Yesterday, the Head of Service of the Federation instructed that all the non-essential federal workers, from level 1 – 12, should work from home in order to curtail the spread of coronavirus. This is a welcomed development. In fact it seemed the FG listened to the First Lady of Nigeria, Aisha Buhari, who called on all state governors to send their workers home, in addition to the closure of schools, because if these workers contract the virus, they will carry the sickness home and spread to their children. This work-from-home for federal workers is a novel development, except that majority of them don’t know how to perform their duties from home, nor do they have facilities that will ensure they do them effectively (that is, if the manual ways of doing things in the country will warrant that).

Aisha Buhari is not the only Nigerian that has called for total lockdown as a way of combating COVID-19; a lot of other Nigerians have been calling for it. People are panicking and accusing the FG of waiting for the virus to spread before stopping movements within the country. What they didn’t allow their anxiety to show them is that Nigeria is not a country where such compulsory “quarantine” will be possible. Or rather, it might prove more disastrous than the virus itself.

Thanks to social media, a lot of people believe that the reason why there are high rate of COVID-19 in some countries is because they neglected the initial warning and allowed the virus to spread before they locked down their countries. What these people didn’t check is whether the “news” they read and listened to were authentic; or if there were other measures these countries failed to take, other than the total lockdown.

If we decide to lockdown Nigeria all of a sudden, believe me, there will still be leakages because a lot of things that need to be put in place before this is done are not there yet. I will try to give the challenges that will cause this failure in three main categories, which are Economic, Social and Health.

A. Economic Challenges

a. Low Income Earners: A lot of Nigerians depend on daily earnings to survive. These people constitute a major number of the population. Without their daily pay, they and their families will have to starve, or scrap whatever they could lay their hands on until the next job comes. In other words, these people will still find ways to break out and find something to do.

b. Hunger-Related Deaths: Imagine that the country is locked down for, say, two weeks or more, how will low income earners be able to access food? I know people are advising that we stock our homes with foods and other necessities, but how many people have asked whether everybody has enough money to buy food that will last for a week, not to talk of “indefinitely”. The only thing I’m envisioning here is that this total lockdown will bring up another problem – hunger-related deaths. And believe me, no person will sit back and watch his dependents die of starvation. So, this lockdown will not work in this situation.

c. Lack of Access to Credits: Some people in developed countries have credit cards, which they are using to sustain themselves and their dependents. In Nigeria, we don’t have that privilege. So if the money in your account finishes, you are either going to sit back and encounter deprivation, or you go out and hustle.

B. Social Challenges

a. Housing Arrangements: When some people talk about lockdown, I think they don’t understand the essence. Maybe they thought it just means you sit down in your compound, or hang around your street; so long as you don’t go far from home, or you don’t go to work, church and mosque, you’re good. This is why somebody that lives in Face-Me-I-Face-You building, where there are about twenty rooms in each floor of a 3-storey building, is asking for a lockdown. This people in this sort of living arrangement will have to come out to fetch water; they will have to cook in a general kitchen or in front of their “apartment”; they will share toilets and bathrooms; they will sit outside in the evening because the weather is hot; they will still interact and mix up with neighbours. In the end, the lockdown will not be effective.

b. Access to Amenities: Water, electricity, gas (kerosene, charcoal or firewood) and other basic amenities do not find their ways into people’s homes; people have to source for them. Imagine that you’re in a lockdown and your water finishes. You are not to go out and buy because there’s no place to buy from; and water board is out of the question; just imagine yourself in that situation. This is also the same thing with electricity, where you’re almost the one generating your power. Where will you then buy fuel to power your generator? These are just some reasons why people will break the sit-down-at-home-don’t-come-outside rule.

C. Health

a. Inaccessible Medics: Nigeria has no “ambulance system”. If someone gets sick, his relatives will have to find means of taking him to the hospital. Those that don’t have cars had to hire cabs for that service. So who will come out to help move the sick when there’s no access to transportation services?

There are so many other reasons why this country is not ripe for battling COVID-19 through total lockdown. But there are other possible ways of getting the virus contained, only if the FG is ready to act as fast as possible.

Yesterday on Twitter, an hotelier tweeted that he needs COVID-19 test kits for his clients, most of whom wanted to conduct the test. His call for information on how to access this kit came shortly after a Nigerian voluntarily submitted himself for a test (even when he had no symptoms) and came out positive. This became an eye-opener that most people may have this virus without knowing. It also showed that there are people that wanted to conduct this test but couldn’t because NCDC only tests those that exhibit symptoms. In other words, Nigeria is about to make the same mistakes most of these Western countries made.

