THE EFFECTS OF COVID-19 ON OIL-PRODUCING ECONOMIES: A CONSIDERATION OF NIGERIAN AND ‎SAUDI ARABIAN VAT INCREASES

Abstract

The COVID-19 pandemic is a multi-faceted crisis with global impact. Its impact on many economies, including those dependant on oil producing and exporting, may compel such governments to make far-reaching policy decisions. In this context, we briefly consider the economic considerations on two major global oil producers, Nigeria and Saudi Arabia, as they also struggle to come to grips with their own broader economic reforms – announced before and during the pandemic. Specifically, under consideration is the increase in both countries’ VAT rates at (perhaps) inopportune times. We argue that the burden of the VAT increase on businesses fighting for survival amidst outfall of the COVID-19 crisis will be counter-productive in attaining economic reform objectives. JEL Classification Codes: G01, H21, H61

Keywords

• COVID-19 economic impact, oil dependence, Nigeria, Saudi Arabia, value added tax.