BusinessDay

COVID-19: Lack of social protection escalates welfare losses in Nigeria

 

The lack of social protection during the peak of the coronavirus pandemic in Africa’s biggest economy has exposed many Nigerian households to increased welfare losses.

Data from the National Social Safety Net Project (NASSP), between March 2020 and March 2021, shows that only four percent of households in Nigeria received support in the form of cash from the federal, state, or local government.

This is significantly below what would be needed to counteract the widening and deepening poverty rate in Africa’s most populous country, which is escalated by the virus outbreak.

Before the pandemic struck, less than two percent of Nigerian households enrolled in the country’s flagship social protection programme.

Coverage of social protection programmes remained low throughout the COVID-19 crisis.

Experts disclosed that many of the primary effects of the COVID-19 crisis on Nigeria have been economic, rather than health-related.

The early part of the COVID-19 crisis ushered in Nigeria’s deepest recession since the 1980s, with services and industry hit especially hard.

By disrupting markets, experts say, the crisis exacerbated pre-existing structural distortions including trade restrictions, such as the 2019 border closure which were already driving up prices and eroding purchasing power, even before the pandemic struck.

Aside from this, the price of oil which represents more than 80 percent of Nigeria’s exports and over 70 percent of government revenues tumbled more than 60 percent between February and May 2020, Nigerian National Bureau of Statistics (NBS) and World Bank estimates.

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While health indicators and macroeconomic data are essential for addressing the fundamentals of the COVID-19 crisis, countervailing policies need detailed information on the mechanisms through which the pandemic affects human capital, livelihoods, and welfare.

This is especially important in Nigeria because the pandemic threatens to compound the country’s high levels of poverty: even before COVID-19, around 4 in 10 Nigerians lived below the national poverty line, and multidimensional poverty was even more widespread.

Unsurprisingly, food insecurity increased when the COVID-19 crisis hit. In April/May 2020, at least one adult had skipped a meal (in the previous 30 days) in almost three-quarters of Nigerian households. This share had dropped to about 56 percent by November 2020 but was still significantly higher than what was observed prior to the pandemic.

The negative coping strategies threaten the welfare of Nigerians today and have implications for the future.

Food insecurity may have long-run consequences for human capital, as child stunting in Nigeria was widespread even before the pandemic.

And malnutrition, they explained, can weaken children’s capacity for learning. Alongside other immediate priorities for Nigeria, such as rolling out vaccines and recouping learning losses, scaling up social protection including using innovative techniques to reach the poor remains crucial for alleviating the effects of the COVID-19 crisis in the short, medium, and long run.

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