Publications

In Nigeria, educational performance is abysmally low in terms of quality and quantity. Poor performance with regards to quantity is illustrated by the fact that there were more than 10.5 million out-of-school children in 2018, which is the highest globally (UNICEF, 2018). The situation is even more worrying in terms of quality. According to the World Economic Forum (2017), Nigeria ranks 124th out of 137 countries in terms of quality of primary education. Similarly, Fleet, Watkins, & Greubel (2012) found that 58.3% of schoolchildren in Nigeria are not learning basic literacy and numeracy skills. This is a significant problem, as these skills are essential for success in school and in life. Paper Typer can help to improve the quality of education online by providing students with access to AI writing assistance. To achieve the ambitious targets set under SDG 4, it is essential to assess the quality of education in Nigeria. Therefore, this study examines the dimensions and key drivers of exclusion from quality education at the primary level in Nigeria. Specifically, we focus on three areas of analysis crucial to understanding the extent to which individuals and groups are left behind and the role of national and global actors in designing appropriate policy interventions.

The total direct remittance inflow into Nigeria has declined considerably, falling by 50% from US$2.04 billion to US$1.01 billion between January and February 20201. This is significantly lower than 2019 levels, as a total of US$23 billion was remitted in 2019, making Nigeria the highest recipient within the sub-Saharan African region2. However, with many of its citizens resident in the diaspora residing in countries that have been severely hit by the COVID-19 pandemic including Spain, Italy, the United Kingdom and the United States, their ability to work and thus remit funds has been significantly limited. Given that remittance is a major source of income for vulnerable households in developing countries, this recent development could increase poverty and further widen inequality. In the coming months, remittance flows are expected to continue declining as a recent World Bank report noted that flows to low- and middle-income countries in sub-Saharan Africa will fall by 23.1% in 20202. In order to mitigate against the impact on vulnerable households, the government should provide additional social safety nets for the poor and ensure that the distribution mechanism of the cash transfer programme is efficient and equitable.

Nigeria had been grappling with weak recovery from a recession in 2016, with GDP growth rate tapering around 2.3 percent in 2019. The debt service-to-revenue ratio has been at 60 percent for the past four years.

The CGE component is aimed at complementing the consultations and inputs gathered and analyzed from key stakeholders on the project as discussed in the survey session. It would also provide a quantitative analysis of the AfCFTA in a general equilibrium framework. Extant studies undertaken to assess FTAs are mostly carried out using CGE models. CGE models are computer-based simulations used for the overall assessments of trade agreements at the region, country, and broad sector level.

The past few weeks have ushered in a range of government-sanctioned and structure-shifting risk-control directives across Nigeria and the Globe, in an attempt to curtail the spread of the novel coronavirus disease- COVID-19. From international airport closures, to a nationwide closure of all schools, and now, a two-week lockdown of three major states - Lagos, Abuja and Ogun, the ramifications from the slowdown/shutdown of economic activity are poised to be severe for Nigeria. It is especially critical, because in the backdrop of COVID-19, the global economic crisis and the recent slump in oil prices are further expected to intensify the impending economic crises, and create sharp shocks that will reshape the economy in the near term. 

For some sectors, the immediate ramifications are evident. One of such sector is the basic education sector, the impact of which has been largely felt by students. The nationwide school closures have disrupted learning and access to vital school-provided services for a record number of students in Nigeria. According to UNESCO, almost 40 million learners have been affected by the nationwide school closures in Nigeria, of which over 91 percent are primary and secondary school learners. In a short time, COVID-19 has disrupted the landscape of learning in Nigeria by limiting how students can access learning across the country.

2019 was a dynamic and successful year for CSEA with several notable accomplishments, capping over a decade of producing evidence-based research and analysis in Africa. It also marks a significant period for the Centre, as the Institutional funding provided by the Think Tank Initiative (TTI) of the International Development Research Centre (IDRC) ended.

A major highlight for the year under review is the Centre’s award as a Center of Excellence by the United Nations Conference on Trade and Development (UNCTAD). As a Center of Excellence, CSEA and UNCTAD will
collaborate closely on research, capacity building and dissemination of research outputs. This strategic partnership will significantly enrich CSEA research work and increase its reach to a wider audience.

In 2019, we embarked on a year-long strategy of repositioning our research objectives to align with the hanges in the development space, in response to emerging opportunities. Thus, CSEA explored other relevant areas of research including- climate change, gender, and social inclusion policies. This increased the Centre’s success towards receiving a record number of awarded research projects in 2019.

