Since the first case of the deadly coronavirus was recorded in Nigeria February 27, the country’s private sector has played a starring role in supporting the government to curb the global pandemic and pledged more support than their counterparts anywhere else in Africa.
From the commercial banks to oil companies and wealthy individuals led by the continent’s richest man, Aliko Dangote, Nigeria’s private sector has committed to pour nearly N20 billion into giving treatment, building isolation centres and providing other critical resources needed to combat the spread of the virus.
While the country’s largest lender, Access Bank, will be teaming up with Dangote to provide treatment and isolation facilities with a 1,000-bed capacity, another leading lender, United Bank for Africa, is donating N3.5 billion to curtail the virus in Nigeria and a further N1.5 billion to the rest of Africa.
Add Access Bank’s donation, which wasn’t officially valued, and the N3.5 billion contribution of UBA to the N180 million ($500,000) funding facility set up by Union Bank and a US-based genetic research company, 54gene, and the 100-bed facility being set up by another leading Nigerian lender, Guaranty Trust Bank, and there’s about N5 billion coming from the four banks, according to conservative estimates. Other banks are likely to follow suit in the coming weeks.
While wealthy members of the private sector including Dangote, Jim Ovia, Tony Elumelu, Herbert Wigwe, Segun Agbaje, Femi Otedola, and Abdulsamad Rabiu are giving N1 billion each to make N7 billion, oil firms are donating N11 billion, although in partnership with the state-owned NNPC.
Using the 60/40 percent Joint Venture model in place between the NNPC and the oil firms, one can assume that the oil firms are contributing around 40 percent of that donation which will be N4.4 billion.
When the N5 billion from the banks is added to the N7 billion from wealthy individuals and N4.4 billion from oil companies, it gives N16.4 billion.
That’s nearly double the N10 billion the Federal Government approved to fight the virus and the figure is certain to rise in the coming days as more private sector players step up to the plate. If the country’s estimated 40 million businesses gave an average donation of N10,000 each, that will give N400 billion.
The difference in firepower between the Federal Government and the private sector exposes a well-known fact, which is that the private sector is able to outdo the government economically given the latter’s limited resources.
“I hope when this coronavirus scare is out of the way, the government learns a valuable lesson that it cannot boost economic growth without the private sector,” said an independent consultant who has in the past urged the government to tap private capital to fix the country’s gaping infrastructure deficit.
“If the private sector is invited to take part in building the economy with the same level of commitment with which this virus has been taken, the country will do better,” the person said.
Starved of growth drivers (especially private sector investment) and hamstrung by a crippling infrastructural deficit, the Nigerian economy has been wobbling since 2016 when output contracted on the back of the collapse in global crude oil prices and decline in local production.
The economy bounced back from recession in 2017 but has failed to grow above population growth every year since. That has seen growth in average per capita GDP turn up negative since 2015 with the International Monetary Fund (IMF) projecting eight straight years of negative GDP per capita growth.
An easy way out of Nigeria’s growth problem which has been flagged by a motley crew of local and international development experts is to tap private capital, especially at a time when government revenue is nowhere near the days of a $100 per barrel oil price when the government could afford to spend its way out of a downturn.
The current government, led by President Muhammadu Buhari, has resorted to borrowing to attempt to fix Nigeria’s growth problem but that has failed to achieve the desired outcome as economic growth has remained below 3 percent despite doubling the country’s debt stock in under five years and accumulating expensive interest payments.
“There’s a huge chunk of interest-free domestic capital waiting to be tapped but we are not ready,” a senior banker told BusinessDay.
“Take the reckless abandon with which we have treated the Petroleum Industry Bill that’s supposed to unlock billions of dollars in fresh private investments into the country,” the person said. “The message the government keeps sending is that it doesn’t need help from the private sector in driving the economy, never mind the lip service paid. Perhaps the commendable effort of the private sector in fighting the coronavirus pandemic will help change the stance of the government towards private sector when the dust settles.”
In a statement released Friday by Femi Adesina, special adviser to the president on media and publicity, President Buhari saluted “the public-spiritedness of wealthy Nigerians and organisations for standing up to be counted in the battle against the Covid-19 pandemic”.
Nigeria has recorded 65 cases of the Covid-19 virus, including one fatality and three discharged cases, as at Friday, according to the Nigeria Centre for Disease Control (NCDC), the leading national public health institution that has been collating numbers and responding to suspected cases of the virus.
LOLADE AKINMURELE
