/Nigeria: Why the economy must not be destroyed fighting Covid-19

Nigeria: Why the economy must not be destroyed fighting Covid-19

by EVANS WOHEREM, PHD

The world entered into the year 2020 with great expectations and could not foresee the crisis that it was entering into – the Novel Coronavirus (COVID 19) crisis. The novel virus has thrown the whole world into a war-time like situation with the implementation of citywide and country-wide lockdowns as containment measures by almost all countries of the world. There have been several confirmed cases and death tolls worldwide, with the USA currently being impacted the most, with a staggering number of confirmed cases and deaths which stood at 1,010,507 and 56,803 respectively (as of Tuesday 28th April 2020). Countries like Italy, Spain, France, UK and Germany have all been equally heavily impacted. African countries are also slowly being heavily and worrily impacted

The pandemic is real and countries are thus facing a new kind of challenge and so need to employ unique strategies for dealing with this novel reality. With the alarming number of cases being reported, the health systems of practically all the countries of the world are being overwhelmed. Not only that, global and local economies stand at their worst in decades. Infact, the world economy is now declared to be in a recession by the World Bank and International Monetary Fund. The plausible fear is that it could even degenerate into a world-wide depression.
National response

A Pandemic that is capable of causing the evinced staggering damages to the economies of practically all the countries of the world, should not be treated with kids’ glove. It should be treated drastically, aggressively and holistically. Accordingly, whatever Think Thank or Task Force that will deliberate, recommend and manage the responses on how to cope with the pandemic ought to comprise of experts from many key disciplines.

In most African countries, as well as here in Nigeria, our national actions towards fighting COVID 19 have largely been similar to the actions of the more developed countries of the world, in Europe and Asia, as recommended by the World Health Organization (WHO). This, to me, is a mistake because of our unique different cultural settings, as well as the differing levels of infrastructural and economic development between us and those more advanced countries of the world. Decisions being taken by each country should be unique and peculiar to the unique situations of each of those countries. Cutting policy recommendations that are used in the developed World and pasting them here in Nigeria will not work well for us. In fact, it is more likely to make things worse for us.
The key recommendation from the WHO, which we have adopted hook, line and sinker, revolves mainly on the need to undertake “Social Distancing”- which many countries are practicing maximally through “Lockdowns” and through maintaining a physical distance of at least six feet with others when out in the public. Other measures are washing of hands with soaps using running water or using alcohol based hand sanitizers, using of face masks when outdoors and avoiding of touching of our mouth, eyes and nose. I don’t actually have a problem with all the above measures, apart from the total lockdown of cities or of our country. I believe that a total lockdown is counter-productive. It is tantamount to “throwing away the baby with the bath water”.

Yes, this pandemic is an evil that is capable of wreaking a heavy havoc on the health and lives of our citizens and thus an enemy we should fight hands down. However, in doing so, it must not be to the detriment of our economy. Truth be told, ours is a peculiar environment, where keeping to all the WHO recommendations on how to overcome the Pandemic would be a tall order. According to WHO, the six areas that nations need to master in order to ease the lockdown recommended by them are in the areas of control of transmission, guaranteeing the condition of health workers, minimizing the risk of infection in open spaces, introducing preventative measures in offices and schools, controlling the possibility of imported cases, as well as ensuring that members of the public are constantly informed of the dangers the virus presents. Here in Nigeria, we have not put enough in place to control the transmission of the virus. Nigeria’s health workers and health care facilities have suffered neglect by successive governments. Therefore, the state of our health infrastructure in the country cannot guarantee the realization of the WHO guidelines towards a successful lockdown.

So, in the case of a highly populated, poor developing country like

Nigeria, I do not think that locking down the country for several weeks or even months is the best approach. If lockdown we must, the best approach would have been to lock the country down for only between three to four weeks, so as to embark on massive testing during that period and so that we can also use that period to urgently and rapidly ramp up most of the deficiencies in our healthcare infrastructure to ensure that we are more ready to cater for those that need to go to the hospital amongst those testing positive to the virus, especially those that would need to be taken to the ICUS for a more rigorous and closer healthcare attention, especially those who may need oxygen and ventilators.

However, the pace at which testing is going on at the moment in the country is not encouraging at all. For Nigeria to have conducted less than 15,000 coronavirus tests in a population of about 200m people since the outbreak of the virus in the country is to say the least disappointing. If as a country with over 200m citizens, since the lockdown was imposed (on March 30, 2020 – 4 weeks), we have tested just over 11,300 persons, how long do we think it will take to achieve the results of the lockdown model adopted? The presidential task force on Covid-19 said they hope to increase testing from 1500 per day to 3000. If we juxtapose this with our 200m capacity, it will take 66,666 days (183 years) to test the entire Nigerian populace. Yet, we are being told that the country is massively in need of new test kits. Very disturbing!

