As Africa’s biggest economy marks its diamond jubilee, there are mixed views for its post-pandemic recovery forecast. But there is reason to be hopeful about the hyper-competitiveness and resilience of the country’s middle class and youth through the fog of uncertainty.
OCTOBER IS CELEBRATION SEASON IN NIGERIA. A historic excuse for some dining, sober reflection, and bouts of national moaning.
As Africa’s largest economy by GDP marks her diamond jubilee independence anniversary on October 1, the theatrics of the political class, the floundering economy, and the lingering effects of the coronavirus pandemic on the polity occupy the mind of most Nigerians.
Every October, Nigerians unite to engage in the pyrrhic ritual of collective nostalgia and wishful thinking. They embed their hopes, patriotic aspirations, pains and perforated potential in long speeches. This October, they will also ponder the fate of their personal and collective economy in the emerging post Covid-19 world.
Some 42% of employed Nigerians surveyed had lost their jobs during the pandemic, according to the National Bureau of Statistics.
By July 2020, inflation had accelerated to 13%, the highest in 27 months. The pandemic showcased Nigeria’s (and also sub-Saharan Africa’s) underinvestment in her public infrastructure, housing, education and healthcare sectors.
Nigeria’s physician-to-patient ratio is four doctors per 10,000 patients, according to World Health Organization data. Statistically, a third of Nigerians born in 1960 may have already died.
The country has the world’s third-lowest life expectancy rate of 55 years, only better than Central African Republic (54) and Sierra Leone (53), according to the United Nations Population Fund (UNFPA). War-torn Afghanistan has 65 years, Somalia, 58 and Syria, 73.
As this edition of FORBES AFRICA goes to press, over 56,478 Nigerians have been infected with the coronavirus, with 1,008 deaths, according to the website of the Nigeria Centre for Disease Control (NCDC).
The actual impact of the disease may be significantly more.
“This year is a lost year,” Ade Ayeyemi, a Nigerian and Group CEO of Ecobank Transnational Incorporated, told me in July, from his Lome, Togo base.
“From an economic and investment mobilization perspective, 2020 has been lost… we must now begin to focus on optimizing resources and taking advantage of the situation.”
Even before the lockdown, Nigerians were grappling with endemic unemployment and brain drain, the Boko Haram insurgency in the north of the country, disgust and semi-indifference to nepotism, religious intolerance, corruption, productivity hiccups and local and foreign currency constipation.
When Covid-19 arrived, the aviation, transport, retail, entertainment and hospitality services were hit. Income for artisans, street traders, event venues, cooks, cleaners, taxis, cab-hailing operators, beauty salons and barber shops dried up.
A sub-economy driven by Covid-19 relief initiatives emerged from the doldrums of the economy. The government set up a Presidential Task Force (PTF) on Covid-19 to coordinate relief efforts nationwide. The International Monetary Fund approved a $3.4 billion Rapid Financing Instrument for Nigeria in April. Nigeria’s 36 states and the Federal Capital Territory, Abuja also received a $104 billion World Bank Covid-19 support facility. The African Development Bank, the African Export-Import Bank and a plethora of multilateral organizations, private and state-owned enterprises, high net worth individuals, local and international non-profits including the Aliko Dangote Foundation, Jack Ma Foundation and Bill & Melinda Gates Foundation all contributed to federal and state Covid-19 relief funds.
In April, the private sector-led Coalition Against Covid-18 (CACOVID) announced it would help set up isolation centers in Lagos, Kano, Rivers, Borno and Enugu states and Abuja. It had also ordered for 250,000 supplies of test kits and 150,000 extraction kits to fast-track testing.
Sadly, the mega-donations and noble plans have had little impact on society.
“For a country of nearly 200 million, only around 350,000 persons have been tested,” admitted Dr Sani Aliyu, national coordinator of the PTF. This is way below the 1% of the population test target set by the government. Aliyu spoke on the live Television Continental program Your View, broadcast on August 17.
Curbing communal infection remains a key priority. But enforcing compliance for face-covering, social distancing measures and city-wide lockdowns has been difficult in a country where livelihoods depend on daily incomes.
Dr Chikwe Ihekweazu, an infectious disease epidemiologist and director general of the NCDC, says the pandemic is an excellent opportunity to upgrade health infrastructure nationwide and advocates “a bottom-up approach to fixing state healthcare with stakeholders from the public and private health industry”.
Recalling the country’s proven record of eradicating polio and containing the spread of the Ebola viral disease in 2014, Ihekweazu told reporters during a PTF briefing in Abuja in August: “The NCDC is working hard to ensure Nigerians have access to the Covid-19 vaccine when available. We are working with the African Union through the Africa Centers for Disease Control and Prevention (CDC) on a vaccine strategy to ensure global vaccine access.”
Unlocking ‘the new normal’
Sixty years after its political independence from British colonial rule and barely 10 years to the 2030 checkpoint of the United Nations’ Sustainable Development Goals, the ‘Nigerian project’ appears to be sprinting ahead on either of two lanes: depending on who is speaking, Nigerians are either experiencing a new nadir of hope or they are on the verge of activating and unleashing their locked-in potential.
“Nothing is normal anymore in this topsy-turvy economy,” Kayode Abayomi, a financial analyst and stockbroker-turned-agri-preneur told me in July, as government authorities began to ease the nationwide lockdown. “No doubt the coronavirus introduced a fresh set of problems but it has been six decades of struggling, stagnation and economic difficulties occasioned by systemic challenges of corruption and widening income disparity. This must be one of the toughest places for businesses to thrive.”