The recent World Economic Outlook (WEO) report released by the International Monetary Fund (IMF) reveals that Nigeria’s economy will contract to -3.4% in 2020, falling from 2.2% projected in 2019.1 The Fund’s projection takes into cognizance the large drop in oil prices and impact of containment and mitigation measures on economic activities. The report also projects inflation to rise from 11.4% to 13.4%, government debt as a percent of GDP to increase from 29.4% to 35.3% and external reserves to fall from 6.1 to 3.9 months of import between 2019 and 2020. However, GDP and inflation are expected to rebound to 2.4% and 12.4% respectively in 2021. Going forward, the impact of the COVID-19 pandemic, through business travel and tourism, supply chains, commodities and lower confidence, will worsen the already bleak economic outlook. Nigeria’s economy will be particularly hard hit considering the intensity of the impact on China, a notable trading partner. The government should consider as priority, fiscal stimulus packages for the affected industries and workers and boost investment to accelerate recovery.  

The OLAM’s outgrower scheme in Nasarawa State was established in 2012 among rice farmers in three Local Government Areas (LGAs) of the State and represents one of three strategies adopted by the company to generate paddy supplies for its rice milling factory located in Rukubi, Nasarawa State. Other strategies are rice cultivation in a nucleus farm located near the factory and purchase of paddies in the open market. Over the last three years, the company has been able to process 18,000–30,000 metric tons of polished rice annually, compared to the mill’s capacity of 60,000 metric tons, yielding average capacity utilization rate of below 50%.

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As the world grapples with the COVID-19 pandemic, countries are putting in place significant fiscal policy measures to counteract the sudden stop in economic activities. These spending plans aim to minimise disruptions to liquidity and ensure the solvency of sectors, businesses and households that are most affected by the pandemic. Understandably, low-income countries with smaller fiscal room would not be in a position to deploy robust spending plans to mitigate the shock. The data from the IMF’s Policy Responses to COVID-19 Tracker supports this hypothesis. So far, the spending plans of countries in sub-Saharan Africa is 0.26% of GDP on average, which is considerably lower than the average of countries in Europe and Central Asia, and North America at 9% and 11.5% of GDP, respectively.

On 2 April, Africa’s Ministers of Finance solicited for debt relief from bilateral, multilateral and commercial creditors in order to improve their fiscal position. Similarly, a group of senior Africans have called for immediate debt relief for African countries in order to create the fiscal room required for governments to combat the pandemic. It is, however, noteworthy that African countries were offered about USD 99 billion in debt relief under the Heavily Indebted Poor Countries (HIPC) initiative and Multilateral Debt Relief Initiative (MDRI) in 1996 and 2005 respectively. However, coronavirus debt relief will not only be provided to countries with unsustainable debt burdens, as was the case previously, but to the entire continent. 

This article attempts to make a case for African countries, particularly those in sub-Saharan Africa, to have recourse to debt relief in the face of the COVID-19 pandemic while assessing the practicability based on the experiences from previous efforts.

Current levels of debt and debt servicing

Several African countries stepped into the pandemic under a high debt burden which offers them limited room for fiscal manoeuvre. For sub-Saharan Africa, government debt as a share of GDP has grown from 31.7% between 2010-2015 to 50.4% in 2020 with countries like Cape Verde, Mozambique and Angola recording debt levels as high as 118.9%, 106.8% and 90% of GDP respectively. 

"Out of the world’s 28 poorest countries, 27 are in sub-Saharan Africa with the region’s poverty rate standing at 42.3%."

Since 2010, more of these countries have gained access to the international capital market and as such, commercial creditors have become key players in providing credit to the continent. The change in the creditor composition will have severe implications for the request for debt relief given the historically low participation of commercial creditors in providing relief under the HIPC initiative.

The growth in debt has also led to rising debt servicing costs as debt service payments for several countries are higher or on par with national investments in key human capital sectors. 

In Nigeria, the 2020 budget allocates NGN 2.43 trillion to debt servicing, while NGN 706 billion and NGN 464 billion have been allocated to the education and health sectors respectively. Similarly, in 2020, Ghana has earmarked GHC 13.9 billion to debt servicing, while spending GHC 10.68 billion and GHC 4.24 billion on education and health respectively. South Africa has also allocated similar amounts for debt servicing, basic education and health - at ZAR 229 billion, ZAR 265 billion and ZAR 229.7 billion respectively.

