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Analysis: Nigeria’s likely cost per treatment for COVID-19

The likely cost of treating victims of COVID-19 is not child’s play.




Since the recent outbreak of the Coronavirus, we have seen public health officials declare that many developing nations do not have the financial capabilities to manage the healthcare treatment options for individuals who become infected with this virus.

This has prompted the question, what are the potential costs of the available healthcare options for COVID-19 positive patients?

No known cure

At this stage, there is NO KNOWN cure for this virus with 100% certainty, however, research for vaccinations and cure continues fervently. In the interim, official guidance from public health authorities is to proceed with caution when adopting any of the speculative treatment options

Current healthcare approaches

Across the developed world, the preferred treatment approach has been to TEST individuals who display symptoms of the COVID-19 virus, after which patients are broadly categorized into 4 groups with a variety of healthcare approaches as outlined in the table below


From a public health perspective, there is arguably a two-fold gap with the current approach.

  • Firstly, individuals who test positive but have low health effects are currently permitted to return to their house but with self-quarantine recommended. This is simply an honor-based system which relies on these set of individuals doing the honorable thing.
  • Secondly, asymptomatic individuals (i.e. individuals who do not display COVID-19 symptoms) are NOT typically tested, leaving them free to roam and potentially expose other individuals.

READ ALSO: GTBank launches Beta Health, expands access to health insurance for low-income Nigerians

The number of individuals who are either not tested or being asked to self-quarantine is not known but is estimated to be in hundreds of millions of people globally.

As an example, in the United States, only 1.7million people have been tested as at 6th April 2020, in a country of over 300 million individuals. There is simply no way 300 million people will ever be tested in the USA. Therefore, given existing financial resource constraints, it will be impossible to cater to the health of these groups of individuals.

Unit cost per COVID-19 patient

In the United States of America, a number of health spending reports were released in March 2020 from Kaiser Health Foundation, as well as, FAIR Health, Inc.

These reports estimated the cost range of treating a single COVID-19 patient requiring hospitalization to be within $5,000 to $88,000 per person depending on severity and duration of hospital stay


Nigerian perspective

Nigeria’s health authorities are yet to publish an official COVID-19 cost estimate per person. However, for simplicity, let’s assume a conversion factor of 0.15 (in other words, the cost of treatment in Nigeria will be 15% of treatment costs in the United States.

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This may be too low if you believe the World Bank’s Price level ratio PPP Conversion factor of 0.339 or33.9%. But for now, let’s argue that cheaper labour costs savings in Nigeria will exceed the cost of importing medical equipment, COVID test kits, and reagents, etc.

This 15% estimate will mean an average cash outlay of $750 to $13,000 (or N270,000 to N4.7million per person depending on the duration of hospital stay i.e. 6 days stay or 23day intensive care hospitalization). This multiplied by a forecast of 39,000 positive cases in Lagos means a potential cash outlay of N10.5 billion just for Lagos alone. This, of course, excludes economic impact, never mind the residual 35 states in Nigeria

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Interestingly, ExpatAssure (a health insurance broker for expatriates) estimates an average healthcare cost of $275 for a single night in a Nigerian hospital with an additional $110 average cost for consultation (i.e. likely cash outlay for 6 days is $1,650 or N594,000). Understandably, people will argue vigorously that decades of mismanagement of / underinvestment in the healthcare sector is now coming back to haunt Nigeria and Africa.

However, whichever estimate is chosen, the absolute cash outlay for treating COVID-19 patients will not be trivial. More worryingly it remains to be seen how these costs will be funded and repaid by FG and States.

Blurb articles are succinctly written opinions editorials from content contributors expressing their views on financial reports, macroeconomic data, and economic policies. Blurb is recommended for readers seeking 'straight to the point' information and viewpoints that can help shape better investment decisions.



