The spread of COVID-19 has been slow in Nigeria compared to other countries on the continent. Nevertheless, the federal government has taken steps in readiness for a more rapid outbreak. Schools have been closed, public gatherings banned by some state governments and most public workers are required to work from home.
Nigeria’s health system will find a full onslaught of COVID-19 difficult to handle. The main reasons are its lack of sufficient isolation centres and testing kits.
The other major challenge is that Nigeria has a very high dependency on imported drugs – 70% are brought in from abroad, chiefly China and India. On top of this, Nigeria relies on imported active pharmaceutical ingredients as well as equipment used in drug manufacturing.
This dependency is of particular concern in the face of a threat such as COVID-19. The reliance on foreign countries may lead to a serious medical crisis in the country if it is unable to source the drugs it needs. China and India have both been hit hard by the pandemic.
It’s important for Nigeria to take stock. It needs to look at lessons learned and build on them to respond better to ensure uninterrupted pharmaceutical supply during pandemics.
Drug security is important
With the numerous health challenges that Nigeria faces – ranging from communicable to non-communicable diseases – pharmacotherapy is the mainstay for vast majority of conditions. Ensuring national sufficiency and drug security is crucial in tackling diseases, reducing mortality and catering for other health care needs.
This no mean task with a growing population of over 200 million. It is important at the same time to combat falsified, substandard and counterfeit pharmaceutical products. All pose threat to the economy and security of the nation.
There are steps the country can take to offset the very high dependency on imports. Manufacturing is one such route.
The manufacture of drugs in Nigeria is on the decline. The main reasons for this are infrastructural challenges – like a lack of consistent energy supply – as well as inadequate financial support to the up-and-coming pharmaceutical scientists.
Others constraints include difficulties in the over-dependence of imported raw materials, weak technology and engineering base, weak industrial linkages and supply chain with high taxation.
Nigeria nevertheless has a relatively sizeable industry. The country is home to more than 115 pharmaceutical companies. These produce for the local markets and for export to neighbouring countries.
Nearly all of the local drug manufacturers purchase active pharmaceutical ingredients from other manufacturers and formulate them into finished drugs. This means that they are limited to purchasing drugs and repackaging them for use.
There is, however, some manufacturing. This includes analgesics, antimalarials, antibiotics, antiretrovirals and vitamins including tablets, capsules and syrups. Others include antitussive syrups, infusions, antacids, antiseptics/disinfectants and injectables.
But there is no significant research and development activity in the country. And most of the pharmaceutical companies in Nigeria have not been able to fully navigate the challenges which makes the operation in the country sub-optimal.
The overall impact of this pandemic may be felt soon, leading to shortages of active pharmaceutical ingredients. This should raise concern about the potential of an increase in fake and counterfeit medicines and drugs. Fighting the sale of fake, counterfeited and sub-standard drugs is a ongoing struggle in the country.
The COVID-19 pandemic should be an opportunity for drug manufacturers to pressure government into doubling efforts to ensure local drug manufacturing.
The federal ministry of health too needs to ensure that the medicines and drugs supply chains are well-coordinated and regulated to ensure that people who need them have access. It should ensure that all drugs listed on the national essential drug lists are readily available and well distributed across the country.
Nigeria is blessed with thousands of medicinal herbs. This is equally an opportunity for the country to strategically improve its research on herbal medicines for diseases management and improve access to medicines.
Developing a sustainable and efficient local drug industry in Nigeria would take decades of dedication by both the private sector and government. It is therefore important for the government to make the country attractive for foreign pharmaceutical companies and also to complement the development of drug manufacturing.
The National Agency for Food and Drug Administration and Control and Pharmacists Council of Nigeria have been making meaningful efforts to ensure and encourage local drug production. Both organisations should do more especially in getting government’s political commitment to encourage local drug manufacturing.
The food and drug agency recently ordered manufacturing of chloroquine for emergency stock for possible clinical trial for COVID-19 treatment.
Interestingly, the federal government has directed the National Institute for Pharmaceutical Research and Development to start research on herbal drugs that will help combat COVID-19.
The challenges facing local drug manufacturing in the country cannot be completely solved during this pandemic. However, it should provide the opportunity for reflection as regards drug security during pandemic.
A swathe of the world’s top sports competitions, tournaments, and professional leagues have been canceled or postponed due to the coronavirus outbreak. Last week, the health emergency claimed arguably the biggest prize in all of sport, the 2020 Summer Olympic Games, which was scheduled to open in Tokyo on July 24th.
News about the Tokyo Olympics being postponed to 2021 has shaken organizers, sponsors, and media companies who have invested billions of dollars in the run-up to a unique sporting event that can trace its history back to ancient Greece in the late 770s BC.
