Global Epidemic – Coronavirus, The Law And Economy

Global Epidemic – Coronavirus, The Law And Economy

“Businesses closed, streets deserted, a shortage of doctors…corpses without assistance, everyone flee, if they can…” These words were unearthed from the diary of Mardoqueo Navarro published on April 13th, 1871. And though they were intended to draw a macabre impression of the yellow fever epidemic in Buenos Aires, the carefully mapped insight of the scourge, was rooted in the fear of the Yellow-faced Monster. This fear was made whole by the instruments of fake news, occasioned through the absence of efficient media systems. As opposed to what obtains today, being informed in early Buenos Aires included the ability to pick effectively, the words of conversing bystanders. Yet, when the crisis spiked in 1871, fake news proved to be the first phase of an ambidextrous epidemic. 

The general apprehension towards the 1871 Yellow fever crisis was not only in its certainty of killing its victims, but was also centred in the savagery with which it carried it out. At the first phase, the victim would be assailed with fever, muscle aches and loss of appetite; in the second phase, the symptoms goes away, pulling a feint while the victim is washed up in faint hope; at the third stage, commonly called the intoxication phase, the victim suffers heart failure with bleeding disorders becoming a norm. Eventually, the victim falls into a coma. At this point, the thick human pigment would transform into the yellowy apparel of death. Unknown to the citizens of Buenos Aires, the epidemic employed a similar play on their economy. 

Between 1811 and 1870, Argentina’s export per capita made a steady climb from 3.1 to 20.3. This rise was constructed on the export of dry hides, tallow, salted meat, and wool. From economic indices, the export per capita was three times bigger than developed countries and twenty-five times larger than third world nations. Still, when the yellow fever outbreak unveiled its symptoms beyond the citizens, its effects took the anima of economic recession and underdevelopment. At the first phase, the epidemic withered 2000 people in the city of Corrientes, which had a population of 11,000 persons. This sent the province into a feverish state, because of the failure to produce sufficient manpower, thereby leading to loss of ties with the allied troops propagating the Paraguayan war; its second phase followed the closure of ports and borders, giving a faint hope that the virus could be contained. Yet, by the middle of February 1971, the human capital took a hit with 150 deaths per day. However disturbing this tale might be, it proffers a yardstick indicating that we do not need the reasoning of Karma, to know why the rise of any epidemic is met with unfriendly stares. 

When the Coronavirus infection was declared a public health emergency by the World Health Organisation in 2019, the news approached a system thriving on the routine use of transportation, capitalism, state socialism and the law. The notion of economic growth was erected on these elements and dictated how much was needed in purchasing the ideology of extensive advancement for the people. Supporting all these were the bones of social and economic interaction. Asides maintaining the equilibrium of mental health, socio-economic interaction also quelled the disadvantages of a dormant economic structure. Yet, it comes with a painful echo that the incursion of the coronavirus epidemic, has inevitably specialised in the suspension of valuable sectors. 


As exhibited in the symbiosis of art and paintbrushes, an inactivity of the labour force would fail to paint a perfect representation of production. In 2017, the Organisation for Economic Co-operation and Development detailed the profit margin across the highest Federal tax revenues in Nigeria. For corporate tax and personal income tax, the main financial munitions of major developing countries, 45 percent and 16 percent were allocated respectively (OECD, 2017). Through this margin, it is seen that the average working Nigerian, contributes 1 to 5 naira in every ten naira made from income tax revenue. This in turn, translates into the creation of social services. However, with the COVID-19 epidemic, the exchange between the government and its people have been interrupted. Nigerians are still entitled to pension remuneration, enviable power supply, and progressive health care services, yet the funds made to sponsor these are at home, temporarily unemployed. If this persist, it would result in fiscal deficit widening with jobs still intact. 

Tailoring this with the colours of the Green White Green, the Green – agriculture – has the potential to lose its colouring in Nigeria. Africa’s largest economic sector, according to figures released by Mckinsey & Company, a notable research and development firm, is agriculture, indicating 15 percent of the continent’s total Gross Domestic Product (GDP) with 100 billion dollars annually. With Nigeria’s distributive portion of 21.2 percent (Statista, 2020), a vatic voice might say that if Nigeria shuts it doors indefinitely, it would not need to reopen them to combat food shortage. However, this faith would only be accomplished if work were consistent. With due credit to the epidemic, the production of various agricultural products has been reduced and even when these items are produced, the interstate delivery has been flawed. 

It is a sad blend that though oil production might persist during the epidemic, the chain of distribution would reluctantly stick in the mud. The oil and gas sector is dissolved into three segments: Upstream, Midstream and Downstream. The Upstream division indicates companies inclined towards exploration and production of oil and gas. Midstream segment are personnel devoted to the movement of demodulated raw materials to refineries for processing. Downstream businesses are the refineries where natural gas is transformed into gasoline and other petroleum products (Andrew et. al.) All segments are naturally dependent on the success of the other. It follows that when a sector is restricted from performing, like by the operation of a lockdown, chain of distribution is hampered and sale, would be stalled indefinitely. From practice, this chain anchors the weight of the Nigerian economy sector. Backing up this notion, is Nigeria’s reliance on crude oil according to figures produced between 1981 to 2015, above all other forms of natural resources, thereby tagging the economy as one with a singular stream of limiting income (Jack et. al, 2016).

