Africa has so far escaped the worst health consequences of the COVID-19 pandemic. However, the continent looks like it could be the worst hit from the economic fallout of the crisis: 80 million Africans could be pushed into extreme poverty if action is not taken. And disruptions in food systems raise the prospect of more Africans falling into hunger. Rural people, many of whom work on small-scale farms, are particularly vulnerable to the impacts of the crisis. It is therefore vital that the COVID-19 response addresses food security and target the rural poor.

At this time, the international development agenda is prioritizing health, economies, and infrastructure. But there must also be a focus on food security, agribusiness, and rural development. This is especially important on the African continent. Agriculture contributes 65 percent of Africa’s employment and 75 percent of its domestic trade. However, the rich potential of agriculture as a tool to promote food security and fight poverty is at risk from the effects of COVID-19.

In March, the UN Economic Commission for Africa predicted growth in Africa would drop from 3.2 percent to 1.8 percent in 2020. Within the continent, lockdowns are disrupting inter-regional trade. The effect of restrictive measures on food trade is especially worrying, in particular for food-importing countries, but also because of shrinking export markets for the continent’s farmers.

Across the European Union (the largest export market for Africa’s fresh fruits and vegetables), demand has dropped for popular products such as Kenyan avocados, South African citruses, and Moroccan vegetables. Kenya has also recorded an 8.5 percent decline for tea exports to destinations like Iran, Pakistan, and UAE. Within countries, we are already seeing that interruptions to transport and distribution systems are impeding small-scale farmers from accessing essential inputs – like seeds and fertilizer – and from getting their food to markets.

African governments have defined stimulus measures to mitigate national and regional economic impacts of COVID-19. As they do, they must remember that investments in agriculture can be up to five times more poverty-reducing than investments in other sectors. Investments in rural, small-scale agriculture are particularly important for the region’s food security, for safeguarding the livelihoods of some of its most vulnerable people and for sustaining the gains in poverty alleviation and wealth creation.

Small farms everywhere traditionally make a huge contribution to global food security. Around the world, small-farm dominated systems produce 50 percent of all food calories on 30 percent of the world’s agricultural land. In sub-Saharan Africa, however, the role of small-scale farms is even more significant: 80 percent of farms are small in most of these countries.

Even before the current crisis, globally more than 820 million people were going hungry daily. And the majority of the world’s poor and hungry people live in the rural areas of developing countries. In Africa, reliance on food imports, and lack of services and infrastructure to enable small-scale farmers to produce and market food, along with the shocks of climate change, have all increased the fragility of food access.

In April, the World Bank projected the pandemic would hit Africa the hardest of any region, pushing 23 million people into poverty. This raises the question of how small producers in Africa can get access to inputs and finance to grow and sell the food needed to ensure food security and support livelihoods. African leaders must be in the vanguard of funding solution

In April, the International Fund for Agricultural Development (IFAD launched a multi-donor fund- COVID-19 Rural Poor Stimulus Facility (RPSF) – to address the immediate fallout of COVID-19 for rural people in Africa and elsewhere. IFAD specializes in investing in poor rural people, targeting the poorest and most marginalized. Among other goals, the new facility will provide small-scale farmers and fishers with basic inputs, and help them access markets and maintain cash flow. IFAD committed US$40 million to the new fund but aims to raise at least $200 million more from the UN Member States, foundations, and the private sector.

The Facility will complement and scale-up the work IFAD has already been doing to repurpose existing project activities. In Malawi, for example, a programme is providing social cash transfers to ultra-poor farmers and delivering messages about financial literacy and COVID-19 prevention. In Eritrea, vulnerable households are receiving small ruminants and seeds to strengthen, maintain production, access markets, and safeguard household food security during the crisis.

