By Tolu Oyekan
As of this writing, the spread of COVID-19 in many African countries has been more contained, and the death toll lower, than some had expected in 2020.
The economic fallout of the pandemic for Africans, however, will be different and could be direr than for the rest of the world.
Sub-Saharan Africa accounts for more than half of the world’s populations living at or below the poverty line. A recent World Bank scenario estimates that COVID-19 could push up to 40 million people in Sub-Saharan Africa into extreme poverty, seriously eroding the progress that African countries have made to reduce deprivation during the past two decades.
When the pandemic was declared in April 2020, BCG counselled African governments to develop comprehensive plans in response to the health care crisis and take on broader economic and societal challenges.
We continue to believe that the best course for African leaders is to accelerate economic policy reforms and investments that accentuate inclusion and position countries for a stronger post-pandemic recovery.
Indeed, Africa’s economic recovery from the COVID-19 crisis depends on how effectively governments will be able to balance urgent actions to stabilize economies with the structural reforms needed to stimulate sustainable economic development initiatives. An inclusive approach to economic recovery can protect the most vulnerable populations in the short term and improve their prospects in the long term. Select initiatives in Nigeria present a case in point.
The Pandemic’s Economic Fallout in Nigeria
Nigeria is the largest economy in Africa and one of four African countries included on BCG’s Middle Billion list of rapidly transforming developing countries where local entrepreneurs attract global investment, especially in emerging tech-driven industries.
Yet, almost 83 million people—40% of the country’s population—live below the country’s poverty line of $381.75 per household, per year, according to the 2018–2019 living standards survey by Nigeria’s National Bureau of Statistics (NBS).
World Bank 2021 projections for Sub-Saharan Africa as a whole warn of protracted economic flux throughout the year. Even with a modest rebound from recession, there is a risk that a steep drop in per capita income could push tens of millions more people into poverty.
South Africa and Nigeria, the continent’s most populous country, face the most severe setbacks, according to the projections. Lower oil prices, combined with pandemic-related factors, add to the strains on Nigeria’s economy and the risks for its most vulnerable citizens.
These concerns prompted the Nigerian government to undertake a wide range of activities to stimulate economic growth with a focus on economic inclusion. Specifically, Nigeria aims to leverage public-private partnerships to create economic opportunities for marginalized populations.
In June 2020, Nigeria’s government revised its economic sustainability plan to double down on stimulus investments and policy interventions in order to revive the growth of bedrock industries (such as oil, tourism, and aviation), and accelerate growth in emerging businesses in other industries (such as small and midsize enterprises and alternative energy) that promote economic inclusion and opportunity.
Specifically, the government is focusing on expanding mobile smartphone service, digital financial services, and home-based solar electricity for low-income households.
Mobile Money and Telcos Connect
Using cash and paying bills in person have historically been the norm, especially among the unbanked populations. This has changed since COVID-19. From the early days of the pandemic, leading contactless payment startups in Nigeria launched initiatives to encourage consumers and merchants to sign up for their services. As BCG has written, financial institutions in Africa were the first to introduce mobile payments.
In Nigeria, the push for cashless transactions has prompted mobile money providers to leverage the networks of telecommunications companies in order to sign up mobile money customers. This is important because most poor Nigerians own a cell phone, but they don’t have a bank account.
The percentage of the adult population with access to financial services in Nigeria grew at a compound annual growth rate (CAGR) of 6% from 2008 to 2012 but by only 1% from 2012 to 2018, according to an annual survey by Enhancing Financial Innovation & Access, a financial-sector development organization. This low rate persisted despite meaningful reforms implemented by the Nigerian government before the pandemic to accelerate financial inclusion.
In 2018, for example, the government issued payment services guidelines for financial service providers and telcos seeking to expand their customer bases among the unbanked, especially in rural areas. However, it took some time for the Central Bank of Nigeria (CBN) to issue the licenses that telcos need to operate as a payment service bank (PSB).
In August 2020, the CBN licensed three new PSBs, which can now offer high-volume, low-value digital transaction services, such as remittances, microsavings accounts, and withdrawals. Extending the reach of mobile banking services to rural unbanked populations could also allow the government to deliver social welfare benefits directly to those citizens’ bank accounts.
Pay-as-You-Go Solar Service
The Nigerian government is aiming to install new home solar power systems and mini-grids for 5 million low-income households by the end of 2023.
Many of those households—which either rely on small, inefficient generators for electricity or have no power source at all—will need to use PAYGo, an instalment financing option offered with mobile money bank accounts, to purchase the installation kits for these systems. Customers with an existing mobile money account may apply and qualify for a PAYGo loan more easily than others.
Our analysis shows that a PAYGo loan would make solar kits affordable for about half of the 31 million households that do not have reliable electricity and may also be considered to be in a low-income bracket.
