The Federal Government is seeking foreign loans and the withdrawal of N150 billion from the Stabilization Fund component of the country’s Sovereign Wealth Fund (SWF). The need for economic reform in Nigeria has never been more urgent than now. COVID-19 has exposed fault lines and vulnerabilities in Nigeria’s economy and its health and education sectors.
The long and short of it is that the economics of Corona virus or Coronanomics, shows the interconnectedness of everything, that is the value chain of human existence from biology to economics, politics, technology, trade, investment, race, culture, identity and everything else. In the face of such infinitude, what is most required is leadership to help the people regain a sense of balance and restore all things that may have gone awry. Where leadership fails, the people’s misery is made worse, but the leadership also pays a price. When the New York Stock Market crashed in October 1929, Herbert Hoover (R) who had distinguished himself as a great mobiliser of relief efforts after World War 1 was the President of the United States. But his failure to manage the Great Depression, tactically and realistically, ruined his reputation.
In 1932, he lost the Presidential election to Franklin Delano Roosevelt (D). Roosevelt introduced the New Deal and an effective stimulus package that was backed by the Federal Government. This helped the United States to recover faster than other countries. Many countries were still battling with the Depression until World War II broke out in 1944. The quality of leadership made all the difference. Roosevelt was re-elected four times as President. Hoover is not remembered as a great American President. FDR died in office as one of America’s greatest. The cause of the Great Depression of 1929 -1944 may have been economic or financial, and the cause of COVID-19 may be biological, but there are clear areas of convergence in terms of economic and political impact. The fortunes and legacies of political leaders today may rise and fall with COVID-19 and its various fall-outs.
The common denominator, so far, is the attempt by governments to protect and save lives and the economy. China is ahead in moving quickly from pandemic to economic recovery. The United States, UK, Canada, Russia, Japan, United Arab Emirates and other countries have announced different stimulus packages to cushion the effect on households and businesses. In Nigeria, the government has also introduced a number of measures and initiatives. But many questions have been raised about the quality of our government’s intervention and strategy. Nigeria has a reputation for doing the right thing the wrong way. We see that at play. There are yawning disparities in the delivery of Conditional Cash Transfers and doubts have been expressed about the enabling criteria and the absolute numbers. Nigeria is targeting 3.6 million households, and a total of 11. 6 million persons who are considered poor and vulnerable because they have less than N5, 000 in their bank accounts and cannot afford to buy up to a N100 worth of recharge cards. In a country of 200 million people, even if this cash transfer is well-managed, it would amount to a non-intervention. Food palliatives have also been announced in the form of release of 70, 000 metric tonnes of grains from the National Grains Reserve. Yet, a few days ago, the Oyo State Government openly rejected 1,800 bags of rice donated to the state by the Federal Government on the grounds that the rice was infested with weevils!
Corona Virus confronts Nigeria with basic Economics and Sociology 101 lessons. Nigeria may well end up not as one of Ruchir Sharma’s BreakOut Nations (Norton and Company, 2012) but as a Break Down Nation. Nobody can predict the point at which the country’s leaders will begin to understand the difference between both. The relevant lessons lie in the nexus between politics, economy and leadership.