Agriculture contributes 65 per cent of Africa’s employment and 75 per cent of its domestic trade

These immediate actions are essential to mitigate the worst risks of the crisis. They are also important to safeguard IFAD’s past and ongoing investments to build the long-term resilience of rural livelihoods. Ultimately, we need to ensure that rural people and their businesses are the foundation of resilient rural economies and food systems across Africa. Then, when the next crisis strikes, the vulnerable people of today will be better able to protect their livelihoods and avoid the risk of falling into poverty and hunger.

So while it’s urgent to feed people today, we also must look to the days, months, and years ahead. This is one reason why IFAD prioritizes long-term rural and agricultural development and building resilience to future shocks. It is also why we urge policymakers to adopt any relevant lessons from how previous outbreaks like the Ebola virus affected agriculture and food systems.

In the long term, this pandemic underscores the need for Africa to transform agriculture and agribusiness as the surest path to inclusive economic growth, wealth generation, and greater resilience.

As Special Envoys, we believe in IFAD’s exceptional mandate and will continue to work closely with the Fund in mobilizing resources to support the most vulnerable on the African continent. The pandemic will expose the livelihoods of rural marginalized groups to unprecedented challenges. To restore hope to those affected, we commit strongly to the idea that no one will be left behind, especially in Africa.

Olusegun Obasanjo is the former President of the Federal Republic of Nigeria and Hailemariam Desalegn Boshe, former Prime Minister of the Federal Democratic Republic of Ethiopia

No doubt the emergence of COVID-19 is a global problem that will have a global effect. African countries may, however, end up being disproportionately affected by the deadly virus given that most of these countries entered the pandemic while still battling poor health infrastructures, poverty, corruption, and other challenges. Moreover, the unfair global trade system has perpetually put poor African countries in a cycle of dependence that makes them too weak to combat a pandemic without donor assistance. Unfortunately, many donor countries are also badly hit by COVID-19. Arguably, in the face of uncertain foreign assistance, Africa will need to stand up to the challenge containing the spread of the coronavirus. This is a time to look inward to devise local strategies based on Africa’s everyday reality rather than blindly copying others.

Nigeria is Africa’s most populous country and it has recorded 493 confirmed cases and 17 deaths within 7 weeks the country confirmed its first case. The number of infection appears small, but considering the fact that testing in Nigeria has been few and selective, it is possible that the low figure is unreal, putting Nigeria at a high risk of a major outbreak of the disease. I analyze Nigeria’s vulnerability from an Afrocentric perspective but make propositions that are based on scientific findings. I argue that the medical use of Povidone-Iodine by every high-risk citizen can salvage the country from experiencing an outbreak of the coronavirus.

Rising To the Challenge

To contain the spread of the coronavirus, Nigeria followed the conventional approach by prohibiting large gatherings, banning flights, and the lockdown of major cities. But there are challenges. Nigeria is an oil-dependent economy and the sharp fall in international oil prices, following the pandemic leaves the government with little resources to fight COVID-19. Even though Nigeria should be testing around 5000 to 10000 per day, the country has only expanded its testing capacity to 1,500 per day and this capacity has not been fully utilized. As of March 2020, Nigeria has less than 100 ventilator units and about 350 intensive care units (ICU), 95% of which are currently in use by patients suffering from other health conditions. In other words, Nigeria has less than one ICU bed per one million people. In light of the current situation, Nigeria may not be able to avoid a large number of deaths if the country is hit hard by COVID-19.

The implication and impacts of the lockdown also raise some concerns. In Nigerian cities, the larger percentage of the population live packed together in slums with limited access to clean water and sanitation. In such crowded neighborhoods, ‘stay at home’ mainly creates a form of social gathering where social distancing is impracticable and where diseases can easily spread. The lockdown also means untold hardship to many Nigerians who survive mainly on daily income earned through street businesses. It is not surprising that many people disobeyed the stay- at- home in order to find work or water. Doubtless, for the poor, the fear of hunger is far more than the fear of the coronavirus. Another counterproductive outcome of lockdown is the surge in crime. Enforcing the lockdown has been challenging, sometimes leading to violence, as well as harming and killings of citizens by operatives. It is worth mentioning that the government invested in some food stimulus package for vulnerable families, but this is grossly inadequate and the distribution chaotic. Nigerian experience shows that African countries with crowded slums and large informal sector cannot follow the playbook of total lockdowns like countries in Europe and Asia. Most importantly, it shows African countries must quickly device containing measures appropriate for crowded environments and with minimal impact on the livelihood of the poor.