What’s more, we found that 3.2 million out of 17 million households currently using kerosene and candles as their lighting source could afford the monthly PAYGo payments based on their current spending on lighting, plus about 10% of their nonfood budget.
We expect that the scaling of mobile money accounts, along with home solar power kits financed with instalment loans, will have a sustained economic impact on low-income populations well beyond any 2021 recovery.
A recent USAID research brief estimates that 15% to 30% of PAYGo solar customers will create a credit history for the first time when they purchase a solar home system with a PAYGo plan. That credit history could, in turn, lead to other loans for large expenses, such as school fees, which can consume up to 40% of a family’s annual income. Credit histories are also a critical driver of growth for small-business enterprises and first-time business entrepreneurs.
The USAID brief also noted advantages for providers: PAYGo solar customers generate more than twice as much revenue per user for a mobile money provider than the average customer.
A Stronger Recovery and Future
While increases in poverty and economic inequality are possible, they are not inevitable. As we see it, the economic hardships caused by the pandemic give governments a chance to examine the strengths and shortcomings of past policies and strategies and address the current structural inequities in their economies.
Linking economic inclusion initiatives across several industries could also have positive, and enduring multiplier effects. Time will tell whether Nigeria’s inclusive recovery plans succeed. All African governments, and the policymakers who are working with them, must look beyond the crisis to ensure that the resources deployed today build a better foundation to achieve a more equitable future.
Tolu Oyekan is a partner in BCG’s Lagos office. He leads the firm’s work on total societal impact across West Africa and is a core member of BCG’s Corporate Finance & Strategy practice
Feeding the Present and Future Nigerians: The Role of Government, Businesses and Society
By Timi Olubiyi, PhD
Undoubtedly, the demand for more food consumption is the case globally, mainly due to the increasing population year on year.
One of the extreme challenges that Africa faces particularly Nigeria is that of feeding its growing population amidst other perennial issues.
Consequently, this makes hunger, undernutrition, and food insecurity prevalent across the continent despite government agriculture and food business sector supports. Without mincing words, food insecurity might worsen if the population continues to grow and a corresponding reaction to arrest the situation is not in sight.
In Nigeria, each year the country losses and wastes a substantial portion of its total food production which is never preserved despite hunger and undernutrition that exist. One of the key reasons is that food loss and food waste continue to grow without any significant intervention by the government or businesses.
The magnitude of food loss and waste (FLW) is undeniably common and high in the country along the food supply chain, particularly from the North to the South of the country.
The loss and waste problem have been neglected for so long and the last few years have witnessed a consistent increase as a result of heightening insecurity, movement, and transport restrictions due to the novel coronavirus (COVID-19) pandemic, street trading, open animal grazing, decrepit infrastructure, illiteracy, inconsistent power supply, environmental pressure, lack of innovation and climate change.
Though food loss and waste are a global problem, it appears it is more prevalent in Nigeria now with the current realities. Therefore, persistent food loss, and food waste amid starvation should not be overlooked, this piece should trigger a wake-up call.
While I agree that both “food waste” and “food loss” signifies the food portion that is wasted and not eaten, the terms are different but often use interchangeably.
Painfully, both are damaging to the economy, businesses, households, and the well-being of the populace. The fact is food loss and waste are quite different anyway in terms of origin and scope and the true difference lies in exactly where the waste occurs.
According to literature food loss typically takes place at the harvest, storage, transportation, and sometimes at processing, and distribution stages in the food value chain. Staggeringly, in Sub-Saharan Africa, post-harvest food losses are estimated to be worth the US $4 billion annually – or enough to feed at least 48 million people, this is a disclosure in a report by the Food and Agriculture Organization (FAO) of the United Nations. In my opinion, the large chunk of this may likely be from Nigeria, considering the population and economic size of the country in Africa.
Further findings in the report indicated that some of the leading causes of food loss are poor storage, insecurity, loss during transportation, insufficient and inefficient agro-processing skills among smallholder farming communities, and lack of innovative approach to preservation, and insufficient infrastructure.
It is not out of place to mention that with the current realities particularly with the disruptions occasioned by COVID-19 and increasing insecurity, food waste must have increased exponentially in the last two years. Indicating a major barrier to food security and development in the country and this obviously requires attention.
On the other hand, food waste” refers to the food that is of good quality and fit for consumption, but does not get consumed because it is discarded―either before or after and it is left to spoil. Surveys of families in Lagos State the economic capital of the country to understand the causes of food waste elicited packaging and preservation as a key aspect of the problem. One of the root causes of food waste is a lack of power and some restaurants equally mentioned lack of proper packaging techniques. It was easy to conclude from the survey that food waste occurs at various stages of the supply chain due to a lack of constant power and adequate packaging.
