Prior to when an Italian national brought in Nigeria’s first COVID-19 case in late February, many Nigerians perceived the contagious virus as a “white man” disease. Little did they know that barely one month later, most parts of the country would be under lockdown in a bid to contain the virus from spreading. Also, a lot of people did not envisage that the outbreak would come with severe economic consequences.
Fast-forward to present times and Nigeria is really struggling to contain the spread of the virus. The adverse economic impacts have also been grave. As part of efforts to assist the Federal Government to combat the virus, some of Nigeria’s biggest companies, and most notable business executives decided to donate money. They have donated a total of N25.8 billion as of April 17th, 2020.
Disgruntled Nigerians want their own donations
Nigerian banks have been particularly instrumental in this regard, having contributed a significant portion of the money. And while the government is very grateful to them, some of their customers are quite displeased. These customers cannot understand why the banks would rather donate to the government instead of crediting their bank accounts directly.
To be fair, bank customers have a good reason to be upset. In Nigeria, everyone has been adversely affected by the Coronavirus pandemic. Some people have even lost their jobs, with no immediate hope of getting replacements. Therefore, everyone needs some financial relief which hasn’t been forthcoming, unfortunately. So, it is very understandable for bank customers to expect some money transferred into their accounts by their banks. After all, the banks already have their customers’ account details and could easily send money across to them.
A Social Media backlash against banks
The banks’ “inability” to offer financial assistance to their customers have generated quite a lot of backlash on social media. Some customers even resorted to name-calling, describing the banks as insensitive to the plight of average citizens. They also wondered what the Federal Government is going to do with the billions that have been donated by the companies, even as some other people simply dismissed the donations as a hoax or “audio money.”
You guys don't love your customers … Am indoor starving and hungry .. I have just 300 naira note left with me .. why can't you guys credit my account pic.twitter.com/UNOeEuV0KP
— Fredtony (@Fredtony111) April 14, 2020
But there’s a good reason why donations are going to the FG
For most Nigerian companies, providing financial support to the ongoing fight against Coronavirus is probably the best Corporate Social Responsibility (CSR) initiative to undertake at this point. This is because not only does such a move position these companies as socially-responsible corporates, it also entitles them to some form of tax exceptions. Even Nigeria’s Minister of Finance, Budget, and National Planning, Zainab Ahmed, confirmed this in a recent interview with Arise TV.
Therefore, with CSR expenses being tax-deductible, the best bet for these banks is to donate Covid-19 relief funds directly to the Federal Government so they can better account for the expenses. It may be difficult for banks to get tax deductions if they just transfer money to their customers. While commenting on this, a Relationship Manager at Zenith Bank Plc who doesn’t want to be named, said the following to Nairametrics:
“Donating the money through the CBN is simply the most coordinated approach I can imagine. That way, it is easier for banks and other companies to account for how much they have spent on Covid-19 related CSR.
“Moreover, it could be problematic for banks to transfer money into their customers’ accounts because even though these banks have their customers’ account details, they may not really be able to target such donations at people who really need them. Just imagine that a customer has only N5,000 in his Zenith Bank account but has over N5 million in a different account with another bank. If you decide to transfer N20,000 to his Zenith Bank account based on the assumption that he is broke, he would end up shortening how much people who are actually broke would end up getting.”
Meanwhile, companies are sharing relief materials
It should also be noted that many companies have made efforts to provide relief materials directly to the Nigerians who need them. As a matter of fact, some of the banks that have already donated big money to the Federal Government have also procured and shared relief materials to the people. Examples of them are Wema Bank Plc, Zenith Bank Plc, and, many more. Nairametrics also recently reported that Eko Electricity Distribution Company and the Ibadan Electricity Distribution Company have distributed food and relief items worth millions of naira to residents of Oyo and Lagos states.