Looking Inward

No doubt, Nigeria would require extensive financial and technical support from the global community to contain the spread of COVID-19. But since these donor countries are the same ones who have been hard hit by the pandemic, the Nigerian healthcare sector must rise up to this challenge. However, this sector is poorly developed due to several factors. With just 4% of Nigerian budget allocated to healthcare, Nigeria spends less on health than nearly every country in the world and the country also has one of the poorest health outcome indicators.  Nearly 20% of all global maternal deaths happen in Nigeria in 2015 while over 300,000 malaria deaths are recorded annually. The negative impact of western imperialism and globalization on Nigeria’s health sector cannot be underestimated. In 1986, the World Bank recommended that the local production of drugs in developing countries like Nigeria is not realistic which made Nigeria deemphasize local pharmaceutical production. Of course, such selfish recommendations discourage health innovations and make Africa’s healthcare sector perpetually import-dependent.

Nigeria particularly had since become a dumping ground for imported medicines which poses a serious threat to Nigeria’s health security during this pandemic. Access to imported medicines has now been difficult due to current travel bans around the world, while some critical medical supplies are now very scarce due to surge in demand. Unfortunately, any shortage of medical supplies may increase the influx of fake drugs in Nigeria. Currently, falsified chloroquine phosphate 250mg tablets manufactured in China have been found on circulation in Nigeria after it was announced that Chloroquine can be used for the treatment of COVID-19.

The opportunity

Despite the challenges, the COVID-19 pandemic provides an opportunity for reflection, creativity and innovation in healthcare, especially the pharmaceutical industry. Arguably, Nigeria urgently needs low-cost interventions that promise citizens the prevention of contracting COVID-19 even after the lockdown has been removed. It is for this reason I propose the medical use of Povidone-Iodine (PVP-I) solutions for the prevention and treatment of COVID-19 in Nigeria. There are hundreds of old and recent scientific studies confirming the efficacy of PVP-I against infectious diseases and viruses. Such findings are particularly useful for a poor country like Nigeria, which has a limited budget for research and development.

Povidone-Iodine (PVP-I) Against Coronavirus

Povidone-iodine (PVP-I) is an antiseptic used for treatment and prevention of infection in cuts, burns, and wounds as well as in surgical operating theatres. PVP-I formulations are usually at concentrations of 7.5–10.0% in solution, oral gargle, nasal and throat sprays, surgical scrub, ointment, and swabs. The efficacy of PVP-I as an antiviral agent is particularly important for the prevention of COVID-19 for clear reasons. Coronavirus disease is a respiratory virus that spreads when mucus or droplets containing the virus get into the body through eyes, nose, or throat. This spread often occurs through the hand and that is why handwashing with soap and the use of alcohol-based sanitizers are recommended. However, scientific evidence (Eggers et al 2015) shows that PVP-I hand wash and hand rub products are more effective in terms of viral reduction than alcoholic and non-alcoholic sanitizers, as well as antimicrobial soaps.

High frequency of mouth and nose touching has implications for transmission of infection. A study on face-touching behavior shows that on average, each observed student touched their face (including their mouth, nose, and eyes) 23 times per hour. Moreover, evidence shows that COVID-19 also called SARS-CoV-2 can be inhaled through the nose into the throat. Unfortunately, after coronavirus has gotten into the eyes, the nose or mouth of any individual, hand washing, or the use of sanitizer may be unhelpful. Medical experts suggest that recognizing the cells hosting viral entry and permitting viral replication is important to improve diagnoses and treatment of the novel coronavirus. Several studies (such as To et al, 2020 and Xu et al, 2020) aim at understanding viral load, (that is, the number of virus particles being carried by an infected person) found a high viral load in saliva at the early stage of COVID-19. Recently, Lescure et al (2020 preprint) also confirm that at an early stage of SARS-COV-2 infection, high viral loads were found in the upper respiratory tract samples. Sungnak et al (2020) report that higher viral loads can be observed in nasal swabs compared to those obtained from the throat.

