise in income inequality and this could jeopardise developments such as educational attainments and poverty reduction,” he added.
He cited growth projections from the June 2020 prospect report of the World Bank to have showed that the pandemic would push between 71 million to 100 million people worldwide into extreme poverty in 2020, erasing all gains made in poverty reduction in the past three years.
The Director, Research Department, CBN, Dr. Michael Adebiyi, in his presentation on the impact of the virus on the Nigerian economy, said as a result of the collapse in crude oil price and the pandemic, the Purchasing Managers’ Index fell to 42.4 points in in May, from 58.3 in March.
Also, the country recorded over 25 per cent decline in cargo traffic and currently about 31 ships awaiting berth, Adebiyi revealed.
The sudden fall in both global and domestic aggregate demand led to terms of trade deficit and it resulted to a decline in government revenue, he added.