Besides, we only need to toss a coin into numerous empty offices to draw the sad echoes of the coronavirus epidemic. This plays towards the tune of physical businesses in the world. Forbes (2018) has attributed a falling figure of 28 percent to the number of small business operating online. This leaves more than seven in every ten business owners, dependent on transportation, on-site management, free enterprise, physical maintenance policy, and customer service. Of all these attributes, not one has failed to be sucked in by the COVID-19 epidemic. It is a fact that when these properties have been taken away from a business for an extended period of time, what is left in its wake is an unrecognisable vacuum conjoined with the threads of loss. 


We would be building an analytic imbroglio if we consider the economic impacts of COVID-19 while tossing the legal angle to limbo. This is because the interplay of law and economy inspires a specific sweetness. One point where these two concepts meet is the law of contract. Every contract is unique to the parties concerned. Often times, they reach conclusive term based on how much the economy permits their mutual profitable bargain. Nevertheless, the end of the coronavirus infection could see the birth of legal claims for breach of contractual terms and aggrieved parties would be pushed to seek relief for breach of contract. The unifying theme across these actions would be non-performance of contract. In like manner, several defenses would arise. Notable of these is the defense of frustration and Force Majeure. 

The defense of frustration functions to mitigate claims or exonerate parties in breach of their contractual obligation. The court in Standard (Nigeria) Engineering Company Limited & Anor v. NBCI have stated that “if the performance of a contract depends on the continued existence of a state of affairs, then the destruction or disappearance of the state of affairs without the default of either of the parties will discharge them from the contract. Frustration, it is submitted only occurs under conditions that are totally out of the control of the parties”. Without contemplation, the scourge of  COVID-19 in Nigeria and its particles, especially the actions of restriction of movement, would measure up to a defined frustration of the performance of contract within the mind of the court. 

The force majeure defense has been contemplated to mean “something that is unexpected and unforeseen happening, making nonsense of the real situation envisaged by parties”. It operates in a contract, as a clause that has been previously inputted by the parties concerned, which as the wordings of the terms is dictated, could totally discharge the defendant of any liability. The aftermath of the COVID-19 epidemic could see a defendant seeking discharge through force majeure by specific words such as outbreak of diseases, pandemic or “an act of God” as a force majeure event. However, it would be the duty of such person seeking relief to indicate how the event amounted to non-performance. 

Concurrently, how much work is worthy of remuneration, could become a contention for the law, in the wake of the coronavirus epidemic. The general rule pertaining to an employer’s duty to pay one’s staff is fashioned with the common law rule of payment for work done by employees, in accordance with the stipulations of the contract of employment. Accordingly, the right to claim remedies for a breach of an employment contract obtains only when such employee is contractually in the right.  Walton, J. In the English case of Creswell v. Board Revenue held that in the event an employee is incapable in the performance of the duties they are authorised by a contract of employment, to perform, the doctrine of ‘no work, no pay’ applies and an action for wages is bound to fail.

This decision only gains an invite when the employee is incapable in the performance of the duties, authorised by a contract of employment. It does not indicate meaning to circumstances where the employee’s unfitness to work is because of a force majeure event, such as an act of God, disease, or epidemics such as the COVID-19. Applying judicial interpretation, the common law dictate, does not implicate the employee’s consideration for wages in the event of actual work, but is set on his disposition to work. Putting off any contradicting proviso in the contract of employment between employer and the employee, every employee when construed to be eager and disposed to work, as in the event of the work from home policy, due to the limitation of movement resulting from the lockdown, or being infected by the coronavirus infection, would not be refused wages so far the terms of contract have been practiced to the letter.  

Beyond employment, the impact of the epidemic on financial contracts also lays a target on the obligations of borrowers and obligors. Simply put, the coronavirus virus epidemic might arouse an Event of Default (EoDs) because of the incapacity to finance repayment obligations and the prevalence of Material Advance Change (MAE). The latter is typically defined and includes an event or occurrence, which when considered would lead to an adverse change in the nature of the business, the propensity of the borrower to repay a loan or the likelihood to perform contractual duties within the financial documents. In the aura of such occurrence, the lender can either stop the future disbursement under the agreement, demand reimbursement of all or part of the loan which have accumulated over time or take steps to enforce any rights of the lender under the contract documenting the loan. However, it is advised that in the case of an inability to fulfil the terms of a loan, there should be a deferment and not a total waiver of contractual agreements.


In the character of history, the lifespan of any epidemic is determined by how long it takes to provide a vaccine. For Nigeria, this singular factor could exorcise a crisis within the crisis, thereby placing the country in the incoming traffic of history. And though our prayers should not feature ill luck, our questions could run solo with one theme; damage control for the aftermath. With this mind-set, the epidemic could pioneer resourceful palliatives to make living through and the aftermath of the virus, less painful. One of these should address the rate of brain drain in the medical sector. 

If there is an imperfect time for Nigeria to stew in the poor management of human capital development, it is now. The increase in the emigration of health officials has become a defining challenge to the coronavirus epidemic. Interestingly, Nigeria has lost billions due to the imbalance between the medical personnel trained and the number that are subsequently engaged. This trend was documented by the Mo Ibrahim foundation , which estimates that more than 2 billion dollars have been expended on the training of doctors who later emigrate. In stemming this issue, Nigeria should take a leaf from her funding of entrepreneurship and Small and Medium-scale Enterprise. The goal is to establish a form of reward system, whereby young doctors are encouraged to build their own hospitals or health centres, in which the government will own part of the organisation in subsidy and infrastructural enhancement.  


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