These reports indicate that there is a high risk of transmission of the novel coronavirus during the very first days of symptoms. Anfinrud et al (2020, preprint) suggest that tiny droplets of saliva released while speaking can spread COVID-19. Sungnak et al (2020, preprint) particularly suggest that the nasal epithelium is an important portal for initial infection, and may serve as a key reservoir for viral spread across the respiratory mucosa and an important locus mediating viral transmission. Arguably, the early application of a potent antiviral agent to the mouth, nose and upper respiratory tract may be able to prevent the transmission of the disease. PVP–I solutions especially oral gargle, nasal and throat sprays may be useful for this purpose. Given the proven in vitro efficacy of PVP-I, early use of PVP-I based nasal spray and gargle mouth wash may significantly reduce viral load at the nose, mouth, and in the upper respiratory tract of an infected person thereby reducing the risk of transmission.  This proposition is supported by Eggers et al (2015) which tested the in vitro efficacy of 4% PVP-I; skin cleanser, 7.5% PVP-I surgical scrub, and 1% PVP-I gargle/mouthwash against coronavirus (MERS-CoV) and Modified Vaccinia Virus Ankara (MVA). Their results show that each PVP-I-based product substantially reduced by ≥99.99% virus particles in contaminated skin, in the oral cavity and the oropharynx within 15 seconds of application.

Experts also opined that with respiratory viruses like coronaviruses, the outcome of infection can sometimes be determined by how much virus actually got into the body and started the infection off, so that getting infected with fewer virus particles will likely cause less severe illness. Higher initial viral load are however associated with death (Chu et al, 2004). Given the efficacy of PVP-I to reduce viral load, the use of PVP-I products may likely reduce the severity of disease thereby reducing mortality. Early detection of Covid-19 infection and treatment with an antiviral agent may also hold some benefits because despite high viral loads found in the mouth and upper respiratory tract at the onset of disease, in many cases, at that time, the virus has not marched down to attack the lungs and other vital organs. For example, Xu et al (2020) report a high expression level of SARS-CoV RNA in saliva specimens of observed patients, some of whom had not yet lung lesion, suggesting the value of early diagnosis of saliva, similarly to SARS-CoV-2 or COVID-19. They also reported an animal study on early events of SARS-CoV infection which showed that SARS-CoV was detected in oral swabs before blood test turned positive on the second day after viral challenge through the nasal cavity.

Recommendation for poor countries

Foremost, this study offers many opportunities for further studies on the applicability of PVP-I against COVID-19. Recently Kirk-Bayley et al (2020, draft) have recommended for the United Kingdom, the immediate and nation-wide use of PVP-I in healthcare workers and their patients because of the observed high risk of transmission of COVID-19 in UK hospitals. Nigeria is currently at a high risk of experiencing an explosion of COVID-19 beyond the capacity of its weak healthcare system. To avoid this looming disaster and in the absence of a vaccine, I believe the regular use of PVP-I nasal spray, mouth wash, and skin cleanser should be encouraged among the populace in addition to social distance practice. This will surely reduce cross infection and severity of COVID-19 cases. Moreover, PVP-I has an excellent safety and tolerability profile and it is also available over the counter. Unlike other antiseptics, significant resistance or cross-resistance has not been observed for PVP-I.

However, Nigeria’s health authorities should quickly facilitate necessary research and clinical trials to aid the implementation of PVP-I as a measure to contain the spread COVID-19 in Nigeria. There are very few commercially available iodine-based nasal sprays and gargle/ mouth wash in the country. The facilitation of their local production and wide distribution should be a major direction of health policy. Local production of the products will also create large scale employment thereby resuscitating a seemingly comatose pharmaceutical sector.

