It is possible to create from these epidemics and natural disasters many economic problems, and this issue has become inevitable as a result of previous experiences.
The spread of the COVID-19 globally is affecting negatively. Developing economy such as the Nigerian economy, there is an increase in the prices of goods and services and this year's budget estimate in terms of revenue generation is unachievable as the economy depends on oil.
Certainly, developing countries will be hit hard by this crisis, which has prompted the International Monetary Fund and other bodies to warn that they may cause the worst economic downturn since the Great Depression of the 1930 Almost every country on the planet is affected by this crisis. And the International Monetary Fund expects 170 countries, rich and poor, to see a decline in employment rates this year, which means lower average living standards This epidemic strikes developing economies in specific ways Commodity prices Many developing countries export basic commodities for use in industry. The closure of many factories around the world means that the demand for these commodities is lower, and consequently their prices have fallen sharply in some cases
Oil is a striking example of this. The decline in demand for it was severe, as the crisis led to a huge decrease in the demand for transportation fuel, which consists of more than 90 percent of it from crude oil The situation was further aggravated by a price war between the two largest exporters, Russia and Saudi Arabia. There was an unusual situation where the prices of some types of oil reached below zero t is not a general feature of the oil market, but it highlights the enormous imbalance between supply and demand. Other commodities also witnessed a sharp drop in prices, as the matter is not limited to oil. For example: the price of copper is now about 18 percent cheaper than in mid-January, and the price of zinc is more than 20 percent lower Falling prices hit companies and government revenue in the countries that export these goods. Developing countries also had to deal with a situation in which international investors withdraw their money. The IMF's chief economist, Gina Goliath s, says the appetite for risk among international investors has diminished. This means that they are more likely to sell investments that are considered relatively risky, including bonds and equities in emerging markets, and withdraw money to what they consider safer bets, such as the United States, Europe or Japan. It says the result was "unprecedented repercussions in capital flows.".
Though most stock markets (and oil prices) have nosedived recently, the transitory effects will have prolonged impacts on economies and companies’ earnings because of Covid-19 pandemic and health crisis.
This is also evidenced by the fact that the Fed decreased very recently interest rates to zero levels and the markets keep nosediving. This is an indication that markets are already far sighting and factoring the long-term impacts of current world events because of Covid-19 pandemic and the resultant health crisis.
I am afraid, but current world events will have major impacts on countries and companies’ earnings, which will definitely led to many bankruptcies worldwide.
The recovery from the economic impact of the Covid-19 health crisis will take lot of efforts and prolonged period of time.