Nigeria’s COVID-19 cases surge as oil price slump deepens social crisis

By Stephan McCoy
7 July 2020

Nigeria, Africa’s most populous country, has seen a surge in coronavirus infections with Lagos becoming the epicentre of the virus, recording 11,045 cases. As of July 5, the country had recorded nearly 29,000 confirmed cases and 635 deaths, a more than sixfold increase following the government’s reopening of the economy at the end of March, just a few weeks after imposing a lockdown.

The state governor of Lagos, Babajide Sanwo-Olu, sought to provide false hope, stating that “90 percent” of COVID-19 cases would go on to recover, a claim refuted by the fact that active cases (16,017) remain significantly higher than recovered cases (11,562) in the country—and similar world statistics.

This has forced the governor to reconsider the reopening of churches and mosques. Sanwo-Olu said the government had “concluded that we cannot proceed with any form of reopening for places of worship until further notice.” He also postponed the reopening of schools until August 3, saying that, as Lagos was the “epicentre of the coronavirus pandemic in Nigeria, with about 44 percent of the total number of confirmed cases nationwide,” schools would not immediately reopen.

Nevertheless, the government remains fully committed to lifting all lockdown measures. Aviation Minister Hadi Sirika announced that airports would begin reopening on July 8. Flights between Nigeria’s two most populous cities, the capital Abuja and Lagos, will resume first. Airports in Port Harcourt, Owerri, Maiduguri and Kano will reopen on July 11. Domestic flights in other parts of the country will resume on July 15.

But, he said, “Passengers looking to travel out of the country will have to wait a bit longer as the dates for the restart of international flights into and out of the country will be announced later.”

The reopening of the economy, despite warnings from medical and other health care experts, comes amid a collapse in the price of oil. Nigeria’s main export used to provide about 90 percent of foreign exchange earnings and 80 percent of government revenues. This was reduced to 50 percent last year, compounding the country’s already weak economy.

The Nigerian National Petroleum Corporation (NNPC) has opened its books—publishing its 2018 annual report for the first time in its 43-year history—in a bid to prevent its breakup and to attract investment as oil prices slump and revenues are predicted to fall by 80 percent, with the shift away from fossil fuels and the impact of the pandemic. The company, a joint venture between the federal government and the transnational oil companies, including Royal Dutch Shell, Agip, ExxonMobil, Total S.A. and Chevron, which in practice control it, holds outright leases on most of the country’s oil reserves. It has been mired in allegations of corruption.

In March, the government responded to falling oil prices by slashing petrol subsidies, fuelling mass opposition to wider budget cuts. The government has also announced plans to cut health care spending at a time when the system is already under acute strain due to the pandemic. Funding for local, primary health care services is to be cut by more than 40 percent this year, affecting immunisations, child care, maternal health care, and family planning services.

The International Monetary Fund (IMF), which agreed to a $3.4 billion loan, half of the $7 billion requested, predicts that the Nigerian economy will contract by 3.4 percent. The naira has fallen steeply against the dollar, with the Nigerian Central Bank devaluing the currency by 5.3 percent, now trading at 380 naira per US dollar. Last March, it had devalued the currency from 307 to 360 to the dollar. Last month, the bank announced plans to unify its multiple exchange rates, which the IMF has long called for. The naira also trades widely on the black market and is sold to companies and individuals at varying rates.

The $3.4 billion IMF loan increased government debt by 15 percent to $79.5 billion compared with $69 billion in 2019. According to the Debt Management Office, this is made up of $28 billion in external debt and $52 billion domestic debt and is unsustainable. According to Nairametrics, the government spent 99.2 percent of its first-quarter revenues this year on debt servicing. The country’s global rating is at risk of being downgraded, as its debt to revenue ratio rises to 538 percent, up from 348 percent last year.

The travel bans, lockdown and social distancing restrictions on day labourers and trading have led to a steep rise in the price of goods and services. Inflation, which stands at more than 12 percent, the highest in two years, is impacting heavily on the 87 million Nigerians living in extreme poverty. Food inflation has risen to 15 percent, particularly for such basics as bread and cereals, potatoes, yam, and other tubers, oils and fats, fruits, fish, and meat. Pharmaceutical products, medical services, hospital services and passenger transport have also seen steep price increases.

The economic crisis and worsening situation have provoked opposition in the working class, particularly among public sector and health care workers. In the Cross Rivers state, civil servants went on strike on June 29, despite opposition from the Trade Union Congress (TUC). The workers demanded retirees be paid benefits dating back to 2014, the implementation of promised promotions, rescinding the deletion of genuine employees from the payroll and the immediate addition to the payroll of 2,000 employees recruited in 2018 who have not been paid. Despite threats from the government, backed up by the TUC, workers did not show up to work.

Doctors at the University Teaching Hospital in the Niger Delta Bayelsa State have also been on strike, demanding an end to the disparity in earnings between doctors working in federal and state-owned health institutions, enhanced hazard allowances, upgraded equipment and action to end staff shortages.

In Ondo state, nurses and doctors at the University of Medical Sciences Teaching Hospital Complexes in Akure began indefinite strike action June 24 over a lack of personal protective equipment (PPE) and the non-payment of wages. National Association of Nigerian Nurses and Midwives members are also demanding PPE. In Lagos, doctors are planning to go on a three-day strike on July 13 over a lack of PPE, no pay and training.

Nigeria faces unrest and conflicts in several regions. The decade-long insurgency by jihadists in the largely Muslim northeastern states has killed thousands and displaced more than 2 million. It has created a massive humanitarian emergency and spread to neighbouring Cameroon, Chad, and Niger, and is deepening the crisis. In the last month, there have been attacks in Borno state killing at least 100 people, including 20 soldiers, and injuring hundreds more.

President Muhammadu Buhari issued a sharp criticism of his top security chiefs for their failure to contain the jihadists—Boko Haram and Islamic State West Africa Province (ISWAP)—which are themselves riven with conflicts and supported by other jihadist organisations such as al-Qaeda and Al-Shabaab. The brutality with which the security forces have suppressed the insurgents has worsened the plight of civilians in the region and prompted the rise of civilian vigilante self-defence groups.

The country has seen an upsurge in violence between herders and farming communities spreading from the central and northwestern provinces southward with militant Islamist forces in the northeast, over dwindling resources in a region whose fertility has been drastically affected by climate change. This is in addition to the long-running discontent and militancy in the Niger Delta, the oil-producing region.