Kingsley Moghalu’s statement on the Covid-19 crisis
We must not waste this crisis. We must learn and apply its important lessons as a country.
The Coronavirus Disease-2019 (Covid-19) epidemic presents a difficult and challenging time for the world and our country Nigeria. This crisis has security, social and economic dimensions, and we must now and in its aftermath fundamentally re-examine our patterns of thinking, acting, citizenship and leadership, and how this all translates into governance.
I commend the Federal Government of Nigeria and State Governments, as well as the Nigerian private sector, for their progressively gallant efforts to protect our citizens from the ravages of Covid-19. Much more, however, remains to be done, and we must recognize the underlying prior failures of leadership, governance and citizenship that have left us uniquely vulnerable.
Apart from the absence of healthcare infrastructure to handle large numbers of coronavirus patients should this become the case --as is likely – there is the unique challenge posed by widespread poverty. This is reflected in the large crowds of the urban poor in commercial cities such as Lagos, Kano, Onitsha and Aba, congested into tight spaces and seemingly oblivious to the requirement for social distance as they engage in their daily “hustle” for subsistence. This imperative of poverty is the greatest immediate threat to curtailing the spread of Covid-19 in Nigeria.
First, in addition to measures already taken, the Federal Government of Nigeria should shut down the whole country for one month, barring only existentially essential services. This is necessary in order to give more time for contact tracing, to reduce community spread of the disease, especially in urban slums and rural areas, import and deploy testing kits, and to deal with emergency treatments while it can still conceivably be handled. The Nigerian police and, if necessary, the Nigerian Army, should enforce this measure across the country.
Even in several economically advanced nations, compliance with shut-downs is a huge challenge, let alone in a country in which literacy and education levels are not what they should be. There also has to be much stronger communication about the coronavirus pandemic, and what citizens need to do, in local languages. Another reason for a complete, enforced shut-down is the failure of Nigerian citizens inherent in overzealous religion, where citizens continue to insist on gathering in large crowds in churches and mosques against public health advice. This tendency flies in the face of the World Health Organization’s recent confirmation that Covid-19 is not only spread by physical contact through our hands touching our mouths, noses and eyes, but is also airborne for limited periods.
Second, what should we do about the loss of livelihood for our already poor and vulnerable people? Here is where our lack of fiscal savings and a real fund for the rainy day become truly painful. The budgets of federal and state governments must now be COMPLETELY re-programmed to focus on Covid-19 in 2020. With the exception of security and the payment of salaries, not much else should really matter now. We are at war with an invisible enemy. The N50 billion fund established by the Central Bank of Nigeria for families and small businesses will not be adequate to address the crisis if and when it escalates.
The fiscal authorities must plan and make provision for the subsistence funding of all extremely poor Nigerians and individual citizens, numbering approximately 100 million, for 30 days in this scenario. In a back-of-the-envelope calculation, if a sum of N20,000 were to be made available for every impoverished family to stock on food and supplies for a month in a Covid-19 total shutdown scenario, this would require an intervention of N2 trillion! Even the N10-trillion federal government budget for 2020 may not be able to carry this burden, since it is based on projections that have turned out (as usual) to be unrealistic because of reliance on crude oil revenue and the absence of a broad base of domestic taxation. This would be possible, however, if the burden were to be split with state governments. Additionally, members of the National Assembly should donate 50% of their emoluments to this effort.
Third, as I have emphasized in recent interviews, the Covid-19 crisis has graphically exposed the failure of the federal and state governments to invest adequately in human capital – healthcare and education – as a priority. This is incompetent governance, pure and simple. Nothing is more fundamental than the health of Nigerians, which gets too little a portion of government budgets. Bearing in mind that Nigerian households in an already-impoverished population bear 70% of healthcare expenses out of pocket, the federal government must now urgently commence funding of the Basic Healthcare Provision Fund with 1% of the Consolidated Revenue Fund as provided in the Nigerian Health Act (2014).
Fourth, our economy appears headed for a second recession in four years. The Covid-19 crisis further demonstrates the ludicrousness of the now-suspended plan to borrow $22.7 from foreign countries (mainly China) for “infrastructure”. That plan should be cancelled completely. The Nigerian government will likely not be able to service (let alone repay) such debt in the next few years. We need urgent fiscal reforms immediately after the coronavirus crisis. Our economy must become truly diversified away from crude oil. The petrol subsidy needs to be removed and the fuel pump price deregulated, with savings from subsidy removal invested urgently in the health and education sectors. Foreign exchange reforms that truly incentivize a shift away from oil-dependency through increased manufacturing and export trade remain urgently needed.
The naira should be strategically and proactively devalued, and then align this move with appropriate fiscal and trade policy rather than, as is often the case, having devaluations forced on Nigerians with no accompanying policy reforms. The CBN should scrap its forex-access restrictions on the importation of over 40 items. Our fiscal authorities should instead impose high tariffs on items perceived as “luxury” or non-essential (and generate revenues from such tariffs), while industrial and trade policy should establish subsidies and other incentives for domestic manufacturers, especially those that can provide proof of export orders that will bring in hard currency and take advantage of the naira devaluation in the international market. If this approach is adopted, Nigeria will progressively wean itself from crude-oil revenue dependency. This is how a structural transformation of the Nigerian economy can happen. Political will, policy shifts and transparently administered market incentives, not rhetoric, are essential to achieve this goal.
Finally, Covid-19 in Nigeria is a disease imported and spread by the elite class. Unfortunately, rich and poor will bear its brunt. While we must have sympathy for any victim of Covid-19 regardless of social status, and many have contracted the virus through little personal fault, the irresponsible failure of some elite individuals to abide by public health protocols in recent weeks, hosting and attending birthday parties, declining to self-quarantine as circumstances require, as well as submitting false contact information following international airline travel, is noteworthy.
No one of us is immune from Covid-19, and we must remain even more vigilant. But we must not waste this crisis. We must learn and apply its important lessons as a country.
Professor Kingsley Moghalu is Convener, To Build a Nation (TBAN). A former Deputy Governor, Central Bank of Nigeria, Moghalu ran for President in the Nigerian 2019 general election.
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