COVID-19 has economically impacted countries worldwide, particularly low-to-middle-income nations. One such nation is Nigeria. The impact of COVID-19 on poverty in Nigeria has been especially disastrous. Nigeria is the most populous and has the largest economy in Africa. Because of this, the downturn in Nigeria’s economy, as a result of COVID-19, affected a significant number of people and worsened the poverty level in Nigeria.
Nigeria Before COVID-19
Although its economy was steadily improving before COVID-19, Nigeria already had high levels of poverty and inequality. In 2018, about half the population (87 million people) lived on less than $1.90 a day. Most of the nation’s poor live in rural areas and have markedly less access to clean water than those in urban environments.
Prior to the COVID-19 pandemic, the Nigerian economy showed consistent growth, with the per capita GDP doubling from $1,400 per person to $2,800 per person between 2000 and 2012. However, Nigeria’s high poverty rate did not reflect this economic growth because the growth fell behind population growth.
The status of women in Nigeria was also less than ideal in 2018. Nigeria has an extremely high maternal mortality rate: 512 women per 100,000 die in pregnancy or the year following from causes related to the pregnancy. By comparison, the maternal mortality rate in the United States in 2018 was 17.4 per 100,000.
What Makes Nigeria So Vulnerable?
Oil makes up about 90% of Nigeria’s exports and 50% of its government revenue. This lack of diversity makes Nigeria especially vulnerable. The drop in oil prices during the pandemic damaged Nigeria’s economy and harmed government revenue at a time when it was especially needed to fight COVID-19. The World Bank predicts that this could result in Nigeria’s worst recession in four decades. The Nigerian economy’s dependence on oil exports accounts for much of its loss during COVID-19, as does foreign investors’ aversion to what they perceive as risky investments in the Nigerian economy. Inequality and lack of employment opportunities also made Nigeria vulnerable to COVID-19’s negative influence on its economy. Its already susceptible position aggravated the impact of COVID-19 on poverty in Nigeria.
As recently as 2016, Nigeria had a recession. After 25 years of growth, Nigeria’s economy contracted due to lower oil prices. Prior to the 2016 recession, Nigeria’s economy was growing very quickly at 6.3%. Since then, it has fallen to around 2.2%. However, until 2020, economic growth remained positive. Nigeria was less prepared for COVID-19 than it was for the 2016 recession; the pre-COVID economy was less healthy than the pre-recession economy. Interest rates and the deficit were higher and the excess crude account was not sufficient to cover the needs of the people or allay the impact of COVID-19 on poverty in Nigeria.
How Did Nigeria Respond to COVID-19?
Although Nigeria has a large and growing population, it can only test around 1,500 people a day for COVID-19. The healthcare system cannot meet the needs of the people, with only 20 frontline healthcare workers per 100,000 people. Over a year into the COVID-19 pandemic, some still consider Nigeria’s testing capacity “inefficient and insufficient.”
On March 30, 2020, President Mahummadu Buhari declared a lockdown for Lagos and Ogun states. The government eased this lockdown in early May 2020 due to the economic toll it was taking on the country. In an attempt to mitigate the impact of COVID-19 on poverty in Nigeria, Buhari launched several fiscal and stimulus measures. These included money transfers for the poorest and vulnerable, employment programs and a credit facility for healthcare providers and manufacturers.
Money Transfers and Loans
The money transfer program focused primarily on the urban poor, giving 10 billion nairas directly to two billion households as a means to lift them from poverty and improve the local economy. Nigeria’s employment program focuses primarily on unemployment and getting Nigerians into any jobs available. This largely overlooked the underemployment plaguing young, educated Nigerians.
The credit facility extends loans at a limit of 20% of the company’s three-year average turnover with interest rates of 5% to 9% annually, with the intention of stimulating and supporting local production of medical supplies, reducing healthcare tourism by Nigerians and building healthcare infrastructure. The credit covers the production of drugs, medical equipment and technology. The Central Bank of Nigeria determines the expansion and establishment of healthcare service facilities, supplying healthcare services and necessities and other activities.
Unfortunately, Nigeria, like other African nations, went on to face a second wave of COVID-19 and has just introduced more protocols to prevent a third wave. This includes massive travel restrictions, increased testing and quarantine and isolation protocols.
NGOs Working in Nigeria During COVID-19
The Consultative Group for International Agricultural Research (CGIAR), a global partnership uniting organizations dedicated to researching food insecurity, has been actively involved in aiding Nigeria during the COVID-19 pandemic. Specifically, in cooperation with the Nigerian government, it has begun distributing seeds to farmers across Nigeria. CGIAR conducted surveys to ascertain the effect of COVID-19 on supply chains, compiling the data in an interactive database. CGIAR scientists also created a crowdsourcing tool to collect real-time Nigerian local price data, revealing threats to food security.
The Good News
Nigeria implemented lockdowns relatively early compared to other African nations and targeted its lockdowns, completely exempting some essential services, such as farming, power and water supply systems and manufacturing. This lessened the impact on food systems and may have lessened the impact of COVID-19 on poverty in Nigeria.
Post-pandemic, Nigeria may take the opportunity to diversify its economy, discourage inequality and improve its healthcare systems. Having learned from COVID-19 about the vulnerability of oil, costs of inequality and poorly prepared healthcare systems, they may become better and stronger as a country.
– Hilary Brown