IMG-BLOG
Global Epidemic: Coronavirus, The Law And Economy

Introduction

In December 2019, a mutated virus of the coronaviruses family named SARS-CoV-2 by the International Committee on Taxonomy of Viruses (ICTV) ravaged Wuhan, an emerging business hub in China making over 70 000 cases with about 1 800 deaths in its very first fifty days through a disease it caused named COVID-19 by the ICTV.[1]

The disease, whose general symptoms are fever, dry-cough and shortness of breath[2] gained momentum in spreading and extended beyond Chinese national boundaries. By the 27th of February 2020, it was present in 48 countries including Nigeria which recorded its index case according to a report by the World Health Organization..

It assumed the status of a global epidemic on the 11th of March 2020, having made 118 319 cases and 4 292 deaths globally[3], when the World Health Organization declared it a pandemic.

By this time, the world and Nigeria particularly had become conscious of the threat the virus posed to humanity. This led to the implementation of drastic measures and policies by various states, international organizations, firms, individuals, etc. to curb the spread of the virus and mitigate its effects in the society.

Amongst such measures implemented were nationwide lockdowns, bans on public gatherings, closure of schools, restaurants, bars, sports clubs, mandatory work from home orders, cancellation of domestic and international flights, ban on entrance of noncitizens, evacuation of citizens from abroad etc[4].

The implementation of these policies and measures greatly affected the world’s economic structure and the effects of the coronavirus global epidemic on human relations and actions gave rise to many legal issues. .

This essay will attempt an appreciation of the effects of the coronavirus global epidemic on the law and the economy through a comprehensive problem and solution approach.

Global Epidemic Coronavirus and the Economy

The Effects

The major area of impact of the coronavirus global epidemic is the economies of States. According to an analysis by the United Nations Trade and Development Agency, 2 trillion US dollars is estimated to be lost to the outbreak globally in 2020 alone.

The outbreak hit so hard on economic activities that by February 2020, global demand and supply of goods and services had tremendously declined heralding a global economic meltdown.[5]

The situation is particularly grave for Nigeria whose economic main stay is it’s petroleum exports given that the price per barrel of oil has been 30 USD on average in the international market since the outbreak which is mainly due to a low demand for oil occasioned by the outbreak and the power tussle between the Organisation of Petroleum Exporting Countries and Russia over output cuts. [6]

Another significant generator of revenue in Nigeria apart from its petroleum exports is the manufacturing industry. However, with the recent developments, a decline in the revenue generated by this sector has been noticed which is largely due to the nationwide lockdown imposed by President Muhammadu Buhari through the COVID-19 regulations. Additionally, Nigeria, being largely dependent on foreign raw materials for the servicing of its manufacturing industry, the restriction on importation occasioned by the disease outbreak stayed a large portion of productive and manufacturing activities within the country.

The negative effects of the COVID-19 global epidemic extends to other sectors of the economy such as the transportation and tourism industries and the service industries including financial and consulting services.

Arguably, SMEs are the most affected category of players in the economy given all the restrictions imposed naturally by the outbreak nd those imposed by the consequent legislations and regulations. Side by side with the owners of these SMEs are the employee and staffs in various sectors who have consequently lost their jobs because of the inability of their employers to keep them. More despicably, according to a report by Business Elites Africa, the Nigerian government is yet to announce its relief plans, if any, for Nigerian small business owners during this COVID-19 pandemic.

While all these are going on, inflation has been on a perpetual rise visiting with untold hardship Nigerians in the middle and low economic strata. The increase from 12.13% to 12.20% of the inflationary rate from January 2020 to February 2020 is believed to have been caused by the coronavirus global epidemic outbreak. This is according to a report by Reuters.

Based on the foregoing, financial analysts have predicted that the Nigerian 2020 budget which was prepared at 20% increase on the previous one and based on expectations of a stable oil price of 57 USD per barrel and 2.18 million barrels output per day is unrealisable.[7]

The Solutions

It is said that at the end of every tunnel, their is light. However, without conscious efforts and clearly articulated procedures, the world may be lost in the labyrinth of the coronavirus global epidemic tunnel's economic consequences and never find the light at its end.

One of those who share this view is the Centre for the Study of the Economies of Africa (CSEA). According to it, the economic pains that accompanied the coronavirus global epidemic might not go away soon as expected except through well thought out policies and measures.

