Alone among the leaders of Africa’s big economies, President Muhammadu Buhari attended the UN General Assembly in person, in the week starting 19 September. It was Nigeria’s opening shot in a sequence of economic and political summits taking place between now and the UN Climate Change Conference (COP26) in Glasgow in November.

Driven by the country’s growing economic, security, and demographic woes, the Buhari government is steering a strategy to secure better public and private funding for its ‘bounce back’ plans after the pandemic.

President Muhammadu Buhari at the UN General Assembly

Although it has just raised US$4 billion on the Eurobond market and is set to receive around US$3 billion as its share of an IMF extraordinary issue of US$650 billion in special drawing rights (SDRs), Nigeria is struggling to balance the books.

The Federal Government is almost six months in arrears in allocations to the 36 state governments which means that obligations such as wages and contractors bills are also being held up. Just as bad, various big capital projects — such as new road networks, ports, and power stations — have been put on hold.

Most directly, living standards for many of Nigeria’s 210 million people are falling. People are losing their jobs in the urban economies, hit by logistical problems, and farming is suffering from lack of access to some markets. 

Social investment, as measured by state spending on education, health, water, and power, averages under US$200 a year. This represents one of Africa’s lower per capita figures because of Nigeria’s vast population.

As conflict and insecurity grow across the country – whether caused by communal clashes over land rights, jihadism, political crusades, or outright criminality – officials in Abuja are joining the dots between deteriorating social conditions and young people taking up arms.

Yet their policy options since the pandemic have narrowed. That is, federal revenues have crashed along with commodity prices, while trade has been hit by border closures and other logistical hurdles. The state has had to invest far more in public health, both preventative and curative, to moderate the damage wrought by successive waves of the COVID-19 coronavirus. 

Few Nigerian health care professionals are consoled by the relatively low fatality rate in the country, or even the low reported rate of infections. Most researchers suspect widespread under-reporting of coronavirus fatalities, and especially of infection rates.

One informal but unvalidated sample survey estimated that as many as a third of the 20 million people in Lagos may have had asymptomatic cases of COVID-19. The worry is of the consequences if a more potent variant of the virus starts spreading in the city, one of the most densely populated conurbations in the world. 

State officials there draw parallels between Lagos and what happened in Kolkata and Mumbai, which were hit by a deadlier variant in a second wave of infections earlier this year. They warn that local health facilities are less able than their Indian counterparts to accommodate tens of thousands of pandemic patients.

But the central issue for Abuja is economic: not only how to raise the cash to finance social protection in the wake of the pandemic but how to finance the national economic recovery plan, built around capital investments in power and communications and job creation in the agrarian and urban economies.

Continues…

  • A vacuum at the top?
  • Creative funding proposals
  • Vaccine distribution
  • The energy transition

This excerpt is taken from Nigeria Focus, our monthly intelligence report on Nigeria. Click here to receive a free sample copy.


The September 2021 issue of Nigeria Focus also includes the following:

Spotlight: What can Buhari win from the summit season?

Implications

Energy Industry 

  • Oil output issues
  • Climate considerations
  • Buhari announces NNPC Ltd board
  • In the black?
  • A shadow over the Petroleum Industry Act 
  • Dangote financing and acquisitions
  • Fuel price woes

Niger Delta

  • The VAT spat

Politics & Society

  • Buhari at the United Nations
  • The pandemic punch
  • Political musical chairs
  • Chairing and zoning
  • Co-operating with Russia
  • Dismal security picture

Economy & Finance

  • Borrowing plans 
  • Central Bank of Nigeria policy under fire
  • Inflation falls, rates steady
  • State finances
  • Growth report