Note: The opinions expressed in this article are of the authors and not of her current employer.

Dr. Oyindamola Adejumo-Ayibiowu has 18 years’ experience in development research and economic management. She is a graduate of Economics, Obafemi Awolowo University (OAU), ile-ife, Master’s degree in Poverty Reduction and Development Management (International), University of Birmingham, UK, and Ph.D. Development studies, University of South Africa, Pretoria. Her professional experiences include the Central Bank of Nigeria, UNDP, EU, World Bank, AGRA, and IFAD. She currently works with the Federal Inland Revenue Service.

As many people are now aware, the outbreak of the Novel Coronavirus Disease (COVID-19) in China has rapidly permeated and profoundly changed the world. While this crisis is first and foremost a public health issue, which has claimed the lives of over 123,600 people worldwide, and counting, the economic damages are unprecedented on several fronts: crude oil prices have declined dramatically to as low as US$17 per barrel by the end of March, even before applying the discounts many oil exporters are offering; stock valuations for the NSE-ASI, Nikkei, Dow Jones and FTSE-100 have declined by an average of 23.8 percent between January and March 2020; global airlines have lost about US$252 billion in revenues and across the broad range of industries from hospitality to services, the pain is growing. These outcomes have expectedly thrown the global economy into a recession, the depth and duration of which is currently difficult to fathom. In fact, the International Monetary Fund (IMF) predicts that the global economy would decline by 3 percent this year.

Around the world, countries have moved away from multilateralism and responded by fighting for themselves with several measures to protect their own people and economies, regardless of the spillover effects on the rest of the world. According to the World Customs Organization, a total of 32 countries and territories, adopted stringent and immediate export restrictions (https://bit.ly/34EmqxW) on critical medical supplies and drugs that were specifically meant to respond to COVID-19. As of 10 April 2020, an updated count of total export restrictions by the Global Trade Alert Team (https://bit.ly/3bd9AJh) at the University of St. Gallen, Switzerland suggest a total of 102 restrictions by 75 countries (https://bit.ly/2V7sHih).

On 4 March 2020, Germany announced an export ban that applied to all sorts of medical protection gear including breathing masks, medical gloves and protective suits. Around the same time, President Macron announced that France will requisition all face masks produced in the country, a de facto export ban. Between 8 February 2020 and 6 April 2020, India released eight (8) different export notifications banning several drugs and medical supplies including hydroxychloroquine, ventilators, personal protections masks, oxygen therapy apparatus, and breathing devices. On 3 April 2020, the Trump Administration invoked the war-era US Defense Production Act to stop major US mask manufacturer, 3M, from export of respirator masks, N95, to Canada and Latin America.

Also Read: Opinion: The pandemic is no time for fiscal distancing | By: Akinwumi Adesina

Fears of a long global recession have also led to worries about unprecedented global food insecurity, with concerns that agricultural production may be dislocated by containment measures that constrain workers from planting, managing and harvesting critical crops. Rather than seek cooperative and global solutions, several countries have resorted to export restrictions of critical agricultural produce.

According to the International Food Policy Research Institute (IFPRI), about 37 countries have enacted various forms of food export restrictions in response to COVID-19, even in countries where average production exceeds domestic consumption.

For example, Viet Nam, the world’s third largest exporter of rice, suspended granting rice export certificates until the country “reviews domestic inventories”. Russia, the world’s largest wheat exporter, announced a ten-day ban on the export of buckwheat and rice due to concerns over panic buying in local supermarkets.

What if these restrictions become the new normal? What if the COVID-19 pandemic continues in a second wave or another pandemic occurs in which all borders are shut, and food imports are significantly restricted? What if we cannot seek medical care outside Nigeria and must rely on local hospitals and medical professionals? For how long shall we continue to rely on the world for anything and everything at every time?

