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Weathering the Storm COVID-19 and the Case for Universal Basic Income in Nigeria

In Nigeria, health facilities in urban slums are few and far between, and likely to be overwhelmed if the virus spreads into these communities. Enforcing lockdowns will not be sustainable if governments do not provide a generous safety-net.

As the novel coronavirus ravaged China, Europe, the United States, and other parts of the world, many Africans expressed scepticism about the existence and severity of the virus. Across the world, the pandemic continues to highlight deepening inequality and socioeconomic disparities within societies. Several countries were ill-prepared for the pandemic, which has called for an introspective approach from developing countries including Nigeria. 

According to the Nigeria Centre for Disease Control (NCDC), there were about 12,486 confirmed cases in Nigeria as of 7 June 2020. Although government has commissioned new isolation centres in some states, the pace of testing is still very slow in Nigeria compared to other African countries like Ghana and South Africa. This highlights the low level of preparedness and severe strain on the health care system that Nigeria faces. 

According to researchers, Stephen Parodi and Vincent Liu, containment and mitigation are two responses to an infectious outbreak. The containment phase involves isolating and treating identified cases with effective contact tracing while mitigation focuses on ‘social distancing’, ‘lockdowns’ and other measures that ensure the population is at a reduced risk. In Nigeria, the first known case was from an Italian on a Turkish flight to Nigeria and while the case was effectively contained through contact tracing measures, authorities did not sufficiently consider policy measures to curb the further spread. For instance, many senior political figures went to high-risk countries, came back without being quarantined at points of entry (as in Ghana and Uganda) and went about daily activities, which led to a further spread of the disease and panic. News about their travels—and in some cases infected status—broke out on social media, creating hysteria and more discussions around the politics of COVID-19 testing in Nigeria. The biggest question centred around who gets tested and how many people get tested in a country with vast inequalities like Nigeria, where test kits are scarce and government officials and their wealthy friends who may have had contact with positive colleagues get preferential treatment. 

Inequality and COVID-19 Responses

To mitigate spread, as of May 2020, several developing countries had ordered partial or total lockdowns. South Africa deployed the army to help enforce a lockdown; Ghana imposed a lockdown on two of its largest cities, while Côte d’Ivoire and Senegal both declared states of emergency. These decisions are possible ways to slow the disease but may not result in eliminating the spread entirely. Minimizing contact with others is the principal way to protect oneself and others from the coronavirus and the CDC maintains that six-foot physical distancing decelerates the spread of the disease to controllable levels.

For innumerable reasons, physical distancing seems to be a convenient option for people of means and reflects the deep economic disparities COVID-19 did not create but certainly amplifies. While this approach has been lauded, it is still not sufficient. In Nigeria, there is still a lack of capacity and not enough equipped hospitals to effectively respond to rising infections. Furthermore, there are delays in ramping up testing, which reflect another socio-economic gap. People are only being tested when they show symptoms even as several people may be asymptomatic and still act as carriers. Although testing kits are scarce globally, South Africa initiated a screening programme where 10,000 field workers visit people’s homes to administer tests in urban and rural areas. 

Currently, the leading approach to reducing transmission in the worst-affected locations is enforced self-isolation. However, there is a limited amount of isolation Nigerians can afford before mortality is linked to other sources such as hunger. Based on global poverty model estimates, close to half of the population (48 per cent) in Nigeria live in extreme poverty, with a large urban-rural differential (63 per cent versus 36 per cent). Furthermore, about 72 per cent to 91 per cent of Nigeria’s poor are at risk of spending their entire lives below the poverty line. 

Isolation, especially among the poor, can exacerbate the prevalence of poverty and its effects in Nigeria. Owing to the highly informal structure of the economy, millions of Nigerians live on daily wages. A day without trade essentially means no food for entire households. 

The pandemic and the privilege associated with isolation puts into focus inequality, food insecurity and global access to healthcare. This is especially so for workers in the informal sector or people who live in informal settlements, with no basic income, social safety nets, healthcare, or social capital to rely on.