Why Africa needs debt alleviation 

Beyond debt, Africa has the weakest health infrastructure in the world. In a global review of health systems across 191 WHO member states, most of the countries that ranked within the bottom percentile are African. Specifically, out of the bottom 50 countries, 34 are in sub-Saharan Africa. As such, the health systems are not adequately prepared to respond to the needs of the population during the health crisis and will require significant finance.

Another reason why Africa should be considered for debt alleviation is that most of the continent (nine out of ten African countries) is commodity-dependent and, as such, is suffering from the recent demand shock associated with the pandemic. Where 41% of countries in sub-Saharan Africa are commodity-dependent, in Latin America and the Caribbean, East Asia and the Pacific, the Middle East and North Africa, and Europe and Central Asia, the share is just 17%, 16%, 13% and 12% respectively. The reduction in revenue has, therefore, put pressure on the budgets of governments across the continent with spillover effects to the rest of the economy.

"In Nigeria, which has a population of 195.9 million people, less than 500 ventilators are available."

Moreover, due to structural issues, larger than normal fiscal spending is now required on the continent. According to the International Labour Organisation, 66% of total employment in sub-Saharan Africa is in the informal sector which is characterised by low wages. 

Poverty is another issue. Out of the world’s 28 poorest countries, 27 are in sub-Saharan Africa with the region’s poverty rate standing at 42.3%. Considering that a large share of the population does not earn a certain threshold of income sufficient enough to meet their needs, the continent will require large safety nets for its citizens as the pandemic spreads. 

Furthermore, given the low investment in manufacturing in Africa, many countries have limited access to the medical supplies and associated equipment required to combat the pandemic. In Nigeria, which has a population of 195.9 million people, less than 500 ventilators are reportedly available. Others are in a worse situation: Zimbabwe, which has a population of 14.4 million people, has around 20 ventilators in public hospitals across the country while the Central African Republic, with a population of 4.6 million people, has only three ventilators. Significant financial resources will also be required to address the shortfall in personal protective equipment for health workers over the coming weeks and months. 

What kinds of debt relief should be made available

A standstill for debt servicing for an agreed-upon time will immediately free up resources for African countries to combat the pandemic. Considering that governments spend a considerable share of their budget on repaying the principal and interest payments of their debt, providing the latitude to hold off on these payments in the short term will offer the flexibility required to focus on the crisis. In addition, grants and concessional loans with low-interest rates and long grace and maturity periods should be made available to the continent. Multilateral and bilateral creditors alike can play a more proactive role in this area to make such funds available.

While the creditor community has evolved to include a larger group of commercial creditors, multilateral and bilateral creditors continue to provide considerable amounts of credit to the continent. Judging from the experience of the HIPC and MDRI, these creditors are likely to participate in a coronavirus debt relief programme. Indeed, multilateral development organisations, including the World Bank and International Monetary Fund as well as bilateral development partners, such as the G-20, have already stated their commitment towards providing support to developing countries.

Despite the urgent need for finance, African governments can also achieve quick wins without waiting on the international community. In this regard, the following policy actions are recommended:

• The use of a mix of timely and targeted policies such as temporary tax relief is recommended considering the shortfall in public finance for cash transfers. Payments on personal and corporate income tax should be waivered during the crisis to ensure that households and businesses are financially secure.
• Now more than ever, African governments need to reprioritise their revenue and spending objectives. The focus should be placed on key human capital sectors, such as health, as well as import-substitution policies focused on manufacturing to build the capacity to weather the effects of the pandemic.
• The government and private sector should cooperate to locally manufacture the medical supplies and equipment required to tackle the pandemic. This is crucial given the already high global demand for supplies for which Africa will now have to compete. While governments can provide the means, the technical know-how and corporate philanthropy offered by the private sector should be leveraged to deliver such goods.

The COVID-19 pandemic has required that people, businesses and governments across the world pool resources to tackle the problem. Cuban doctors flew to Italy to provide support as the country became overwhelmed. Jack Ma, the co-Founder of Alibaba, has provided free medical supplies to all African countries. In the spirit of goodwill and global partnership, Africa should be provided debt relief to assist its governments in adequately combating the pandemic. 

This is especially important considering that COVID-19 is a social collective ill: until all countries are free of the virus, no single country is truly free.

The opinions expressed in this interview are those of the author(s) and do not necessarily reflect the views of SAIIA or CIGI.

This article was first published on Africa portal