Although these developments are troubling, they present a clear opportunity to re-echo a persistent message the CBN has been sending for a long time, and at this time even more urgently so: we must look inwards as a nation and guarantee food security, high quality and affordable healthcare, and cutting-edge education for our people.

For a country of over 200 million people, and projected to be about 450 million in a few decades, we can no longer ignore repeated warnings about the dangers that lie ahead if we do not begin to depend largely on what we produce locally, because the security and well-being of our nation is contingent on building a well-diversified and inclusive productive economy.

When I became Governor of the Central Bank in June 2014, imports of rice, fish, wheat and sugar alone consumed about N1.3 trillion worth of foreign exchange from the Bank. The immediate question that came to my mind was: can we not grow these ourselves? After all, only a few decades ago, Nigeria was one of the world’s largest producers and exporters of palm oil, cocoa and groundnuts.
Today, we import nearly 600,000 metric tonnes of palm oil, whilst Indonesia and Malaysia, two countries that were far behind us in this crop, now combine to export over 90 percent of global demand. In 2017, Indonesia earned US$12.6 billion from its oil and gas sector but US$18.4 billion in from palm oil. I believe that this pandemic and the immediate response of many of our trading partners suggest it is now more critical than ever that we take back control, not just control over our economy, but also of our destiny and our future.

In line with the vision of President Muhammadu Buhari, the CBN has indeed created several lending programmes and provided hundreds of billions to smallholder farmers and industrial processors in several key agricultural produce.

These policies are aimed at positioning Nigeria to become a self-sufficient food producer, creating millions of jobs, supplying key markets across the country and dampening the effects of exchange rate movements on local prices.

This philosophy has been a consistent theme of the CBN’s policies over the last couple of years. At the 2016 Annual Bankers’ Dinner, I challenged the bankers that we needed to take decisive actions to fundamentally transform the structure of our economy. Throughout that speech, I talked about the damaging effects of Nigeria’s unsustainable propensity to import, and opined that it was high time we looked inwards and stopped using hard-earned foreign exchange (FX) to import items that we could produce locally.

This determination, therefore, formed the bedrock of the Bank’s policy, which restricts access to FX for importers of many items. These sentiments were re-echoed at the 2017 edition of the same Bankers’ Dinner, with specific examples of several companies that have benefited significantly from this policy of self-sufficiency. With President Buhari’s full support, we have continued to refine this policy to ensure that the best interest of Nigeria is served.

Many times, the Bank has been accused of promoting protectionist policies. My answer has always been that leaders are first and foremost accountable to their own citizens. And if the vagaries of international trade threaten their wellbeing, leaders have to react by compelling some change in patterns of trade to the greater good of their citizens.

That is why in response to COVID-19, we are strengthening the Nigerian economy by providing a combined stimulus package of about N3.5 trillion in targeted measures to households, businesses, manufacturers and healthcare providers. These measures are deliberately designed to both support the Federal Government’s immediate fight against COVID-19, but also to build a more resilient, more self-reliant Nigerian economy.

We do not know what the world will look like after this pandemic. Countries may continue to look inwards and globalization as we know it today may be dead for a generation.

Therefore, as a nation, we cannot afford to continue relying on the world for our food, education and healthcare. The time has come to fully transform Nigeria into a modern, sophisticated and inclusive economy that is self-sufficient, rewards the hardworking, but protects the poor and vulnerable, and can compete internationally across a range of strategic sectors.

In order to achieve this goal, we must begin immediately to support the Federal Government to:

1) Build a base of high quality infrastructure, including reliable power, that can engender industrial activity;

2) Support both smallholder and large scale agriculture production in select staple and cash crops;

3) Create an ecosystem of factories, storages, and logistics companies that move raw materials to factories and finished goods to markets;

4) Use our fiscal priorities to create a robust educational system that enables critical thinking and creativity, which would better prepare our children for the world of tomorrow;

5) Develop a healthcare system that is trusted to keep all Nigerians healthy, irrespective of social class;

6) Facilitate access to cheap and long-term credit for SMEs and large corporates;

7) Develop and strengthen pro-poor policies that bring financial services and security to the poor and the vulnerable; and

8) Expedite the development of venture capitalists for nurturing new ideas and engendering Nigerian businesses to compete globally.