This is why the Federal Government should act outside the box and provide private testing kits for all Nigerians. I am not saying the government should spend all it has to provide this kit (because I don’t know how much is in the government’s coffers). What I am throwing open here is that the only possible way to contain this virus fast enough is by giving EVERYBODY the chance to conduct tests. This campaign can start from Lagos and FCT, where more cases have been recorded, and then spread to other parts of the country.

Strategic locations may be used for this test. For instance, airports, motor parks, banks, churches (oh yeah), mosques, markets too, and other public places may be good places to start from. If the government cannot sponsor this alone, they can invite private individuals to donate towards the process, which I know they wouldn’t mind doing. Alternatively, government can provide favourable atmosphere for private pharmaceutical companies to produce and sell the test kits at subsidised rates, so as to avoid unnecessary bottle necks. By this, it will be easier to reach and quarantine positive cases (especially those without symptoms) before they spread the disease unknowingly.

As Nigeria and Nigerians battle with this virus, let us remember that what works in A may not work in B; however, let’s observe social distance and personal hygiene until a substantive solution is found.

Devaluing the Nigerian Naira without supporting policies will only result in another devaluation in 3-4 years. What Nigeria needs now is to reduce tariff on raw materials while increasing tariff on non-essential finished goods. And quickly offer tax-incentives to any firm that generates at most 1MW of power by itself so that independent power can enter balance sheets, not as pure expenses, but as leverageable investments to cushion P&L statements. Spending 50% of the power budget on independent power  via tax credits will put urgency since the national grid concept has clearly failed in Nigeria.

The central bank will scale inflation and Nigeria will not benefit through a boost on export if we continue to devalue Naira as a pure mono-policy. More so, to encourage exports, I will waive fees on exports through an index where if companies meet local demand levels, exports can go free of most fees.  The goal would be to accelerate non-crude oil exports to diversify sources of foreign exchange. I expect this devaluation to hit at least N420 per $1.

The derivative and black markets suggest the naira is still under plenty of strain. The price of three-month non-deliverable forward contracts has surged to 421 naira per dollar, signaling traders see another 10% devaluation in that period. One-year NDFs rose above 500 for the first time on Monday. The black-market rate has weakened to 403 from 380 this week, according to abokifx.com, a Lagos-based website.

“While it’s commendable that they’ve weakened the currency, it falls short of our fair value estimate of 410,” Yvonne Mhango, a sub-Saharan Africa economist at Renaissance Capital in Johannesburg, said. “It would be positive if the central bank were to also introduce a flexible foreign exchange rate, and move away from near peg.”

The Abuja-based central bank will likely lower its key rate by 50 basis points to 13%, according to a Bloomberg survey of analysts. That may help the economy, which will be hit by lower crude prices and the spread of the coronavirus, with the government suspending international flights and closing land borders on Monday. But it would still leave Nigeria with one of the highest base rates globally.

Previous devaluations have not positioned our foreign exchange, this one should be different.

I posted this on LinkedIn also:

Here are the possibilities on how Nigeria could recover post-coronavirus pandemic. Let’s do some academic work here: which one do you expect for  Nigeria by 2023.

James Bullard, the president of the Federal Reserve Bank of St. Louis, has predicted a possible halving of U.S. GDP (far worse than even Goldman Sachs’s dire prediction of a 24% drop), Fortune noted in a newsletter. On nominal value, the U.S. has the world’s largest GDP at $21.2 trillion with China coming behind at $14.24 trillion, according to data from Trending Economics.  While China will certainly see a drop in GDP,  if Bullard’s prediction comes to pass, it could possibly see the U.S. and China at near nominal GDP parity for the first time, as many expect the coronavirus impact in the U.S. to be more than China’s. (On PPP, purchasing power parity,  China is the largest economy, with a GDP (PPP) of $25.27 trillion.)

Show passion in this season. Coronavirus is bringing the best in many. The American Republican party is now a “socialist party” and Democrats are worried that Republicans are pushing big governments way too fast that Democrats may now look like the old Republicans, known for limited government. 

Trump now wants Obamacare badly and is open to offer special windows for enrollment (yes, the law he desired to kill on Day 1). Humans are the same: like the African politicians with no ideology or core belief, pandemic is showing that even the American and Western European politicians are just like them. In the age of austerity and paralysis, it is just about survival with ideological purity sent to museums.