by Olu Fasan
Most countries responded to the coronavirus pandemic by prioritising public health over economic health. They introduced widespread lockdown and social-distancing measures. Scientific and medical experts say that only such measures could save lives until a COVID-19 vaccine is developed. Most economists argue, rightly, that there is no trade-off between health and wealth. So, as Martin Wolf, the Financial Times’ chief economics commentator, put it, “maintaining the lockdown and saving the economy are mutually compatible”.
But everyone also agrees that the economic costs of the lockdowns are horrendous. For a start, the fiscal stimulus packages are eye-popping. For example, the US launched a $2.2 trillion intervention package to support businesses and workers. Britain’s was about £400 billion, including one-off cash grants and loan guarantees for small businesses, and a job retention scheme under which 80 percent of the incomes of workers and the self-employed, who are forced to stay at home, is paid by the government, up to £2,500 every month.
Yet, despite these stimulus packages, the economic situation and its impact on jobs and livelihoods are extremely disturbing. Various businesses, particularly in the hospitality, leisure, retail and airline sectors, are failing, with massive job losses in tow. Recently, the International Labour Organisation, ILO, warned that the pandemic would destroy the equivalent of 195 million jobs globally. The lockdown measures are killing businesses and destroying jobs.
President Trump famously said that “We can’t have the cure be worse than the problem”. Many governments think so too. As a result, Western countries have begun to announce their exit strategies, setting out how they would begin to the ease the lockdowns.
Nigeria has followed the above international template in its COVID-19 response. First, it imposed lockdown and social-distancing measures, although without any significant level of testing and contact-tracing; second, it introduced fiscal intervention measures, including the so-called social palliatives; and, third, it has now announced its own exit strategy, with “a phased and gradual easing of the lockdown.” Yet, while Nigeria has seemingly mimicked the West’s response, it has not done so with sound science and evidence or with the consideration of impacts, particularly on its economy and the wellbeing of its people.
Take the lockdown first. President Buhari said that “initial models predicted that Nigeria would record an estimated 2000 confirmed cases in the first month after the index case”. This raises the question: why should Nigeria shut down its economic hubs for several weeks because of a projection of 2000 cases, not deaths? The UK, the US, German and France strongly hesitated to impose lockdowns until Professor Neil Fergusson of Imperial College London published a modelling which showed that COVID-19 could lead to 250,000 deaths in the UK and up to 1.2m in the US, if not suppressed.
If the 2000 cases were an accurate estimate, what it suggests is that COVID-19’s Reproduction value, “Ro”, was below 1 in Nigeria. Epidemiologists say that if the Ro is below 1, it means that every infected person passes the disease to less than one person, meaning the virus is containable. Surely, if the projections of 2000 cases were accurate, what the government needed to do was to undertake mass testing and contact-tracing so as to isolate and treat the 2000 and the few people that may have infected. It makes no sense to shut down the economy and further pauperise already impoverished Nigerians because of a projection of 2000 COVID-19 cases – not deaths – in a country of 200 million people.
A recent study shows that South Africa’s coronavirus lockdown was costing the country’s economy $716 million a day, with 1.7 million South Africans estimated to lose their jobs. Yet, South Africa has had 5,647 confirmed COVID-19 cases and 103 deaths. Many South Africans are asking whether the high number of failed businesses and job losses was a price worth paying for the few number of fatalities from COVID-19. There is no conclusive evidence that the draconian lockdown was responsible for the low number of fatalities.
The same question should be asked in Nigeria. President Buhari said last week that “many of our citizens have lost their means of livelihood; many businesses have shut down.” Of course, there are no figures on the number of failed businesses and job losses in Nigeria, but they are likely to be very significant. Yet, even with the 1,932 confirmed cases and about 60 deaths, as at last week, the question is: wasn’t the lockdown a bigger disaster than the virus? Boko Haram and herdsmen have killed several thousands of Nigerians, yet the government’s response to the coronavirus has caused more economic and social calamities than its response to the insurgency and banditry.
“The imposition of social distancing and other measures after easing the lockdown on Lagos, Ogun and Abuja still threatens the survival of many businesses, putting millions of jobs at risk. A good COVID-19 exit strategy must save jobs and livelihoods!”
What is more, despite the reported fiscal interventions and social palliatives, the majority of businesses and workers affected by Nigeria’s coronavirus lockdown are not receiving the support they badly need. Where are the cash grants for small businesses? Where are the government-guaranteed, free-interest loans for SMEs? Where is Nigeria’s equivalent of a job retention scheme that pays a large proportion of the wages and incomes of workers and self-employed people, and thus allows them to have some income while they stay at home? In a recent speech, Professor Charles Soludo, former central bank governor, referred to a study showing that only 2 percent of bank accounts had N500,000 (about $1,300) and above. This means that most people do not have savings and really cannot survive by staying at home; they must go out and work to eke out a living.
Which is why the government’s decision to ease the lockdown is welcome. Yet, the conditions attached to the exit strategy or the “new normal” that President Buhari announced last week would still harm businesses and jobs. The partial release of the lockdown, which starts today, Monday, 5 May, would involve the following: an overnight curfew from 8pm to 6am; a ban on “non-essential” inter-state travel “until further notice”; a mandatory use of face mask or coverings in public; and mandatory physical distancing. All of these would still create huge problems for most businesses and ordinary Nigerians.
Take the wearing of face masks. The World Health Organisation says it does not recommend their general use in public because “they can be contaminated by other people’s coughs and sneezes, or when putting them on or removing them”. So, by making the wearing of masks in public “mandatory”, Nigeria may be creating a health hazard. What’s more, it is putting another burden on poor Nigerians. How much would the face masks cost, and how many Nigerians can afford them? This would enrich a few and further impoverish many!
Then, there is the indefinite ban on “non-essential” inter-state travel. This is the only means of livelihoods for many commercial drivers. How will they earn a living if they cannot take passengers from, say, Lagos to the East of the North? And who will support them and their families while they pack their cars and buses making no money?
The most damaging to businesses and jobs of the new conditions is the so-called “mandatory physical distancing” rules. This means that while people are no longer locked down at home, they must maintain physical distancing in public and at work. But, as someone said, physical distancing would be a disaster for companies that rely on face-to face contact with customers and that depend on heavy footfall in their shops. How do you maintain physical distancing in busy public markets in Lagos or Abuja?
Truth is, the imposition of social distancing and other measures after easing the lockdown on Lagos, Ogun and Abuja still threatens the survival of many businesses, putting millions of jobs at risk. A good COVID-19 exit strategy must save jobs and livelihoods!