As governments all over the world strategise to contain of the rapidly spreading coronavirus, KUNLE ODEREMI, DARE ADEKANMBI and LUCKY UKPERI undertake a peer review of Nigeria’s palliative effort with what countries like Kenya, South Africa, Ghana, Egypt and others have done to cushion the effects of the lockdown on their economies.
FROM the city of Wuhan in China where it broke out in December of 2019 and forced about 56 million people within it and the surrounding Hubei Province on an aggressive quarantine and total lockdown for two months, coronavirus or its shortened form COVID-19, has spread globally like a plague.
But in the city of its origin, life and living are gradually beginning to return to normal, just as hitherto relaxed restriction of movement, following report of no new cases of the dreaded virus, is due to be completely lifted on April 8, three days hence.
Although the virus may have been largely contained in East Asia where it broke out, the intensity and ferocity of its spread is stretching government budgets and making medical personnel to be overwhelmed and supplies to thin out, especially in Europe where Italy and Spain lead the pack of worst-hit countries and in North America, particularly in the United States.
Africa, as the second largest and second most populous continent in the world, has not been spared the scourge of the ravaging virus which the World health Organisation (WHO) has rightly declared a pandemic.
But what has defined the outlook of the containment policies put in place by various governments of the world, in Europe, the Americas, Asia, Oceania and even in Africa is the humanitarian gesture of giving some measure of palliatives to the citizens of these countries. In the face of unwarranted hardship, the palliatives by the governments meant to give succour and build confidence of the people in their governments and countries. The responses by the governments of these countries had been deliberately measured, organised and methodical.
Nigeria›s measure of palliatives
The situation, however, is different here. Governments in Nigeria have their own way of measuring standard. After an initial slow response to the pandemic, the federal and state governments have since placed restriction on interstate movements as part of effort to contain the spread, just as there have also been curfews imposed in a number of states, in addition to the limitation on cluster of people.
Determined to halt the spread of the virus and prevent what could be potentially a national disaster, President Buhari, on Sunday, addressed the country, for the second time since the outbreak of the disease in the country. In his address, he enumerated the various steps taken by government to arrest the spread of the disease and ordered a 14-day lockdown of Lagos, Ogun and Abuja.
“In Nigeria, we are taking a two step approach. First, to protect the lives of our fellow Nigerians and residents living here and second, to preserve the livelihoods of workers and business owners to ensure their families get through this very difficult time in dignity and with hope and peace of mind.
“This is why we provided an initial intervention of N15b to support the national response as we fight to contain and control the spread.
“We also created a Presidential Task Force (PTF) to develop a workable National Response Strategy that is being reviewed on a daily basis as the requirements change. This strategy takes international best practices but adopts them to suit our unique local circumstances
“We are fully aware that such measures will cause much hardship and inconvenience to many citizens. But this is a matter of life and death, if we look at the dreadful daily toll of deaths in Italy, France and Spain.
“Furthermore, I have directed that a three-month repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans be implemented with immediate effect.
“I have also directed that a similar moratorium be given to all Federal Government funded loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export Import Bank.
“For on-lending facilities using capital from international and multilateral development partners, I have directed our development financial institutions to engage these development partners and negotiate concessions to ease the pains of the borrowers.
“For the most vulnerable in our society, I have directed that the conditional cash transfers for the next two months be paid immediately. Our Internally displaced persons will also receive two months of food rations in the coming weeks.
“We also call on all Nigerians to take personal responsibility to support those who are vulnerable within their communities, helping them with whatever they may need,” Buhari said in his nation broadcast last Sunday, calling on Nigerians to make sacrifice.
Beyond the call for sacrifice from the citizens, he promised some form of social interventions one of which is the release of a 70,000 tonnes of grains from the National Grains Strategic Reserves and financial grants to the poorest of the poor in the society.