Despite a 4.6% per annum growth in the country’s urban population, upper middle-class earnings continue to fall in real terms. The national currency, the Naira, has depreciated and the value forecast for 2021 is not a happy story, as manufacturers struggle to satisfy local demand.
While Ecobank’s Ayeyemi believes the post-Covid-19 era offers Nigerian (and African) businesses and public institutions an excellent opportunity to create new business models and adopt new technologies, the sentiment on the streets of Abuja, Abakaliki, Dutse, Jos, Lagos and Port Harcourt is not so optimistic. Business folks and startups say commercial plans are constantly hobbled by regulatory and structural inefficiencies.
The July 2020 Business Expectations Survey of 1,050 businesses conducted by the Central Bank of Nigeria revealed widespread pessimism on the macro economy. Firms identified insufficient power supply, competition, unfavorable economic climate, financial problems, high interest rate, unclear economic laws, unfavorable political climate, insufficient demand, access to credit and lack of equipment as major factors constraining business activity.
Economists and business folks say transparent, business-friendly regulations and tax harmonization would help, for starters.
Thankfully, Ayeyemi’s confidence in the efficacy of technology is already being tested by proactive organizations and the justice delivery system nationwide, including the Lagos State judiciary which has begun the gradual migration to digital platforms.
With over 60 million Nigerians working from home, helping to boost their fortunes, it’s about time big tech – Skype, Zoom, Google, Microsoft, Amazon, Cisco, eBay, Alibaba et al –pays a lot more attention to the world’s largest concentration of black enterprise.
To put things in context. Africa experienced a 10% drop in foreign direct investment (FDI) inflows in 2019 to $45 billion, according to the UNCTAD World Investment Report 2020, which also forecast that FDI inflows to the continent will fall in 2020 by between 25% to 40% on account of Covid-19.
But dampened demand for Africa’s commodities, including Nigeria’s crude oil mainstay, meant investments flows to the region was already on the decline before the crisis.
“Beyond the volatile oil and gas sector, I expect demand for global IT outsourcing to Nigeria to pick up next year. The key risks remain the government’s inability to curb insecurity and hyperinflation. This intensifies brain drain which is upsetting the local IT ecosystem,” Chidi Ifediora, the CEO of Infospeq Solutions, an IT solutions and services company, told me.
Ifediora points out that as virtual reality activities become mainstream, the aspirational character and resilience of the middle class and Nigerian youth will shine through the fog of uncertainty and may actually be gradually overriding the systemic issues associated with the harsh economic environment faster than it seems. “Suddenly, as you can see, the youth voice is growing and everyone is hanging out online – for webinars, online meetings, parties, weddings, even funerals.”
Indeed, there is growing acceptance of pro-active gender politics and the role of the not-so-well-off youth in Nigerian society – with many youth becoming speakers and key opinion-formers online. This development has ushered in a new season of social media discourse in Nigeria.
For a class and status-conscious society like Nigeria, the pandemic has further democratized online and social media culture. The fact that the contagious virus has no regard for ethnicity or power was also a balm of sorts for many Nigerians. The business and military elite, members of the political establishment including the Presidency, the middle class and those at the ‘bottom of the social pyramid’ were not spared the wrath of the disease.
The rat race and a resilient economy
How do you recover from a global pandemic in an already troubled domestic economy?
A win-win partnership between foreign capital and local knowledge and expertise is required in Nigeria’s post-Covid-19 economy, says Mike Ikpoki, CEO of Africa Context Advisory Partners, an Africa entry and growth advisory firm.
Ikpoki, who once managed the Ghana and Nigeria subsidiaries of MTN, a pan-African mobile telephone company, reckons that more home-grown businesses with deep local expertise and much more nuanced understanding of consumer needs will be much better-positioned to serve local markets. Besides, “the seeming lethargy of FDI into Africa at this time presents an auspicious opportunity for stimulating local domestic investments to grow local companies more adept to the economic realities of the time”.
He, however, warns that henceforth, the corporate and communal threshold for resilience and the proverbial rat race will take on a new meaning in Africa’s most populous nation.
“Nigeria’s population and massive youth market makes the country a very dynamic and hyper-competitive environment,” he says.
Weyinmi Egbe, a Nigerian IT expert and Oracle’s Alliance and Channel Leader for Africa, argues: “In order to compete effectively in the emerging global economy, Nigeria’s public sector institutions need to lead the drive for the adoption of cloud computing and data analytics technologies to drive up efficiencies and productivity, and enable e-government solutions. All of these will very much depend on political will and altruistic public sector reforms.”
“The pandemic has exposed the fragility of global value chains and shown both the positive and negative sides of globalization. Markets and nations are extremely interdependent on one another. The aftermath of the crisis offers Africa’s business and policy leaders an opportunity to come up with a renewed and more focused agenda for their strategic economic ties with themselves and the rest of the world,” opines Kenneth Amaeshi, a professor of Business and Sustainable Development at the University of Edinburgh Business School.
Like the rest of Africa, Nigeria’s dreams of regional economic connectivity, and continental prosperity may have been delayed by the virus outbreak.
Notwithstanding this delay, Angela Emuwa, Chairman of Punch newspapers, says:
“Our 60th independence anniversary offers stakeholders and brand-owners a good opportunity to project their corporate responsibility and social values. We need to nurture ourselves into becoming an advanced, industrialized, inclusive, and humane society. It shouldn’t always be about promoting sales.”
-By Muyiwa Moyela