A total lockdown is perhaps good for many of the countries of the West, but not so for our country. It is difficult to observe a total lockdown here because of our peculiarities. In Nigeria, nearly 80% of the people rely on their daily wages to survive. In a country where over 100m people fall within the working class, a total lockdown is not workable. When you lock them down, the over 100m poor, together with others, you breed criminality, unrests and upheavals. And this is exactly what has started to occur in many parts of the country currently.

What some other countries are doing

A few good countries inside and outside of Africa have implemented COVID-19 national strategies that resonate well with the intent and spirit of this submission. In West Africa, Ghana has been able to test more than 100,000 people. It is now making use of drones to fetch test results from test centres scattered all over the country, even in rural areas, to the two key cities of Accra and Kumasi. Senegal decided to task their indigenous creativity, and have thus produced their own local test kits and ventilators, which they are now using in the thousands. Outside of Africa, countries like Sweden and South Korea, rather implemented no lockdowns, but are ensuring that they are testing widely and maintaining social distancing, wearing of masks and adherence to all the hygiene etiquettes

Challenges

Nigeria has relied on oil for too long. Unfortunately, the price of oil at the international market has now fallen to uneconomic levels. We are therefore going to be in trouble as a nation if we cannot find buyers of our crude at profitable levels. As a mono product economy, we were already in trouble before the lockdown. As it stands now, and if the glut in the oil market continues as it is presently, the Federal Government will no longer be able to continue with the monthly distribution to the Federal, State and Local governments from the FAAC account. This therefore is a perfect time for the State Governors to rethink their economies. They need to think out of the box and come up with how they can continue to make their states economically viable, as well as how to ensure that they are self-reliant and able to provide for themselves the needed physical and social infrastructure required for their states. Equally, this period provides the opportunity for governments at the state level to explore and develop products that will ensure their economic and development sustainability.

The price of crude oil tumbled like never before in the last 20 years. It is currently below $15 per barrel from above $60 just before the pandemic. It has never been this bad in the last two decades and this has made a mess of the Nigerian federal government’s budget estimates for 2020; making salaries payment, debt obligations and other projections uncertain. This is clearly so because the price of crude oil, which contributes over 90% of Nigeria’s externally-generated revenue, now hovers below $20 per barrel, which is far less than the budget’s benchmark of $57 per barrel, and this therefore signifies tough times ahead for the country.

All the years gone by, Nigeria depended mainly on its oil to service the economy, instead of diversifying the economy. This has exacerbated the challenge we are now facing. Even without COVID 19, the economy was already doing badly, due to the drop in oil price. If we continue the lockdown and contain model which we are currently pursuing, the implications therefore is that no other sector of the economy is going to be producing or yielding serious national incomes, thus leading to poverty and lowering of the standard of living of the people. This will inadvertently lead to increase in depression, criminalities and riots – as already being witnessed in Lagos, Delta and Ogun states. We will be toying with fire if we continue with the lockdown. We should now come out with a workable exit strategy that will hopefully assist us to step down one wrung of the lockdown ladder at a time.

What we must do

We need to pay attention to how to stop this pandemic in Nigeria, without continuing to lockdown our economy, as well as how to use this opportunity to rejig our economy.

A closer look at the deaths resulting from the coronavirus outbreak shows that only 10 -15% of the cases end up in the Intensive Care Unit (ICUS) – these are mainly older people of over 65, and people with underlying health issues. The majority of the population do not belong to the above percentage. We should therefore not lockdown everybody in order to curb the spread of the disease. If we have to lockdown, we can lockdown, say, people who are 65 years above or people with underlying health conditions.

We should improve our ICUS, get more oxygen and ventilators, and make sure our healthcare infrastructure is appropriately ramped up. Testing should be intensified because currently, the pace at which this is done is absolutely disappointing. We must get thousands of test kits, perhaps from places like Senegal or quickly start producing ours.

I have always advocated for an economy that would place priority on aggressive building of social infrastructure, hospitals, housing, roads, and other transport infrastructure, as well as the advancement of all our institutions. You don’t build the economy by telling people who are supposed to be working hard at work, advancing our economy and their standards of living, to stay at home. It is an anomaly. It is tantamount to killing our economy. Yes, fight COVID-19 we must, but we should not “throw away the baby with the bathwater”. While defeating COVID-19 is very paramount and requires our absolute commitment and diligence, we must ensure that we are doing so intelligently, and not to the detriment of our economy, as the repercussion of that will be too onerous and difficult to ponder. No matter what, we have to ensure that post Covid-19 we still have a healthy economy to fall back to.