Though funding and investing in agriculture or the food sector can improve food security and promote sustainability, in my opinion, improved food sufficiency can be achieved by considering the reduction of food loss and food waste. This can be a more effective and cost-saving strategy for a developing economy like Nigeria at this time. Because when food is lost or wasted, all the resources that are used to produce the food, including water, land, power, labour, and capital, are also wasted. So, a reduction in loss or wastage will more than likely reduce wasted resources and increase profits along the food supply chain.
To address this prevailing huge problem, businesses and the government must result in policy responses to enhance storage, cooling technologies, and packaging for the preservation of perishable foods and to lengthen food shelf lives.
The good news is that there are a variety of ways to prevent food loss and waste throughout the supply chain, for example, investment can be made in the importation of cooling and refrigerated trucks for transportation of perishable fruit and vegetables. Farm produce such as tomatoes, plantain, or even catfish can be preserved with the cooling system from the farms directly to urban businesses or consumers, thereby reducing food loss and increasing fresh produce availability in the country.
Furthermore, innovative smart food packaging and smart sensing technologies for monitoring food quality can be also be introduced for the sustainability of high-quality standards and improved product safety.
These are lines of business opportunities for investors to explore or for the attraction of foreign direct investments(FDIs). Sincerely, the government, businesses, and decision-makers need to target investments deliberately in the food supply value chain because opportunities are bound. The government also needs to create incentives to boost efforts to reduce food losses by businesses and smallholder farmers.
In conclusion, no single solution can tackle this whole issue but having an innovative mindset, can get the government, businesses, researchers and the populace started.
In fact, reducing food wastage will strengthen and enhance general food security in the country. Indeed, investments in training, technology, digital agriculture, innovation, and behavioural change are key to reducing food loss and waste. Therefore, innovative initiatives in the agriculture sector should be encouraged because it will create more job opportunities and also improve urban-rural migration, increase food exports, and reduce food imports. Good luck!
How may you obtain advice or further information on the article?
Dr Timi Olubiyi is an Entrepreneurship & Business Management expert with a PhD in Business Administration from Babcock University Nigeria. He is also a prolific investment coach, seasoned scholar, Chartered Member of the Chartered Institute for Securities and Investment (CISI), and Securities and Exchange Commission (SEC) registered capital market operator. He can be reached on the Twitter handle @drtimiolubiyi and via email: firstname.lastname@example.org, for any questions, reactions, and comments
Christianity, Economics, Politics & Why Education Does not Work
By Nneka Okumazie
There are at least two guarantees of most education – procedure and profile: a procedure that shows how to reach an outcome and a profile that shows that the procedure was passed. There are other possibilities with education, but many get through both destinations and park.
There are lots of places around the world, developed and developing, where people rail about education quality or inefficiency. But, maybe those aren’t the ways to look at education if procedure and profile are achieved.
Looking broadly at education – there are 3 Fs to consider: fiction, fusion and fission.
There are many things anyone can read, learn or be taught but not understand. There are things that are real that can be explained but would seem like fiction to many.
It is possible to explain how telecommunication works to anyone, but many may not get the concept of waves. It is possible to see rockets and explain the science to many but would be too complex to understand.
There are lots of new technologies, advances that people can be told about and shown, but would remain as fiction to them.
There are people who learn many procedures, get the profile, but remains fiction to them.
Knowledge – in general, is fusion, information coming together to become a unit or adding new units to existing.
Procedures – are a fusion of stuff. Fusion is common, happens often and can be informal.
Fission is the hardest and rarest of education.
Though people have spikes of fission on some aspects of what they have learned at some point, splattering and effervescing of extraordinary magnitude is the origin of major paths of advances through time.
It is true that many advances take years with continuous tests and efforts, but the intellect of fission does much at any time in the process.
Thinking about one thing and having several spectrums of it – towards accuracy is the height of the result of learning that the world needs more of, but gets less and less of.
Quality of education may guarantee some fission, quality of tutor, sources, or mentor may try, but sometimes, it is either innate or something electrifies at some point.
Intellect fission results in hyper passion, courage, etc. different from those possessing procedural education that have to passion – [positive or negative] or courage – [positive or negative].
There are people with passion against something who don’t know much, only swinging around procedural knowledge.
There are others too, with some courage to hate, for wickedness, greed, factionalism, etc. that have procedural education, but not intellect fission.
They may get information, but they are not the intellect of fission for progress.
So how is intellect fission achieved?
How is it possible to learn something and the immanent mind reams, flips and sprawls it towards what others cannot just see?
Maybe focus on how fission intellect.
As progress has glided in the world, so have troubles.
There are solutions and answers needed that education of fission would have provided, or education to spark fission.
But because profile education or stage is in demand – there is less and less care for the education of fission.
Many positions are filled with people who have profiles, but unlikely to move anything forward.
Though some curiosity, observation, creativity, analysis, understanding, great memory and insights may be results of some fission – but just like rungs of a ladder, difference abounds per reach and height.
