Nigeria's leading finance and market intelligence news report.

COVID-19 and the bazaar of corporate cash: An agenda for corporate Nigeria 

As the pandemic spreads over the world like wildfire, the effect continues to paralyse activities across our country Nigeria through its mass adoption of imported solutions – lockdown, border closures. Efforts are underway in all facets of humanity to curtail the scourge of the pandemic. How well our fragile economy will respond to the twin bombs of COVID-19 and the apocalypse of oil price is unimaginable.

The response of governments has been fairly commendable, but the effort of the organised private sector is overwhelming. In Nigeria, as of April 1st (not an April fool joke), the newly birthed Coalition Against COVID-19 (CACOVID) has realised the sum of N19 billion (about $47.5 million) – confirmed redeemed pledges. Superlative response!

Recently, the Minister of Finance put forward a proposal of a N500 billion intervention fund for the upgrade of medical facilities across the country. One can only imagine the fate of all the capital expenditure that has been budgeted to this critical sector over the years. A quick review shows the capital expenditure provision of the federal government over the last three years: 2018 (N71 billion), 2019 (N50.15 billion), and 2020 (N46 billionn).

Unfortunately, the country has budgeted below the WHO benchmark, 13 percent of the annual budget to be allocated to healthcare. It has also budgeted far below the Abuja Declaration of 2001 under which African leaders agreed to commit 15 percent of their annual budget to improve the healthcare sector. The same situations abound in the sub-national governments with over 70 percent of the sector budget expended on recurrent expenditure.

Whilst the sector has suffered from massive under-budgeting, the amounts allocated have not been prudently utilised as exemplified by the abysmal quality of our healthcare infrastructure.

Little wonder a notable “His Excellency” in one of the states commissioned with pomp and pageantry a world-class, first of its kind state-of-the-art hospital in his state but unfortunately, upon a minor accident was flown abroad for treatment. What happened to the state-of-the-art hospital rather “abattoir’? George Orwell remarked that some animals are more equal than others. One of my good friends’ critique of my last article was my inability to rebuke the government in strong terms, I had retorted, “I write about the living and not the dead”.

Evidently, the government has relegated this sector through under-provision of resources, massive corruption, politicisation of healthcare, mediocre policies, poorly built and maintained infrastructure, and the dearth of modern equipment. The effect has been the massive brain drain of our medical personnel. According to them it is perpetually frustrating to practice the profession in Nigeria where you witness children and adults die daily due to lack of ordinary oxygen or patients are compelled to purchase medical disposables for their examination and treatment.

The doctor to patient ratio is still around 2500:1. The scale of this problem has unfortunately become too gargantuan and a Sisyphean task for the government to resolve. An African proverb says, “One person does not hear the sound of the gun”. We are therefore condemned to seek the intervention of the private sector.

But these corporates pay their statutory taxes and levies to the various tiers of government in addition to the onerous operating environment. Hence, they have no obligation to further take up these existential roles of government. Incidentally, recent events have reaffirmed the old labour slogan, “An injury to one is an injury to all”. Our government has failed and whereas we continue to demand accountability from them, we need to pick up the gauntlet and make hay while the sun shines. We can no longer stand and gaze or sit and look.

The private sector has not only shown expertise in the management of their various firms but has demonstrated elegant competence in rescuing the government in its core and critical functions – education, security and public infrastructure. Several corporates have provided equipment to the security agencies, built a couple of facilities/research centres for various educational institutions, and even rehabilitated roads and other public amenities.

But the question beckons, what has been the fate of these facilities long after being handed over to the authorities? Is there a mechanism for a post-handover review of these projects to ensure the retention of standards? How well have they met the objective over time? We can wildly conclude that most of them have been mismanaged shortly after handover. Corporates need to review their existing model of Corporate Social Responsibility (CSR) to build sustainable institutions.

My call is for business leaders to press the reset button and review their fanfare, advert-based, “photo/social media charity” CSR models/programmes. Several examples abound of where corporates have adopted a self-sustaining approach to build, operate, and manage. This model has been adopted by the international oil companies (IOCs) to bring relative peace in the Niger Delta region. They (IOCs) have succeeded in building several facilities jointly owned and managed with the host community with economic and social benefits.

Available data also shows that the Dangote Foundation has constructed faculty buildings across several universities in the country amongst other projects. The current road reconstruction undertaken by Access Bank around the Oniru axis, the Zenith Bank reconstruction, and maintenance of the Ajose Adeogun Road all in Victoria Island are handy examples among others.

A spectacularly adorned Ajose Adeogun has become one of our foremost tourist destinations during Christmas. It was even a highlight of the visit of the popular American rapper Belcalis Marlenis Almanzar professionally known as Cardi B during her maiden concert in the country last December. These private sector-led projects have obviously been outstanding.

The corporates led by the banks need to mine the pool of data wasting in their bases. As banks begin to append their signatures to UN sustainable banking principles, they need to thoroughly review their portfolio. In line with the WHO and UN guidelines for countries to provide a certain minimum percentage of their budget to the critical sectors.

Banks should ensure that a reasonable portion of their loan books is available to the healthcare sector. They should not only provide funding but ensure that those firms survive through healthy business partnerships and fair pricing. I can vividly remember a top executive that frowns at any request to support local pharmaceutical companies. The claim is that they produce poisons (technically drugs are poisons), how many of us can afford the imported brands?

Banks also need to fortify their risk management with experienced healthcare professionals to guide them on financing for the healthcare sector. It cannot be guessed work or general knowledge as the partnership is expected to be long term and not solely profit first. As expected, every business should have public health professionals in their human resource management for prompt advisory services.

According to the Federal Ministry of Health, our annual expense on medical tourism is in excess of $1 billion. I am also aware that a bulk of test kits being purchased by the private sector is imported. This further strain the epileptic foreign exchange reserve of the country. Corporates should extend their coalition post-COVID towards the development of smart “health/medical cities” to curb medical tourism and conserve our scarce foreign exchange. These medical hubs will have at least one standard (world-class) tertiary and secondary healthcare facility with the attendant ancillary services.

The creation of these “medical cities” funded by the corporates will not only generate thousands of jobs employed by small and medium size organisations they will provide the needed support for a medical ecosystem of global standards.

Imagine standard hospitals across the country built and managed by special purpose vehicles (SPV) and funded by corporates and foundations carrying out several advanced medical procedures as well as medical research and training. These facilities will be centres of healthcare excellence.

Partnerships with public health institutions like the National Centre Disease Control, Nigeria Institute of Medical Research and other agencies should be strengthened for effective disease surveillance. Prevention they say is better (and cheaper) than cure. Such partnerships should be extended to the army of indigenous innovative healthcare start-ups.

The health insurance sector of the economy will require fresh investment. As of 2017, only 3 percent of healthcare expenditure in Nigeria was paid for using health insurance. This provides an opportunity to explore the untapped potential of the sector.

A stitch in time saves nine! Stay safe and observe all the guidelines as we assiduously wait and work to overcome this challenge.


Chijioke Uzosike

Chijioke, a banker and financial services consultant, writes from Lagos


Get real time updates directly on you device, subscribe now.