But many have described the gestures from the government as both salutary and ridiculous, in view of the humongous nature of the poverty ravaging the land, lack of reliable data to be used in determining the beneficiaries of the packages, as well as against the backdrop of the measures other countries in Africa battling COVID-19. A few of them are South Africa, Egypt, Uganda, Kenya, Ghana, Rwanda, and the Republic of Congo, most which the World Health Organisation (WHO) had predicted were vulnerable to the pandemic.
Experience in other countries
In Kenya, the president emphasised fiscal and monetary policies which seem to favour those in the formal sector of the economy. Some Kenyans have observed that these measures do not cater for the majority who are in the informal sector of the economy.
For example, in his speech, President Uhuru Kenyatta, said: “I recognise the anxiety that this pandemic has caused millions of Kenyan families; fearful of what the future may hold for them and their children. And the possibility of job losses and loss of income weighing heavily on their minds.
“In order to protect jobs for our people and to provide some certainty for both employees and their employers, I, as your president, order and direct as follows:
“That the National Treasury implements the following immediate reliefs and increase disposable income to the people of Kenya, through: 100 per cent tax relief for persons earning gross monthly income of up to 24,000 Kenyan shillings (Ksh).
“Reduction of Income Tax Rate (Pay-As-You-Earn) from 30 per cent to 25per cent; reduction of Resident Income Tax (Corporation Tax) from 30 per cent to 25 per cent; reduction of the turnover tax rate from the current three to one per cent for all Micro, Small and Medium Enterprises (MSMEs);
“Appropriation of an additional 10 billion Kenyan shillings to the elderly, orphans and other vulnerable members of our society through cash-transfers by the Ministry of Labour and Social Protection, to cushion them from the adverse economic effects of the COVID-19 pandemic;
“Temporary suspension of the listing with Credit Reference Bureaus (CRB) of any person, Micro, Small and Medium Enterprises (MSMES) and corporate entities whose loan account fall overdue or is in arrears, effective 1st April, 2020.
“The National Treasury shall cause immediate reduction of the VAT from 16 percent to 14 per cent, effective 1st April; that all Ministries and Departments shall cause the payment of at least of 13 billion Kenyan shillings of the verified pending bills, within three weeks from the date hereof.
“Similarly, and to improve liquidity in the economy and ensure businesses remain afloat by enhancing their cash flows, the private sector is also encouraged to clear all outstanding payments among themselves; within three weeks from the date hereof.
“That the Kenya Revenue Authority shall expedite the payment of all verified VAT refund claims amounting to Ksh.10 billion within three weeks; or in the alternative, allow for offsetting of Withholding VAT, in order to improve cash flows for businesses.
“That Ksh.10 billion from the Universal Health Coverage kitty, be immediately appropriated strictly towards the recruitment of additional health workers to support in the management of the spread of COVID-19.
“In sharing the burden occasioned by the present global health pandemic, over the duration of the global crisis and commencing immediately, my Administration has offered a voluntary reduction in the salaries of the senior ranks of the National Executive, as follows: the President and Deputy President – 80 per cent; Cabinet Secretaries – 30 per cent; Chief Administrative Secretaries – 30 per cent; Principal Secretaries – 20 per cent,” Kenyatta said.
He also enjoined those in the other arms of government to take a similar decision to free up money to enable government to combat the virus.
“The Central Bank of Kenya has additionally rolled out the following measures: the lowering of the Central Bank Rate to 7.25 per cent from 8.25 per cent, which will prompt commercial banks to lower the interest rates to their borrowers, availing the much needed and affordable credit to MSMEs across the country.
“The lowering of the Cash Reserve Ratio (CRR) to 4.25 per cent from 5.25 per cent will provide additional liquidity of Ksh. 35 billion to commercial banks to directly support borrowers that are distressed as a result of the economic effects of the COVID-19 pandemic.
“The Central Bank of Kenya shall provide flexibility to banks with regard to requirements for loan classification and provisioning for loans that were performing as of March 2,2020 and whose repayment period was extended or were restructured due to the pandemic,” the president added.
Following criticisms of the limitations of these measures and suggestions that food items should be factored into the palliative measures, especially as it concerns the self-employed and unemployed, on March 30, 2020, the counties governors took a major decision to cushion the effects of the pandemic on food when they agreed to waive the collection of ‘cess levies’ on food items.
