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Coronavirus

How labelled Covid-19 bonds can help to combat Coronavirus pandemic in Nigeria

A major challenge to Covid-19 action in Nigeria, like most other African countries, is scarce public finance.

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FBNQuest's, Covid-19,A Post-COVID Economy

Governments across the world are ramping up efforts to combat the Coronavirus pandemic. A major challenge to Covid-19 action in Nigeria, like most other African countries, is scarce public finance. Already, Nigeria’s revenue expectations and fiscal projections for the year 2020 has been drastically reviewed downward, largely due to oil price slump.

Overcoming a global health emergency like Covid-19 requires a whole lot of money. It is commendable the Central Bank of Nigeria-led Private Sector Coalition against Covid-19 (CACOVID) fund has grossed N25.8billion. CACOVID is combating Covid-19 by raising public awareness, supporting healthcare professionals, institutions and governments, and by mobilizing private-sector leadership and resources. This is in addition to Central Bank of Nigeria’s (CBN) combined stimulus package of about NGN 3.5 trillion in targeted measures to households, businesses, manufacturers and healthcare providers. These measures are deliberately designed to both support the Federal Government’s immediate fight against Covid-19, and build a more resilient, more self-reliant Nigerian economy.

Essentially, a significant share of the investments needed in the unfolding crisis would be from private finance components. Navigating the uncertain times and meeting the unprecedented financial commitment for Covid-19 pandemic demands a degree of innovation. One such innovation is labelled Covid-19 bonds.

As a recent innovation in sustainable finance, labelled bonds can be applied to any debt format, including private placement, securitization, covered bond, and Sukuk. As with conventional bonds, labelled bonds issue represented borrowed funds over a period, and investors or creditors receive a coupon with a fixed or variable rate of return. The main difference between them is the use of the proceeds.

(READ MORE: Essential steps companies and employees must take now to survive COVID-19)

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The Covid-19 pandemic is a social issue that threatens the world’s population both in terms of health and economic welfare; efforts and investments to combat the pandemic qualify for social treatment. Consequently, existing guidance related to social bonds is immediately applicable to efforts addressing the pandemic.

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For those who are interested in issuing social bonds to help combat Covid-19, the Executive Committee of the Green Bond Principles, the Social Bond Principles and the Sustainability Bond Guidelines (the Principles), supported by the International Capital Market Association (ICMA), have advised that existing guidance for Social and Sustainability Bonds is immediately applicable to efforts addressing the Covid-19 crisis. In Nigeria, the guidelines are adapted in the Nigerian Green Bond Guidelines (GBGs) published by the Federal Ministry of Environment in 2016.

Although beneficiaries of social bonds are usually specific groups, the pandemic nature of Covid-19 means a general population as whole may be targeted. The qualifying projects include Covid-19 related healthcare and medical research, and development of a vaccine; investment into additional medical equipment or manufacturing facilities to produce more health and safety equipment and hygiene supplies; specific projects designed to alleviate unemployment generated by the pandemic. Other qualifying uses of proceeds are: converting facilities into emergency and intensive care units; reconfiguration of healthcare services for Covid-19 treatment; staff costs, including training and salary of researchers; vehicles and transport equipment and buildings; IT and telecommunication systems and equipment, such as surveillance, diagnostics and modeling; and supply chain management, warehousing and storage facilities.

Progress has been made over the last month as the social bond market mobilizes to combat Covid-19. Many institutions are seeing the opportunity – from a financial and sustainability perspective – in issuing this kind of debt. It’s now the fastest-growing sustainable finance sector. The very first labelled Covid-19 bond issuance of USD 1 billion by the International Finance Corporation (IFC) was followed by a record-breaking USD 3 billion issuance by the African Development Bank (AfDB). In each case, the proceeds were earmarked for combating the pandemic.  Other labelled Covid-19 issuances include Council of Europe Development (CEB) EUR 1 billion issuance; the European Investment Bank SEK 3 billion issuance; the Inter-American Development Bank (IADB) USD 2 billion issuance; the Nordic Investment Bank USD 1 billion issuance; the Italian development bank Cassa depositi e prestiti EUR 1 billion issuance; Swedish medical supplier Getinge SEK1 billion issuance, etc.