India is in a position to ban exports because it is producing critical drugs and medical supplies that the rest of the world needs. It also has companies that are global champions, and even making mergers and acquisitions in advanced nations. Why should this be out of our reach? We have the companies too; we have the manpower and some of the best brains in the world from the Americas to Europe and from Asia to Africa are Nigerians; driving global innovations in all fields. Nigerians are successful everywhere, and are already one of the most sought after immigrant groups in the United States.
But now is the time to seize this opportunity and create an environment that empowers our people to thrive within our own shores.

To this end, the Central Bank has developed a Policy Response Timeline to guide our crises management and the orderly reboot of the Nigerian economy.

Immediate-Term Policies (0-3 Months):

In light of the fact that this crisis is an exogenous one thrust upon us without much warning, this phase reflects the government’s efforts at containment and mitigation. Although global cases are heading towards two million with over 123, 600 deaths as of 14 April 2020, we now have 343 cases, of which 10 deaths and 91 recoveries have been recorded.

With President Buhari’s continuing strong leadership, Nigeria can now test 1500 persons per day in twelve (12) Molecular Test Laboratories. We believe that this strong leadership in travel restrictions, lockdown, social distancing, and other measures have been greatly effective to curbing the spread of the disease. More so, the Presidential Task Force and Nigeria Centre for Disease Control (NCDC) have helped the country stay ahead of the curve with increased testing capacity, provision of better-equipped isolation centres, and effective contact tracing. Within this milieu, the CBN has responded in several ways, first by supporting hospitals and pharmaceutical industry with low interest loans to immediately deal with the public health crises; then by working with the private sector Coalition Against COVID (CACOVID) to support the Presidential Task Force across its response, while mobilizing palliatives for the poor and vulnerable.

Under this Immediate-Term Response, we have activated the following:

1) Ensuring financial system stability by granting regulatory forbearance to banks to restructure terms of facilities in affected sectors;

2) Triggering banks and other financial institutions to roll-out business continuity processes to ensure that banking services are delivered in a safe social-distance regime for all customers and bankers;

3) Granting additional moratorium of 1 year on CBN intervention facilities;

4) Reducing interest rates on intervention facilities from 9 percent to 5 percent;

5) Creation of N50 billion targeted credit facility for affected households & SMEs;

6) Strengthening the Loan-Deposit Ratio (LDR) policy, which is encouraging significant extra lending from banks;

7) Improving FX supply to the CBN by directing all oil companies (international and domestic) and all related companies (oil service) to sell FX to CBN and no longer to the NNPC;

8) Providing additional N100b intervention in healthcare loans to pharmaceutical companies, healthcare practitioners intending to expand/build capacity;

9) providing N1 trillion in loans to boost local manufacturing and production across critical sectors; and

10) Engendering financial inclusion by ensuring the poor and vulnerable are able, by all means necessary, through banks, microfinance, community and non-bank financial institutions, to access financial services to meet their basic needs.

Short-Term Policy Priorities (0 – 12 months):

As soon as President Muhammadu Buhari and the Health authorities determine our Coronavirus Transmission Curve is flattening and many of the ongoing restrictions are eased, this will be the phase for repositioning the Nigerian economic space. As part of the lessons from the current pandemic, we must ensure that that our value-added sector, the manufacturing industry is strengthened. Accordingly, the CBN will pursue the following policies in this phase:

1) Reinvigorate our financial support for the manufacturing sector by expanding the intervention all through its value-chain. In most cases, we will ensure that primary products sourced locally provide essential raw material for the manufacturing sector except where they are only available overseas;