  1. Femi Odunsi

    April 8, 2020 at 7:07 am

    Thank you for the analysis. So far different countries have used different strategies to combat COVID 19. Nigeria needs to choose a coat effective option that suits our epedmiologic and fiscal needs. In my opinion, I think the only applicable costs are those for Category E. Category D do not need to be tested and certainly don’t require admission. They can stay at home and simple analgesics and rest. Most will recover. This is also the strategy employed in the UK. There should be no testing and thus no costs associated with Categories A, B and C (especially when we are outside the containment phase) . We can model the population transmission and prevalence based on hospital admissions i.e. cases. This will also help reduce the cost of intervention and help our health workers focus on those who really require them.
    The other way to estimate the cost is to estimate that 5% of positive cases will require hospital admission. This is about the range seen elsewhere and may even be lower with us given we have a significantly younger population. For Lagos, I’d double the 39,000 estimated as we are likely under testing and to offer a safe allowance in planning. This will mean about 80,000 cases in the next few weeks if things go well. Of these 5% will require testing and admission – 4000 cases. I think the cost will be substantially less.


    April 8, 2020 at 3:19 pm

    Comment:Above all said and done,we dont value ourselves and the government is passive about our situation

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Nigerian Breweries leveraging, but stacking cash through rising input costs

The marathon continues for Nigerian Breweries with its 2020 financials.



Humanity might need more booze to survive the increasingly daunting intricacies of life, but Nigerian Breweries 2020 financial statement is proof that even the best can get caught up in the reality of changing business lifecycles.

Nigerian Breweries Plc had floored the market providing both alcoholic and non-alcoholic premium quality beverages across the nation. But with brands like Star lager beer launched as far back as 1949, Gulder lager beer launched in 1970, and even the family-friendly Maltina introduced as far back as 1976, it is only natural that both the old and new generation competition gives them a run for their market share.

Much like other old money companies, Nigerian Breweries has done its bit to remain relevant in the industry from creating new variants of existing favoured brands to paying dividends consistently annually for the past few years. Yet within the same period, the company’s financial statements have been a testament to its streamlined market share and reducing profits. The marathon continues with its 2020 financials. The industry giant may as well be setting itself up for a debt quagmire peradventure its projections do not match the true reality of events.

READ: How COVID-19 has changed Nigeria’s consumer goods & industrial markets –KPMG

2020 financials: A tale of higher costs & larger debts

2020’s unfavourable financial/ business environment led to the increase in the prices of raw materials and disruptions in logistics for many Nigerian-domiciled businesses including Nigerian Breweries. Raw materials and consumables witnessed a 17% increase despite the marginal growth in revenue.

While the group’s 2020 results revealed a 4.35% increase in revenue from N323 billion in the prior year to around N337 billion, these gains were curtailed by a higher-than-par increase in cost of sales which had risen by 13.9%, from the N191.8 billion expended in 2019 to N218.4 billion as its 2020 financials reveal and interest rates going way up.

READ: Flour Mills and its diverse challenges

The company’s lower operating expenses were not enough to salvage the disruption caused by the raging interest expense following increased charges paid on bank loans and overdraft facilities as well as the significant increase in overall debt. Between 2019 and 2020 alone, long term loans and borrowings increased by 974% from N4.8 billion to as much as N51.8 billion. Even trade and other long term payables increased by 35%.

In its financials, the company noted that it has revolving credit facilities with five Nigerian banks to finance its working capital. The approved limit of the loan with each of the banks range from ₦6 billion to ₦15 billion (total of ₦66 billion) and each of the agreements had been signed in 2016 with a tenor of five years. The Company had also obtained Capital and Working capital finance from the BoI in 2019.

READ: Manufacturing sector in Nigeria and the reality of a “new normal”

It is no news that the company is involved in diversified lease arrangements. Following reclassifications made in 2019 to some of its lease assets, the 2020 asset base also witnessed significant increase in Right of Use Assets which increased by 288%% from N11.1 billion to N42.9 billion. Yet, the fact that in one year, interest expense on Lease Liabilities rose from N19.7 million in 2019 and to a whopping N4.171 billion shows that the company is taking way more debt than its books require.

But what’s it using all the cash for?