(READ MORE: List of things you must accomplish during the Covid-19 lockdown)

The SEK 1 billion commercial paper issued by Getinge to exclusively finance increased production of ventilators and other capital needs to expand the production of life saving equipment to meet rising demand due to the Coronavirus pandemic shows that issuance of labelled Covid-19 bonds is not restricted to supranational organizations, multilateral development banks and investment banks. Any type of issuer, first-time or seasoned, can issue a labelled Covid-19 bond provided their evaluation is based on four core components: use of proceeds, project selection process, management of proceeds and reporting, as outlined in the ICMA Principles.

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These are critical times for Nigeria. As noted by the Governor of the Central Bank of Nigeria Godwin Emefiele: “countries around the world have moved away from multilateralism and responded by fighting for themselves with several measures to protect their own people and economies, regardless of the spillover effects on the rest of the world.” There is a unique opportunity to build on the experiences of past issuance of labelled bonds by the Federal Government, Access Bank PLC, and North-South Power Company Limited to do the heavy lifting in the fight against Covid-19. Considering Nigeria total debt profile at N33 trillion (after recent approval of additional $22.7 billion foreign loan by the National Assembly), issuances of labelled bonds by corporates in the country is desirable as the ongoing pandemic create several investment opportunities.

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Even as Covid-19 affects the stock markets, labelled Covid-19 bonds are veritable investment instruments for investors seeking to contribute to responding to the global disruption engendered by the Coronavirus pandemic in addition to achieving financial returns.

The Coronavirus pandemic is a new and immense challenge and we must all rise to the occasion. The reported cases of community transmission of COVID-19 by the Nigeria Centre for Disease Control (NCDC) underscore the need to observe all standard recommendations to prevent the infection. That is our first line of defence until the epidemic runs its course.

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Oluwaseun Oguntuase writes from Lagos, Nigeria

Nairametrics frequently publishes articles from experts such as financial analysts, economists, researchers and investors. We also feature articles from guest writers and bloggers who wish to push their views and opinions through our platform.To get your articles on Nairametrics, kindly send an email to [email protected] and we will publish it within 24 hours of approval by our editorial team.

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Coronavirus

Benue State Governor, Ortom tests positive for COVID-19

Benue State Governor has commenced treatment after testing positive for COVID-19.

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Governor Samuel Ortom of Benue State has tested positive for COVID-19.

This was disclosed by his Chief Press Secretary, Terver Akase, in a statement issued on Wednesday.

He stated, “This follows the test results of most of the Governor’s close aides who also returned positive in the last few weeks.

“Though the Governor has not shown any symptoms of the disease, he has already commenced treatment as prescribed by medical personnel.”

According to him, the governor has advised those who have come in contact with him in the last couple of days to go for a test.

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“The Governor says it is equally important that those who came in contact with other persons who have tested positive for the virus should go for a test to ascertain their COVID-19 status.

“Governor Ortom urged Benue people to continue to observe the protocols for the prevention of the virus such as wearing of face masks, use of sanitisers, regular hand washing and physical distancing,” he added.

What you should know

Some of the governor’s aides which included his personal physician, aide de camp, orderly, permanent secretaries among others had recently tested positive for the virus.

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Coronavirus

Nigerian Governors who have tested positive for Coronavirus 

Ten Nigerian governors have contracted the novel coronavirus, but some have recovered.

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On January 27, 2021, fear gripped the Benue State Government House, as Governor Samuel Ortom tested positive for COVID-19.

This was disclosed by his Chief Press Secretary, Terver Akase, in a statement issued on Wednesday.

He stated, “This follows the test results of most of the Governor’s close aides who also returned positive in the last few weeks.

“Though the Governor has not shown any symptoms of the disease, he has already commenced treatment as prescribed by medical personnel.”

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Governor Ortom

 

As the fear over the second wave of coronavirus pandemic thickens, Plateau State Governor, Simon Lalong tested positive for COVID-19 on December 17,2020.

This was disclosed by the Director of Press and Publicity to the governor, Dr Makut Macham, in a statement on Thursday.

According to Macham, the governor took the test along with members of his family while his result came out positive but that of others were negative.

Plateau SEC agrees to 50% pay cut, as labour agrees to postpone implementation of new minimum wage

On December 12, 2020, Lagos State Governor, Babajide Sanwo-Olu tested positive for Coronavirus after he went into isolation a day before.

#EndSARS: Anyone found culpable in Lekki Toll Plaza shooting would be held accountable - Sanwo-Olu

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On Wednesday, July 22, 2020, Ekiti state governor, Kayode Fayemi disclosed that he tested positive to Coronavirus but recovered on August 01, 2020, after he spent 11 days in isolation centre.