The ‘cess levy’ is a major revenue generating tax collected by the county governments on agricultural produce sold within their domain. The governors also assured the people their desire to create an efficient and effective system of transportation to make food items available as well as affordable for the people due to the coronavirus situations.
Egyptian presidential spokesperson, Bassam Radi, on Monday, said Egypt’s President, Abdel Fattah El-Sisi, gave directives on provision of basic food commodities and increase in the strategic food reserves to meet people’s demands across the country, amid the strict measures taken by the government to curb the outbreak of the novel coronavirus pandemic.
The spokesperson said President Sisi also affirmed the necessity of controlling the local markets to prevent monopoly practices, especially ahead of the Holy Ramadan, the ninth month of the Islamic calendar during which the Muslims fast from dusk to dawn worldwide.
The Egyptian government also focused on health workers whose salaries and allowances he increased o Monday , while also releasing money to employ more medical personnel to stem the tide of the coronavirus.
On Sunday, Egyptian president, Sisi, decided to increase by 75 per cent monthly allowance for medical professionals which provides compensation for working conditions at a total cost of about LE2.25 billion. Sisi also ordered the establishment of a risk fund for healthcare workers in hospitals and universities teaching hospitals across the country.
The president also ordered that bonuses be provided for all employees currently working in isolation, fever, and chest hospitals as well as those in central laboratories across Egypt.
The Egyptian government has, however, been criticised for the way it has been handling the COVID-19 pandemic as not being transparent due to the way information is censored, especially following the death of high profile Egyptian military and medical personnel and the sacking of the correspondent of the Guardian newspaper from the government press crew.
A video of an Egyptian woman went viral last week. She was complaining bitterly of the difficulty of survival, especially in terms of food provision in the wake of the curfew imposed by the government. The woman, who spoke in Arabic, revealed the need for palliative measures in the area of food provision for many Egyptians.
The Chadian government is yet to talk about palliative measures for its citizens, probably because the cases of coronavirus infection is still minimal as the country has only seven confirmed cases of the virus as of Tuesday March 31, 2020.
Although, the government has closed its borders with neighbouring countries to prevent the movement of persons before they experienced the index case, the government has said its borders and airports are open to transportation of goods and food items from other nations of the world.
Africa’s second biggest economy tops the African log on COVID-19, recording 1,353 cases with five mortalities as of April 1. For the former Apartheid enclave, whose economy had already been declared to be in a “technical recession,” nothing could be more straining.
The South African government is acutely aware of the consequences of the lockdown on the citizens, jobs, and the private sector. Shortly after the lockdown came into effect, a wide range of safety nets was rolled out by government to cushion the effects of the decisions taken to stop COVID-19.
The country’s Employment and Labour Minister, Thulas Nxesi, on March 24, the government announced economic relief plan to ameliorate the plight of the citizenry during while the lockdown lasts on April 16.
A look at the relief package showed that the country already has a lot of economic stimulus packages for the various segments of the country’s human population, particularly as they relate to labour regulation and employment.
What the country simply did was to activate the extant frameworks in addition to the emergency plans for the virus.
According to the Minister, government workers who are on emergency services during the period will be compensated and adequately furnished with protective gears and other safety materials.
Not only that, other categories of workers who are not on emergency duty and fall ill during the lockdown or whose socioeconomic conditions will take a plunge during the period of national emergency will also receive adequate financial support from government.
“We are activating the Basic Conditions of Employment Act rights for those employees. Those who will be working during this period will be expected to be supplied with the necessary protective gear when on duty,” he said.
Workers in the private sector are not left out of consideration by government of South Africa. Through the instrumentality of a legal instrument, the National Economic Development and Labour Council Act (NEDLAC), employers in the private sector and their workers have agreed “to negotiate special leave conditions.”
South Africa also makes workers who may be temporarily unemployed due to a number of reasons. This is done through the Unemployment Insurance Fund (UIF) which provides temporary relief to workers. Each worker can draw R3,500 monthly from UIF.