2) With the support of the Federal Government, the CBN will embark on a project to get banks and private equity firms to finance homegrown and sustainable healthcare services that will help to reverse medical tourism out of Nigeria. By offering long-term financing for the entire healthcare value-chain (including medicine, pharmaceuticals, and critical care), banks will work with healthcare providers to consolidate on the current efforts to rebuild our medical facilities in order to ensure Nigeria has world class affordable hospitals for the people of Nigeria and those wishing to visit Nigeria for treatment;

3) The CBN will promote the establishment of InfraCo PLC, a world class infrastructure development vehicle, wholly focused on Nigeria, with combined debt and equity take-off capital of N15 trillion, and managed by an independent infrastructure fund manager. This fund will be utilized to support the Federal Government in building the transport infrastructure required to move agriculture products to processors, raw materials to factories, and finished goods to markets, as envisaged at the CBN Going for Growth Roundtable in March 2020; and 4) Continue to prioritize the provision of FX for the importation of machinery and critical raw materials needed to drive a self-sufficient Nigerian economy.

Medium-Term Policy Priorities (0 -3 Years):

Once the world returns to some new normal having tamed COVID-19 by a combination of vaccines and social distancing, and the Nigerian economy reopens fully for business, we will act quickly to enable faster recovery of the economy by targeted measures towards particular sectors that are able to support mass employment and wealth creation in the country. We will do so by focusing on four main areas, namely, light manufacturing, affordable housing, renewable energy, and cutting-edge research.

In manufacturing, for example, it is pertinent to note that Nigeria’s gross fixed capital formation is currently estimated at N24.55 trillion made up residential and non-residential properties, machinery and equipment, transport equipment, land improvement, research and development, and breeding stocks. Of this estimated value, machinery and equipment, which are the main inputs into economic production, are currently valued at only N2.61 trillion. In order to pursue a substantial economic renewal, including replacement of at least 25 percent of the existing machinery and equipment for enhanced local production, we estimate at least N662 billion worth of investments to acquire hi-tech machinery and equipment.

Therefore, the CBN will consider an initial intervention of N500 billion over the medium term, specifically targeted at manufacturing firms to procure state-of-the-art machinery and equipment and automated manufacturing models that would fast-track local production and economic rejuvenation, as well as support increased patronage of locally processed products such as cement, steel, iron rods, and doors, amongst several other products. The recent private sector investments in cement production using enhanced technology and automated manufacturing models is a good example of the kind of economic renewal we will be pursuing in this phase. We will develop a thorough screening process and stringent criteria for equipment types that would qualify for funding under this phase.

In order to boost job creation, household incomes and economic growth, we will be focusing our attention to bridging the housing deficit in the country, by facilitating government intervention in three critical areas: housing development, mortgage finance, and institutional capacity.

We will pursue the creation of a fund that will target housing construction for developers that provide evidence of profiled off-takers with financial capacity to repay. The current identification framework in the banking sector using the bank verification number (BVN) will be used to verify the information provided by the off-takers before the developer can access the funds. We will also be considering ways to assist the Mortgage Finance Sub-sector as well as build capacity at the State levels for their land administration agencies to process and issue land titles promptly, implement investment friendly foreclosure laws and reduce the cost of land documentation, as this has remained a major inhibiting factor in the provision of affordable housing in the country.

Over the next 3 years, we will also support the financing of environmentally friendly energy production, as this has a tangential long-term health benefits. We will look at efforts to drive innovation and research in every sector, through our universities, research institutions, creative industry initiatives, and all other media of novelty and inventions.

In conclusion, I believe we must now envision and work toward a Nigeria with the cutting edge medical facilities to provide world class care to the sick and vulnerable; enable our universities and research institutions to provide the requisite education and training that is required to keep these ecosystems functioning sustainably and efficiently; and millions of Nigerians employed in meaningful and well-paying jobs. This is the Nigeria that we must aspire to build.

COVID-19 may have plunged us into a crisis of unprecedented proportions. But, as Winston Churchill once admonished, we must never let a crisis go to waste.

SOURCE: The Central Bank Of Nigeria

-Godwin I. Emefiele, CON is Governor of the Central Bank of Nigeria