Beyond rising material costs, borrowing costs have been huge and the annual interest payment by virtue of these loans make the possibility of higher profits for the company a mirage. That said, the overall increase in total liabilities might not have been such a bad idea if the funds were being used to increase revenue and profits. But having a huge chunk of all that money in cash creates a different kind of challenge. Cash and bank values in its statement of financial position significantly increased by 377% from N6.4 billion in 2019 to N30.4 billion in 2020.

Is the cash being held to mitigate possible challenges of the volatile economy or are they being used to pay dividends? Even at a share price of N52 per share, the company’s price-to-book value sits at 2.5816, testament of its dire overvaluation. Consequently, there is an ardent need for the company to come up with newer ways to attract the wider market and keep its book in the green with a little less external funding.

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Secret behind MTN’s blistering performance

Despite COVID-19 disruptions, MTN Nigeria’s 2020 financials showed marked improvements compared to its 2019-year-end.



NCC, MTN’s parent company faults regulator’s recommendation for data price reduction, MTN Nigeria reacts to poor internet as network issues go beyond Nigeria 

MTN Nigeria Communications Plc (MTN Nigeria) released its audited financial results for the financial year ended December 31, 2020.

Despite a challenging 2020 to individuals and businesses caused by COVID-19 disruptions, MTN Nigeria’s financial and non-financial information showed marked improvements compared to its 2019-year-end as well as prior quarters of 2020 results that were impacted by the COVID-19 pandemic.

Indeed, the evolving pandemic which intensified lockdown, remote working, and work-from-home procedures, appeared to have led to increased adoption of MTN Nigeria data and digital services.

Specifically, year-on-year on non-financial information, mobile subscribers increased by 12.2 million to 76.5 million; active data users increased by 7.4 million to 32,6 million while the company’s mobile money business continued to accelerate with a 269.2 % increase in the number of registered agents to over 395,000 and 4.7 million active subscribers from approximately 553,000 in 2019.

Year-on-year on financial information, service revenue increased by 14.7 % to NGN1.3 trillion driven principally by voice (with revenue growth of 5.9 %) and data revenues (rising by 52.2 % led by increased data use and traffic); profit before tax (PBT) grew by 2.6 % to N298.9 billion; profit after tax (PAT) increased by 0.9 % to N205.21 billion; while Earnings per share (EPS) rose by 0.9 % to N10.1 (N9.93, 2019).

Nonetheless, significant increases were noted in its operating expenditure as well as capital expenditure. First, there was a 2.3 % increase in operating expenses arising from the rollout of new sites and the impact of naira currency depreciation affecting the costs of MTN Nigeria lease contracts. Secondly, EBITDA margin declined by 2.5 %age points to 50.9 % (from 53.4 % in 2019) There were also other significant cost rises including a 25.4 % increase in net finance cost, and 19.4 % increase in capital expenditure which had a 11.7 % knock-on increase in depreciation and amortization costs.

On the back of the year-end result, MTN Nigeria has proposed a final dividend per share (DPS) of N5.90 kobo per share to be paid out of distributable income and brings the total dividend for the year to N9.40 kobo per share, representing an increase of 18.7 %. MTN Nigeria paid N4.97 as final dividend for the year ended December 31, 2019. This was in addition to an interim dividend of N2.95, which brought its total 2019 dividend to N7.92 per share.

The proposed dividend implies a yield of 3.4%. Having paid an interim dividend of NGN3.50 in 2020, the proposed dividend, if approved, will bring the total dividend per share to NGN9.40 or c.19% higher compared with 2019.  We expect a positive reaction from the market due to the marked improvement in earnings. However, the market’s reaction may be dampened by negative investor sentiments on equities arising from the uptick in yields on fixed-income securities.

We expect that the introduction of additional customer registration requirements requiring subscriber records are updated with respective National Identity Numbers (NIN), and the continued suspension of the sale and activation of new SIM cards will affect subscriber growth.

MTNN share price remains unchanged at the end of trading yesterday at N174 per share.


Tade Fadare PhD, is an economist, and a professionally qualified accountant, banker and stockbroker. He has significant experience working or consulting for financial institutions in Europe, North America, and Africa.

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