The following are some practical and pragmatic approaches to returning the economy to normalcy.

Since firms are the driving force of any economic structure, an effort channelled towards easing their struggle at this time will be more beneficial. For this, reducing interest rates and costs of borrowing , providing tax cuts and tax holidays to these ailing firms will be a good start at boosting the economy[8] . This will spare these firms some money and avert chances of liquidation and bankruptcy.

Another practical approach for immediate effect is a cut in the budget for the fiscal year. Since the estimations are no where close to reality, it is expected that government should reduce spending through a slash in the budget especially in non essential areas and have a shift in focus in the case of Nigeria, from oil to non oil revenue generating components such as the telecommunications industry. [9]

Additionally, for immediate effect, provision of palliatives will spare the citizens some money and curb any deflationary tendency. [10]

Such other measures proffered are the creation of an enabling environment for striving of businesses and firms, liberalisation of access to the market to enable more participation of the private sector in economic activities, provision of subsidy for essential products such as electricity, telecommunication (at this time), petrol retail price, water supply etc.

The government should also invest heavily in technology and boost local tech start-ups. Indeed, technology is the surest way of overcoming the strains of this outbreak.

However, for a long term solution, a diversified economy is the best bait.

Global Epidemic Coronavirus and the Law

The law is a product of the economic, social, cultural, religious and psychological life of the people according to the historical and sociological schools of thought. In as much as all these aspects of the lives of the citizens are affected, so will the law be because it is a product of these factors. [11]

Right from the beginning, the provisions of Section 14 (2)(b) of the 1999 Constitution of the Federal Republic of Nigeria were invoked. The portion which provides that “the security and welfare of the people shall be the primary purpose of government” confers on the government the responsibility to ensure the welfare of its citizens which includes safeguarding their health.

Additionally, Section 17 (c) and (d) of the same Constitution puts health care among the social objectives of government with (d) mandating the government to ensure adequate medical and health facilities for all persons. The cumulative of these provisions together with those of the National Health Act, 2004 , the African Charter on Human and Peoples' Rights (Ratification and Enforcement) Act and the Patients’ Bill of Rights, (PBoR) 2018 elevates the access to health care to a near status of fundamental human rights like those contained in Chapter IV of the Constitution. [12]

In the provision and insurance of access to health facilities for the citizens by the government, the fundamental human rights of Nigerians are put in jeopardy. This is based on the provisions of Section 45 (1)(a) which puts limitations to these rights amongst which is the interest of public health. It reads: “(1) Nothing in sections 37, 38, 39, 40 and 41 of this Constitution shall invalidate any law that is reasonably justifiable in a democratic society (a) in the interest of defence, public safety, public order, public morality or public health”. In this case, COVID-19, being a highly contagious disease, one of such measures which could be implemented s the restriction of movement of citizens. This power can be exercised either by the President of the Federal Republic of Nigeria or a Governor of a state pursuant to the provisions of Section 2,3,4,6 and 8 of the Quarantine Act of 1926. However, it is pertinent to note that Quarantine is an item within the exclusive legislative list as provided in item 54 Part 1 of the Second Schedule of the 1999 Constitution of the Federal Republic of Nigeria. The effect of this is that Governors and states within Nigeria cannot legislate on matters relating to quarantine but can make legislations to curb the spread of the disease. Why is this so? The Quarantine Act 1926 under Section 8 grants to Governors the same power granted to the president amongst which include power to declare any place an infected local area, power to make regulations prescribing the steps to be taken within Nigeria upon any place, whether within or without Nigeria, being declared to be an infected local area, prescribing the introduction of any dangerous infectious disease into Nigeria or any part thereof from any place without Nigeria, whether such place is an infected local area or not preventing the spread of any dangerous infectious disease from any place within Nigeria, whether an infected local area or not, to any other place within Nigeria, preventing the transmission of any dangerous infectious disease from Nigeria or from any place within Nigeria, whether an infected local area or not, to any place without Nigeria, prescribing the powers and duties of such officers as may be charged with carrying out such regulations, fixing the fees and charges to be paid for any matter or thing to be done under such regulations, and prescribing the persons by whom such fees and charges shall be paid, and the persons by whom the expenses of carrying out any such regulations shall be borne, and the persons from whom any such expenses incurred by the Government may be recovered and generally for carrying out the purposes and provisions of this Act.