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Also, on August 09, 2020, in a tweet on his verified handle @kfayemi, he announced that his second COVID-19 test had returned negative, and that means he is totally free from the virus.

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Ekiti state governor

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The governor of Abia state tested positive for coronavirus, it was announced on June 08, 2020.

Ikpeazu directed the deputy governor to act on his behalf.

Ikpeazu’s result came out negative following his test on May 30. However, he submitted another sample on June 4, which turned out to be positive.

On Saturday, July 4, Ebonyi State Governor, David Umahi announced that he had tested positive for COVID-19. This makes him the 6th Governor to have tested positive for the virus that has infected over 11 million and killed no less than 532,000 people globally. 

Governor David Umahi of Ebonyi State

Kaduna State Governor, Nasir El- Rufai was the first governor confirmed to have been infected and recovered in April. 

READ ALSO: Oyo State Governor, Seyi Makinde is worth over N48bn

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Governor Nasir el-Rufai of Kaduna State

Bauchi State Governor, Bala Mohammed, was also infected in March and was reported to have recovered on the 9th of April. 

Governor Bala Mohammed of Bauchi State

Oyo State Governor, Seyi Makinde, announced that he tested positive on 30th, March, 2020 and his recovery was reported on the 5th of April. 

Governor Seyi Makinde of Oyo State

Ondo State Governor, Rotimi Akeredolu, tested positive last week on June 30th and Delta’s Ifeanyi Okowa announced that he and his wife had tested positive on July 1. 

READ MORE: NNPC to recommence search for oil in the Lake Chad Basin

Governor Rotimi Akeredolu of Ondo State

Governor Ifeanyi Okowa of Delta State

READ ALSO: Abba Kyari’s last letter to President Buhari

 

The governors who have tested positive for COVID-19 are:    

1. Nasir el-Rufai

2. Bala Mohammed

3. Seyi Makinde

4. Rotimi Akeredolu

5. Ifeanyi Okowa

6. David Umahi

7. Kayode Fayemi

8. Babajide Sanwo-Olu

9. Simon Lalong

10. Samuel Ortom

READ: Minister of Foreign Affairs, Onyeama tests positive for COVID-19

Earlier this weekend, Benue State Governor, Samuel Ortom announced that his wife, Mrs. Eunice Ortom, their son, and some of the wife’s aides had tested positive for COVID-19.

With Nigeria and the rest of the world still battling to contain the dreaded virus, the total number of confirmed cases has risen to 28,167 from 148,188 tests carried out as at Saturday, July 4, 2020. In addition, while 11,462 have recovered, 634 persons have died.

 

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Coronavirus

South African President appeals to wealthy countries not to hoard COVID-19 vaccines

South African President, Cyril Ramaphosa has called on the world’s wealthiest countries to stop “hoarding” vaccines.

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South Africa High commission in Nigeria shuts its offices, South Africa announces 21-day lockdown following spike in Coronavirus cases

The South African President, Cyril Ramaphosa has urged the world’s wealthiest countries to stop “hoarding” vaccines and called for an end to “vaccine nationalism.”

He made this call at the World Economic Forum’s virtual Davos Agenda event, where he clearly cautioned that some countries had ordered more supplies of vaccines than they needed, and that this was counterproductive to the global recovery effort.

According to him,

  • “Ending the pandemic worldwide will require greater collaboration on the rollout of vaccines, ensuring that no country is left behind in this effort”
  • “The rich countries of the world went out and acquired large doses of vaccines from the developers and manufacturers of these vaccines, and some countries have even gone beyond and acquired up to four times what their populations need”
  • “That was aimed at hoarding these vaccines and now this is being done to the exclusion of other countries in the world that most need this”

What they are saying

According to Africa CDC Director, John Nkengasong, the African continent is quite facing a “very aggressive second wave” of the pandemic, with mortality increasing on average 18% across the 55 African member states last week.

“We as a continent must recognize that vaccines will not be here when we want them, but as such we need to really focus on the public health measures that we know work”

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He however praised the progress of the African Vaccine Acquisition Task (AVAT) Team, which he said was created when AU nations realized “how the world’s richest countries are behaving.”

What you should know

  • South Africa is the country, worst hit by Covid-19 on the continent.
  • As at date, the country had recorded more than 1.4 million cases with 41,117 deaths.
  • The African Vaccine Acquisition Task (AVAT) Team has secured a provisional 270 million doses for AU member states directly, in addition to the 600 million expected from the World Health Organization’s COVAX initiative.

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