There is also the National Disaster Benefit which is being worked on by the country. The essence of this initiative is to reduce the burden any lay off of workers by companies may pose to the already challenged economy. Each of the workers who falls in this category will draw R17, 712 monthly
“The UIF benefits for illness, reduced work time and unemployment will then kick-in. In addition, the UIF will compensate workers through a new National Disaster Benefit.”
“Our actuaries are crunching the figures; they are meeting with NEDLAC stakeholders and expect that tomorrow we will make detailed announcements including how this is going to be administered.
“Remember that we are talking about millions of workers who are going to be claiming. We need to find a way that we will decentralize that. We have agreed that we are going to use the companies, the bargaining councils, are going to be advancing monies to them and also allow them to pay those employees, but with very strict conditions,” he said.
For those in the informal sector who are not captured by government agencies, the President Cyril Ramaphosa said a safety net would be developed to secure them from any possible economic hardship.
He also assured owners of small businesses that a relief support, which will be backed up by regulation, was being worked out
Furthermore, there is Solidarity Fund which provides for four months temporary 20 per cent tax break for small businesses and a “R500 Employment Tax Incentive” for four million South Africans who earn lower than R6, 500 monthly.
Reacting to the interventions of government, the Congress of South African Trade Union (COSATU), said “This economic crisis is unprecedented and requires bold, creative and decisive interventions to ensure the survival of the entire economy. The government cannot outsource its leadership responsibilities at this critical period. Delaying these urgent interventions will amount to economic suicide.”
But the South African Federation of Trade Unions (SAFTU), which threw its weight behind the lockdown, however, slammed government interventions, amounting to about R12 billion, as tokenistic.
Ghana has focused more on health workers who are on the frontline combating the virus than on providing palliatives for the general citizenry. In fact, its president, Nana Akufo-Addo, has not accepted to impose a lockdown order on the country.
He is weighing the economic consequences of taking such a decision. Instead, he pronounced a restriction of movement into the Greater Accra Metropolitan Area and the Greater Kumasi Metropolitan Area for a period of two weeks.
On Saturday, March 30, his Minister of Health announced an insurance cover for healthcare professionals and ancillary staff.
According to the minister, each health worker is insured up to the tune of $60, 000 for death and $4, 300 for critical illness.
In his third address to Ghanaians on efforts to stop the spread of coronavirus, President Nana Akufo-Addo, said: “We know what to do to bring back our economy back to life. What we do not know how to do is to bring people back to life.”
But at a meeting involving Ghana’s Trades Union Congress (TUC), he responded to those calling for a lockdown of the country. “People in Ghana are now talking about a lockdown. Majority of people who will be affected by decisions of that nature are the working people of our country, the ordinary people of Ghana.
“They are the ones who will be affected and it is important for us to take into account the circumstances and conditions. When we lock down Accra, what are the consequences?”
“A responsible government is required to look at all the implications before decisions are made. And that is the exercise we are currently engaged in and I am hoping that much sooner than later we will come to an agreement on what those measures are and the Ghanaian people will be informed.”
“All that government is doing is intended to achieve five key objectives – limit and stop the importation of the virus; contain its spread; provide adequate care for the sick; limit the impact of the virus on social and economic life; and inspire the expansion of our domestic capability and deepen our self-reliance.”
“However, as we have demonstrated over the course of the last three years, where we inherited an economy that was growing at 3.4 per cent and transformed it into one which has grown by an average of seven per cent over the last three (3) years, I assure you that we know what to do to bring back our economy back to life. What we do not know how to do is to bring people back to life.
“Fellow Ghanaians, with the Bank of Ghana predicting a worst-case GDP growth rate scenario of 2.5 per cent for 2020, should the virus continue to linger for the rest of the year, the effects on our economy would be dire,” he said.
It was gathered that Ghana has requested a credit facility from the International Monetary Fund (IMF), which it said should be released under the Rapid Credit Facility Disbursement to enable the country effectively tackle the virus.
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