Criticism is mostly a procedure. Deceit is a procedure. Getting rich is mostly procedural as well.
There are many things that are procedures – input and output.
[Proverbs 20:13, Love not sleep, lest thou come to poverty; open thine eyes, and thou shalt be satisfied with bread.]
Christianity, Government, Ideology, Dumbness & Politics
By Nneka Okumazie
Is falling for false information dumbness or a factor of human limitation? Assuming this, in the most difficult to verify situation suggests human limitation, there are limitless amounts of things that people fall for – signifying dumbness.
It is easy to get people provoked, happy, moody, emotional or whatever expression is desired, by characteristic twists or turns for those outcomes.
It is almost impossible to be smart all the time. It is rare to be smart most times, but it is possible to be dumb most times – with few flashes of smartness.
Dumbness is probably the nucleus of behaviour – with smartness as the shells. Dumbness pulls many but smartness takes work.
Dumbness sometimes is the default of thoughts, sight or other senses. If it appears or speaks like this, it means this; if it acts or moves like that, it is that – without question.
It is far easier to predict that people would be dumb than to predict they’ll be smart. Lots of irrationalities come from dumbness. Deception, though a popular tool, uses dumbness.
It is not often the smart or sensible paths that draw many, but the simple, or feels part. Something can feel so good to taste, smell, or other senses, but does not mean it is good for behaviour, health, etc. Many take the feel-good and damn the consequences.
Something may be so good at present, so easy, so advantageous, so acceptable, but does not mean it is good for the future. Some answers may seem so right, so appraisable but dumb, cheap and impractical.
It is possible to have gone somewhere to get something at some point, but – would – years on, cause major problems for the people.
There is so much dumb thinking – so much outsourced thinking that turns out to be wrong.
One of the most common spots of dumbness is power. It is often assumed that people in powerful positions manoeuvre to get there and stay there, but predicting the behaviour of the powerful is quite easy because of how power drives dumbness because many assume that just being powerful means smart or better than others – it doesn’t. Ideology can take over power so dumbness can be the leader.
Do whatever you like as long as it does not affect anyone is another dumb statement that does not account for the possibility that private habits can be triggered externally depending on the situation, or say calculation – that assumes it is possible to get away with it, or not get away, but to do it regardless.
In science, evidence determines much. In justice, evidence matters a lot. But some justice failed because the evidence was not presented, or was countered, or ignored not because the crime was not committed. So the supremacy of evidence as the determinant of real true or false – isn’t that smart, it’s just the established rule.
Be careful what you think, or guard thy heart with diligence may seem odd to some, but the heart is the point of pull or plan for most wrongs. Thinking in certain ways is to have done it.
Selfishness – or the best for one person or group, seems like what is preferred by most, but this classic dumbness becomes a loss, starting from the ones who think it’s of maximum benefit.
The present in all its hardship for many – is a matrix from the past, in how some took to selfishness, for the advantage of the day, to become the loss of the future for things linked to them.
The circuitousness continues.
There is the smart spectrum and there is the dumb spectrum. Some choose or it chooses them. There are those in the dumb spectrum that no knowledge, exposure or information does much to get them away from it. As a fact, as some get more exposed, their dumbness deepens.
Some people often feel others are smart while others feel others are dumb. Smartness or dumbness is not often determined by sides. Most times, dumb people throw dumbness to everyone else, as in the playbook of critics. Criticism – most of the way – is dumbness repackaged and responsibility defenestrated.
Understanding is relevant in how smartness navigates, but dumbness convolves into what many would choose.
Though technology was supposed to make smart, it powered mass social media that lets dumbness go wide. Most people hear, see or read there, they sometimes forget about it, but sometimes end up behaving in ways that express those actions – without tracing it back there.
Also, most people say stuff as themselves, but often just channelling from that source or acting in ways that blend with what the source would like.
It is important to have internal strength, not just seeking always for the external, but to have this strength to wait a bit or a little, to process things through and properly, before going along the easy, one-way-think option available to all.
Though smartness is far better than dumbness and maybe should not be compared, but smartness at its best is limited. It is possible to be smart, using the information available and be wrong. So even at the peak of smartness, it should be understood that limitations abound.
God is a spirit.
This means God does not exist in the physical or cannot be seen, or instruments used to find distant physical object cannot be used to find heaven or see the Almighty God.
God ways, thoughts and judgement are different.
This means using statements like if God loves why to suffer – isn’t an expression of that understanding.
Genuine Christianity is what Christ wants, but many combine their Christianity with sin and all kinds of acts. Christianity as an ID is not answering the call to be truly born again.
Everyone can be right in their own eyes, but the Creator of the world, Jehovah Almighty knows all.
[Matthew 22:29, Jesus answered and said unto them, Ye do err, not knowing the Scriptures, nor the power of God.]
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