Nigeria is rapidly urbanizing, with more people moving to cities at an accelerating pace. Nigeria’s prospects of achieving the Sustainable Development Goal 11 (SDG11), which aims to ‘make cities and human settlements inclusive, safe, resilient and sustainable’, looks unlikely to be fulfilled, given a preponderance of urban slums and informal settlements. These slums and settlements are usually overcrowded and had been considered unhygienic even before the outbreak of COVID-19.

Lagos was formerly the capital city before the seat of the national government was moved to Abuja. Lagos’s status as both federal capital and economic nerve centre attracted mass internal migration and created several slum dwellings, a development that continues to this day. For instance, Makoko in Lagos has an estimated population of 300,000 with many homes built on stilts in a lagoon. Abuja has its share of slum dwellings, including settlements in Garki village, Lokogoma, Mpape, and Nyanya. Studies from earlier epidemics reinforce that slum dwellers living in overcrowded environments with poor hygiene, sanitation and limited supply of clean water are at the highest risk of infection and they usually have limited access to healthcare to begin with. 

In Nigeria, health facilities in urban slums are few and far between, and are usually short-staffed, debilitated, and likely to be overwhelmed if the virus spreads into these communities. Enforcing lockdowns will not be sustainable if governments do not provide a generous safety-net. In the absence of safety nets, it is important that the people are carried along in the planning and implementation of mitigation strategies. This allows them to have a voice and give their consent to the proposed solutions. The private sector needs to be supported with some form of incentives to avoid laying off staff, and workers in the informal sector need cash to keep the wolf from the door at this time. 

Rights and Social Justice in a Pandemic

To effectively reverse the social injustice of structural disparities and sufficiently meet the needs of the poor, pandemic mitigation efforts need to address health inequalities. Some ways to enhance social justice at this time include prioritizing the vulnerable (the elderly in particular), supporting small scale businesses and ensuring the universal access to financial support. 

However, the unavailability of universal basic income and social protection strategies in Nigeria puts the poor at risk. When people lack access to health care services, the virus may spread more easily. Apart from the structural factors that place urban slum dwellers at risk, pre-existing health conditions because of the lack of precautionary care and health education is an exacerbating factor. 

Social protection, poverty reduction, and the role of the state in development have been on the front agenda in discussions around universal basic income (UBI). UBI is considered to be a potential solution to poverty and the changing income patterns. However, social insurance coverage in Nigeria has been recorded to be very low (approximately 10 per cent of the labour market ), with little progress made in the past decade.

Also, health-system financing for universal health coverage in Nigeria is characterized by meagre health insurance penetration and out-of-pocket payments. Fewer than 5 per cent of Nigerians have health insurance coverage, with the majority of enrollees coming from the formal sector and very pitiable coverage in the informal sector. This has serious health consequences and is a significant public health risk. 

Federal and state governments in Nigeria, as well as development partners (UNICEF, World Bank, ODI), have realized the need for financial incentives for improving health outcomes. The aim is to increase the utilization of health and social services in Nigeria, using approaches from other developing countries to bridge access to services, thereby reducing inequality. As such, there are several programmes in Nigeria, such as: the National Home Grown School Feeding Programme (NHGSFP), the Care of the People programme (COPE), the Subsidy Reinvestment and Empowerment Programme (SUREP) and the Enterprise and Empowerment Programme (GEEP). These programmes have not been without controversy; some beneficiaries have complained about inconsistencies in cash transfers; moreover, studies have noted structural barriers in the administration of these programmes. 

Despite these cash transfers and financial incentives given to targeted groups of people in Nigeria, there is still a prevalence of vulnerability in the country. Poverty also intersects with socio-demographic factors such as age, ethnicity, gender, and place of residence. For cash transfers, issues around flawed targeting have been raised where cash transfers are given to those who are not poor, thereby excluding the most vulnerable, such as the elderly or disabled.