Now the purpose of this act as articulated in the introduction is to provide for and regulate the imposition of quarantine and to make other provisions for preventing the introduction into and spread in Nigeria, and the transmission from Nigeria, of dangerous infectious diseases.

However, the Constitution provides in Section 1(3) that “If any other law is inconsistent with the provisions of this Constitution, this Constitution shall prevail, and that other law shall, to the extent of the inconsistency, be void”. It is obvious that the powers granted to the Governors to legislate on matters relating to quarantine is inconsistent with the provisions of the Constitution and as such is void to this extent.

Beyond these, the effects of the coronavirus global epidemic can also be seen in contractual relationship between people. This spans across several industries and the laws regulating them. They include the oil and gas industry, the aviation industry, the maritime industry, the labour industry etc.

In all these, the major question is what the law says concerning breach of contract occasioned by the coronavirus outbreak. Can it serve as an excuse?

It is important then to note that if a provision of a force majeure clause (Force majeure clauses are contractual clauses which alter parties obligations and/or liabilities under a contract when an extraordinary event or circumstance beyond their control prevents one or all of them from fulfilling those obligations.[13] ) was made in the contractual agreement, which happens to include a pandemic, an epidemic or any such thing identifiable with the coronavirus global epidemic, a breach of such contract which can successfully be proven to have been occasioned by this outbreak is most likely to relieve the party from any contractual liability incurable if it is so worded in the clause because the interpretation of the clause is usually literal and in accordance to the specifications of the terms of the contract as agreed by the parties.

In a situation whereby there is no force majeure clause or the existing one does not provide for this coronavirus global epidemic, under the doctrine of frustration, the offending party may be relieved of the contractual liabilities incurable as a result of a breach of the terms of the contract. However, this is only in a situation where performance is impossible as a result of government policies or acts of God. When performance is difficult or will lead to incurring significant charges which makes the contract non profitable, the terms of the contract remain binding and as such any breach of them by a party, will incur contractual liabilities on the latter.

It is however advised that contracting parties should review their contractual agreements and update the terms of the force majeure clauses to provide for this circumstance.

Beyond these, the effects of the coronavirus global epidemic on firms as seen, has led to sacks and termination of employments. However, what does the law say about this?

The Labour Act provides for regulations concerning termination of employment contract. Under sections 7, 8, 9, 10, 11 and 12, the provisions are that if the employer seeks to terminate the employment contract, he is to give a prior notice to the employee according to a time frame related to the time the contract has been binding. On deduction of wages, the act is also clear in stipulating under section 5 the conditions under which deductions may be made in the wages of employees and the extent of such deductions. It includes seeking the written consent of an authorized labour officer, seeking the written consent of the employee and other certain conditions to be met.

Conclusion

The coronavirus global epidemic outbreak indeed had lots of effect on the lives of Nigerians and the world at large. Its effects on the economy is perhaps the most obvious and repealed with negative consequences. Beyond the economy, it brought to light some lacuna in our laws. Our response to this is however the most important.


REFERENCES


[1]Retrieved from https://www.sciencedirect.com/science/article/pii/S2090123220300540 on 25 April 2020.

[2]Ibid.

[3]Coronavirus disease 2019 (COVID-19) Situation Report -38. World Health Organization (WHO).

[4]Retrieved from https://www.aljazeera.com/amp/news/2020/01/coronavirus-symptoms-vaccines-risks-200122194509687.html on 25 April 2020.

[5]Retrieved from https://www.visualcapitalist.com/covid-19-economic-impact/ on 28 April 2020.

[6]Retrieved from http://cseaafrica.org/the-implication-of-covid19-on-the-nigerian-economy/ on 24 April 2020.

[7]Ibid.

[8]Ibid.

[9]Ibid.

[10]Ibid.

[11]Retrieved from https://www.barristerng.com/effects-of-covid-19-on-the-statutory-rights-of-nigerians-a-legal-appreciation-by-ebere-frankline-chisom/ on 26 April 2020.

[12]Ibid.

[13]Retrieved from https://www.pinsentmasons.com/out-law/guides/covid-19-force-majeure-clause on 28 April 2020.

Contact Form