The delay of the Tokyo Games is expected to produce a costly financial hit, with total losses stretching to over $5.5bn this year, according to data gathered by LearnBonds.
In 2013, when the Japanese capital won its bid to host a quadrennial event, it was estimated the Tokyo Games would cost around $6.6bn or 730bn yen. However, at the end of 2019, the organizers projected the total cost nearly doubled, reaching $12.3bn or around 1.35trn yen.
The Japanese organizing committee invested 603bn yen or $5.51bn into hosting the Olympics, revealed the Statista data. The city of Tokyo bared the second-highest cost, spending just $5m less than the committee, while the central government gave $1.37bn.
One of the crucial factors in calculating how the postponement of the Olympics hit the Japanese economy is that most of this spending already happened. This means the effects of expenses have already been factored into the national gross domestic product in recent years.
Nevertheless, the financial hit of suspending the largest international sporting event till 2021 will be significant, revealed the Statista and Kansai University data. Given the commitment and training involved in the lead up to an Olympic year, this delay already had a massive impact on the 11,000 Olympic athletes and 4,400 Paralympic athletes preparing to compete in the event. Many of whom attempted to train for a number of weeks in countries that already imposed lockdown restrictions.
Their $3.56bn worth preparations for the Olympic Games is counted as a financial loss. Also, the Olympics were expected to produce a long-term economic impact in Japan, bringing more than $2bn or 218.3bn yen in revenue, mainly through tourism, domestic spending, the urban development of the nation’s capital, and the continued use of new facilities.
Maintenance, repair, management of stadiums, and the Olympic village is forecast to generate around $210m in costs, while the public relations and communications are expected to cause $91m million worth expenses.
Postponing the Olympic will cost broadcasters and commercial partners millions of dollars in revenues. Especially considering that Japanese businesses had a huge share in the Tokyo Olympics budget, putting a record of $3.18bn in sponsorships. In comparison, both the London 2012 Games and Rio de Janeiro 2016 Games raised three times less from local sponsors.
However, this figure doesn’t include partnerships signed between corporate giants such as Panasonic, Toyota, and Bridgestone and the International Olympic Committee for rights to sponsor several Games in a row. As major sponsors, the three companies have exclusive deals with the IOC worth hundreds of millions of dollars.
At the same time, the Comcast-owned TV network NBC set a new record with selling more than $1.25bn worth of advertising ahead of the 2020 Olympics.
Although the company is insured against events that might affect their investments, the Tokyo 2020 Olympics delay will cost them the ad-driven profit. Four years ago, when the Games took place in Rio de Janeiro, NBC earned around $250m from advertising during the Olympics.
Moscow, Russia’s capital is imposing a citywide quarantine starting March 30 until further notice for all residents regardless of their age, Mayor Sergey Sobyanin said in a statement.
“(Since restrictions were imposed) movements in the city decreased by two-thirds, which this is very good,” Sobyanin said. “Although it is obvious that not everyone heard us.”
Residents will only be able to leave their houses to get urgent medical help, go to a nearby grocery store or pharmacy, and to walk their pets in the proximity of 100m from their residence. The exception will be made for essential workers.
City officials will deploy a “smart monitoring” system to enforce these restrictions, Sobyanin said, and the city will develop a special pass system for people to get permission to leave their homes.
Public and private transportation, as well as leaving or entering the city, is still allowed, according to the statement obtained by Press.
A chartered medical evacuation flight on Sunday crashed during takeoff in Manila Philippines.
The plane carrying emergency medical supplies to Japan amid the coronavirus outbreak crashed and exploded.
According to the Manila International Airport Authority, the WestWind 24 aircraft was taking off from Manila’s Ninoy Aquino International Airport when it burst into flames and crashed.
Manila International Airport Authority added that it killed all eight persons on board.
“The flight, which was on a med-evac mission to Haneda, Japan, was carrying two passengers and six crew members.
“Unfortunately, no passenger survived the accident.
Two passengers were a 63-year-old Canadian man and a 58-year-old Filipino-American woman.
The airport authorities said the six Filipinos were three pilots, a flight mechanic, a doctor, and a nurse.
African governments set to see decline in revenues; Exploration projects put on hold; Thousands of local jobs at risk if nothing is done.
While the short-term effects of Covid-19 on world economies are already being felt and put millions in a situation of economic distress, their long-term ones are yet to be fully grasped. In sub-Saharan Africa, the impact will be felt even stronger because the pandemic is being combined with a historic crash in oil prices, putting pressure on state budgets and testing the resilience of the continent’s strongest energy companies.
The immediate effect of Covid-19 for the sector has been on the demand for crude oil, and on its prices. Most analysts and operators now agree that 2020 could see a negative demand growth for oil globally as industries shut down and countries around the world go on lock down. The effect on prices has been nothing short of devastating: they have reached their lowest levels since 1991 and currently stand at below $25 a barrel.
