Following the approval and disbursement of $3.4 billion Rapid Financing Instrument (RFI) to Nigeria, which is the largest COVID-19 emergency financing package so far released by the International Monetary Fund (IMF), the multilateral financial institution now expects transparent and accountable use of the funds.

The IMF’s financial assistance to Nigeria is meant to support the healthcare sector, stabilise the economy, and protect jobs and businesses that have been severely impacted by the pandemic.

The Bretton wood institution has been disbursing funds to work closely with member countries to ensure transparent and judicious use of the financial support, while making sure they are used for the intended purpose.

The IMF’s mission chief for Nigeria, Amine Mati, during a conversation, pointed out the measures to be taken by Nigeria in order to enhance transparency and governance in the use of the $3.4 billion IMF emergency financing.

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According to the IMF chief, the Nigerian Government had committed to undertake an independent audit of crisis mitigation spending and related procurement processes, as well as to publish procurement plans and notices for all emergency response activities which include the names of companies that were awarded the contracts and the beneficial owners.

Mr. Mati also disclosed that special budget lines are to be created to record all crisis emergency response measures, which are published daily on Nigeria’s treasury online portal. These measures will not only ensure that financial assistance received as part of the COVID-19 response is used for its intended purposes, but will also significantly strengthen the oversight of the entire budget used for the government’s crisis response.

What are the measures taken by #Nigeria to enhance transparency and governance in the use of the $3.4 billion IMF emergency financing? https://t.co/0zqIbYHz5U #IMFAfrica pic.twitter.com/RjGR1o59Cd

— IMF (@IMFNews) May 31, 2020

Implementing these measures will help to drastically reduce the governance and transparency challenges as well as corruption vulnerabilities of a country like Nigeria. Most of the critics of the government’s borrowing pattern have often expressed serious doubt about the judicious use of these funds, as they believe most of them might end up being embezzled.

Nigeria’s high poverty data is one that we have first, rejected – deemed as untrue, before eventually coming to terms with its sad reality. For a nation with one of the biggest economies of the world, the daunting results speak of a failure that we would rather hide behind the façade of our strong economy or our huge active population.

We, however, couldn’t pretend for long because soon enough, Nigeria overtook India, taking its title of the poverty capital of the world.

The National Bureau of Statistics (NBS), in a report about poverty and inequality from September 2018 to October 2019, stated that 40% of Nigerians (82.9 million) lived below its poverty line of N137,430 ($381.75) a year.

The Northern states rank poorest with nine of the top 10 poorest states in the country owing largely to the Boko Haram insurgency, massive unemployment rates, low access to healthcare services, and millions of children out of school – all which have been compounded by the COVID-19 pandemic.

In the most recent estimates, the World Bank estimates that 40 million to 60 million people will fall into extreme poverty (under $1.90/day) in 2020, compared to 2019, as a result of Covid-19, depending on assumptions on the magnitude of the economic shock. Even though the stats in themselves are bad, they hold many other truths. One of such lies in the purchasing power of the average Nigerian.

Poverty and the purchasing power of Nigerians

The World Bank categorizes poverty into three levels: Those who live on less than $1.90 a day, those who live on less than $3.20 a day, and those who live on less than $5.50 a day. Before now, the international poverty line had been set at a dollar-a-day by the World Development Report of 1990. However, it was updated to provide a more accurate description of the real cost of living in different countries.

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Being the poorest country in Africa, it is safe to say that the average Nigerian, therefore, falls within the category of less than $1.90 a day, less than $3.20 a day, or less than $5.50 a day. In Naira terms, using an exchange rate of N390 to a dollar, it means the average Nigerian either has N741, N1,248, or N2,145 to spend in a day.

These funds cut across expenses on housing, feeding, clothing, communication etc. The 2019 expenditure pattern report – a measure of Nigeria’s spending pattern in both food and non-food items, revealed that 56.65% of the household expenditure in 2019 was spent on food, with the balance of about 43.35 spent on non-food items.

Also, a survey carried out by FinMark Trust in partnership with EFInA, just this month, reveals that Nigerian households are beginning to experience reduced income, lower food consumption, and reduced access to financial and health services following the onset of the COVID-19 epidemic and related lockdowns. Consequently, the low purchasing power is now even lower.

The implication of our purchasing power reveals two core truths:

1. Industries that do not cover necessities immediately eliminate a huge portion of the populace.
2. Even businesses that in core industries that are priced above the minimum spending value of the average Nigerian, eliminate millions of potential customers.

More so, these values represent spending spreads. In other words, with N1,248 to spend on pretty much everything, only a smaller percentage will be apportioned to even the most important cost items.

What this means: A business owner with a core product that costs just N1,000, you are already providing a luxury service in the Nigerian context. Items sold under these price points are like recharge cards, sports betting, sachet milk, etc., tend to make solid businesses as a result of their huge share within the spending capacity of most Nigerians.

In truth, the very essence of market segmentation – the division of a broad array of customers into sub groups, is that all businesses cannot cater to all markets.

However, the allure of maintaining low price points could also mean that Nigerians might be getting less value in order to just be able to afford a product. This goes to show the real purchasing power of Nigerians, and it is as instructive as it is worrisome because clearly, our high poverty rate affects every single one of us.

The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to rise as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 10,162 confirmed cases.

On the 31st of May 2020, 307 new confirmed cases and 14 deaths were recorded in Nigeria.

To date, 10162 cases have been confirmed, 3007 cases have been discharged and 287 deaths have been recorded in 35 states and the Federal Capital Territory having carried out 60,825 tests.

Covid-19 Case Updates- May 30th 2020

• Total Number of Cases – 10,162
• Total Number Discharged – 3,007
• Total Deaths – 287
• Total Tests Carried out – 60,825

The 307 new cases were reported from 15 states – Lagos (188), FCT (44), Ogun (19), Kaduna (14), Oyo (12), Bayelsa (9), Gombe (5), Kano (3), Delta (3), Imo (2), Rivers (2), Niger (2), Bauchi (2), Plateau (1), Kwara (1).

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The latest numbers bring Lagos state total confirmed cases to 4943, followed by Kano (954), Abuja at 660, Katsina (364), Oyo (292), Edo (284), Ogun (278), Borno (271), Jigawa (270), Kaduna (258), Bauchi (238), Rivers (206), Gombe (161), Sokoto (116), Plateau (105).

Kwara State has recorded 88 cases, Delta (83), Zamfara (76), Nasarawa (62), Yobe (52), Akwa Ibom and Osun (45), Ebonyi (40), Adamawa (38), Imo (36), Kebbi (33), Niger (32), Ondo (25), Bayelsa (21), Ekiti (20), Taraba and Enugu (18), Anambra (11), Abia (10), Benue (7), while Kogi state has recorded 2 cases.

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, President Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

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