COVID-19 and Universal Basic Income

Due to the challenges associated with conditional cash transfers, universal basic income has gained supporters as it allows for cash to reach everyone in the population with no compulsory conditions attached. UBI consists of some important features: universality, individuality, un-conditionality, and permanence. UBI has been proven effective in poverty reduction, school attendance and completion, and prevention of child marriage. Results from studies on UBI in India, Namibia and Uganda also highlighted beneficiaries’ sense of responsibility and absence of stigma effects. 

The goals of UBI include cushioning the effects of job losses, which may be unavoidable during a pandemic, as well as poverty reduction. Although the idea of a UBI has gained much currency among policymakers in Nigeria, the COVID-19 pandemic offers policymakers the opportunity to consider a new approach to UBI—a grant given to everyone in the population with no strings attached, in order to close inequality gaps and provide access to basic needs. This could be achieved by governments’ use of expansionary fiscal policy or monetary policy. 

The majority of the ground-breaking literature on funding UBI comes from the developed world and there is a paucity of studies focusing on funding mechanisms for UBI in developing nations—except for the use of external funds, which has been documented in Kenya and Uganda. However, to implement UBI in Nigeria, it is important to determine: the amounts of cash the government is required to give; how funds will be disbursed to beneficiaries; and the long-term sustainability of the scheme. 

Despite the absence of UBI in several countries, Nigeria can learn some relevant lessons from developed countries. Recalibrating existing tax and benefit systems is one way some countries have funded UBI programs but this may not be effective in Nigeria because of the substantial amount of economic activity that goes on in the informal sector. Majority fall outside the tax bracket in Nigeria because the government has no income data for these people. These are challenges associated with the accurate measurement of poverty, though Nigeria can still use indicators in national surveys and small-scale surveys to predict income. Predicting income allows the government to decide on the eligibility of benefits. 

Another alternative for funding the UBI in Nigeria is to eliminate all existing conditional cash transfers and replace them with a basic income which is unconditional. On a basic level, this would reduce administrative burdens as having just one scheme is easier to monitor and evaluate than maintaining several concurrent schemes. This approach would also make it easier to embed UBI funding within existing budgetary allocations. Additionally, the role of the private sector cannot be over-emphasized. Involving the private sector in financing the UBI through public-private partnerships is one way of ensuring the long-term continuity of the initiative. 

Some necessary solutions that may help bridge the inequality gap include increasing social protection, improving access to better hygiene facilities and leveraging the power of the private sector. The government can make protection systems like subsidized health coverage more readily available by using an allocated budget for universal health coverage. Doing this will reduce financial barriers to healthcare, making health services affordable and accessible to all citizens. State and local governments can also ensure that informal settlements and high-density public places have access to safe drinking water and hand-washing facilities. This involves ensuring public spaces have hand-washing facilities and sanitizers along with hygiene messages particularly in crowded areas such as markets and bus stations. This is currently being done in South Africa where the Department of Human Settlements, Water and Sanitation has decided to increase the provision of water and sanitation in high-density public areas, informal settlements, and rural areas in response to the novel coronavirus.

The role of the private sector will be critical in contributing to the resilience of communities in handling the current pandemic. The private sector can support communities using low-cost innovations to promote provision of WASH facilities and services, as well as the provision of free or affordable hand-sanitizers and soap, among others. This is already happening in Nigeria but consistent support from the private sector will go a long way. 

Weathering the Storm

Pandemics do not happen often but when they do, they exacerbate existing inequalities in the society. Nigeria can effectively weather the storm of COVID-19 and future pandemics if it adapts a universal basic income and an inclusive health policy. To guarantee sustainable population health, interventions should ensure that necessary drugs and vaccines are affordable to everyone, regardless of social status. But a bold stroke like this needs to be accompanied with a healing hand for the economically and socially disadvantaged. A good way to start is by ensuring that COVID-19 vaccines are free to everyone and that everyone gets a universal income. 

Opponents of UBI say it is not a magic bullet and they may be right because its success will depend on Nigeria’s economic growth, political will and fiscal capacity. A move towards social and political cohesion can better strengthen the possibilities of a truly universal healthcare system, where access to healthcare becomes an irrefutable human right for everyone in Nigeria

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