Sometime last week, I received heartbreaking news from a very dear friend of mine on how they (herself and every other employee in their company) woke up to notices of disengagement by the company where she works. Apparently, the said company had taken a huge loan and because of the COVID-19 crisis can no longer service the loan, leading to the confiscation of the establishment by the lender. This is probably one in millions of other similar conditions globally.
According to a new assessment by the International Labour Organization (ILO), the economic and labour crisis created by the COVID-19 pandemic could cause a rise in global unemployment of between 5.3million (Low case scenario) and 24.7million (high scenario) from a base level of 188million in 2019.
This is also expected to increase underemployment on a large scale, as the economic consequences of the virus outbreak translate into reductions in working hours and wages. Falls in employment also mean large income losses for workers. The study estimates these, as being between USD 860 billion and USD 3.4 trillion by the end of 2020. Specifically, for developing countries, income losses are expected to exceed USD 220 billion. What this means, is a fall in the consumption of goods and services which would in turn affect the prospects for businesses and economies. The anticipated economic situation is nicely captured by Guy Ryder, the ILO Director General when he said: “this is no longer only a global health crisis, it is also a major labour market and economic crisis that is having a huge impact on the people”.
With an estimated 55 percent of the global population having no access to social protection, these losses will reverberate across societies, impacting education, human rights and in the most severe cases, basic food security and nutrition. As noted by Achim Steiner, the Administrator of the UNDP, this pandemic is not just a health crisis, for the vast swathes of the globe, the pandemic will leave deep, deep scars and without the support of the international community, we risk a massive reversal of gains made over the last two decades, and an entire generation will be lost, if not in lives then in rights, opportunities and dignity.
In Nigeria, the rate of youth unemployment following the COVID-19 crisis is expected to rise beyond 35%, implying that millions of our youths aged between 15 – 24years who are qualified for different kinds of job would have no job to do and many probably laid off as a result of the effect of the pandemic.
In your opinion, what do you think can be done by the government, corporate organizations, non-governmental organizations and individuals toward salvaging this anticipated economic crisis?
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Dr Vincent Chidera