For Africa, this means an immediate pressure on state budgets and macro-economic stability. Apart from South Africa, the continent’s biggest economies rely heavily on oil revenue to fuel state budget and public spending and ensure macro-economic stability. All sub-Saharan Africa’s producers had budgeted 2020 with an oil benchmark well above $50, from $51 in Equatorial Guinea all the way up to $57 in Nigeria. With predictions that oil prices won’t go anywhere above $30 for the rest of the year, most budgets need to be re-adjusted and public spending needs to be drastically cut.
According to the Atlantic Council, major African producers could expect multi-billion dollar losses in state revenues this year. Congo-Brazzaville could take the hardest hit, with a loss representing 34% of its GPD, in a country where debt-to-GDP ratio is already around 90%. The same applies to Angola, where oil prices at $30 would generate a revenue loss of almost $13bn, or 13% of GDP.
Equatorial Guinea, Gabon and Chad could see losses of almost 10% of GDP due to the ongoing crisis. Nigeria finally would suffer the biggest lost with $15.4bn, still according to the Atlantic Council. While it would represent only 4% of its GDP, the impact on marginal producers and local jobs would potentially be devastating. Newer producers would also suffer revenue losses: in Ghana, the the Africa Centre for Energy Policy (ACEP) estimates a potential revenue loss of 53% down to $743 million instead of the $1.567bn the country expected to receive this year.
“Thousands of Africans and expats are going to be laid off in oil-producing countries as companies shut down their drilling rigs and planned projects. We need to face the reality as these times are unprecedented.
The uncertainty is even more frustrating for oil companies and the workers. Forgive me but there is blood on the streets, in the water and the air has the coronavirus,” said NJ Ayuk is Executive Chairman of the African Energy Chamber and Petroleum industry lobbyist. “Petroleum-producing countries need to come together and work with the private sector in order to get us through the COVID 19 crisis and mitigate the economic fallout as much as possible. When the US and Europe are talking about a recession, most African countries and the common man on the streets have likely already entered a depression,” added Ayuk.
The long-term effects that Covid-19 will have on the sector in Africa depends on what happens this year and in the following month. Cuts in exploration spending and cancellation of drilling plans today could potentially mean years of delay in new discoveries, reserves replacement and new fields being brought on stream.
The biggest international oil companies operating in the continent are all cutting spending by an average of 20% globally, which is set to impact exploration and projects in Africa. While ExxonMobil considers several reductions in spending, Shell has already announced a reduction of underlying operating costs by $3 to $4bn and a reduction of cash capital expenditure of $5bn. Total’s organic capex is being cut by more than $3 billion, representing 20% of its planned 2020 capex. Chevron is also reducing capital and exploratory spending by 20%, including a $700 million cut in upstream projects and exploration.
These IOCs were expected to take major final investment decisions this year or in the near future on multi-billion dollar projects in Africa. These include Shell’s Bonga South-West project, ExxonMobil’s Bosi, Owowo West and Uge-Orso projects, or Chevron’s Nsiko project. regardless of how close each of these were to FID, they are very unlikely to get sanctioned this year. Recent statements from independents are going in the same direction. Woodside Energy for instance is currently reviewing all options to preserve and enhance the value of its Sangomar Offshore Oil Project in Senegal, whose first oil was expected in 2023.
Beyond oil, natural gas and LNG projects are also already being delayed. ExxonMobil’s announcement that it would postpone the green-light on Mozambique’s multi-billion dollar Rovuma LNG project is sending worrying signals for instance. Similarly, BP and Kosmos are already working to defer the 2020 Tortue Phase 1 capital spending for their multi-billion dollar FLNG project in Mauritania and Senegal. Together, Rovuma LNG and Greater Tortue Ahmeyim represent the biggest hopes Africa had to strengthen its position as a new global LNG export hub. Delaying such projects will have significant consequences on forecasted economic growth in each country.
Finally, the long-term impact of Covid-19 is taking shape right now, as exploration programs are put on hold. Much-awaited drilling like FAR’s plans in The Gambia this year have been suspended. Other planned seismic acquisition projects have also already been cancelled, such as EMHS’ CSEM Survey offshore Senegal and Mauritania for BP which was set to begin this month, or Polarcus’ 3D seismic acquisition project offshore West Africa.
Meanwhile, most licensing rounds that were set to confirm Africa as a global exploration frontier this year will most likely not live up to expectations. South Sudan for instance has already announced the suspension of its oil & gas licensing round this year.
While African nations grapple with the crisis brought by Covid-19 and the OPEC price war between Saudi Arabia and Russia, the initiatives they take today will determine the future of their oil & gas industries for years. Local companies, be they producers or services providers, are at the frontline and need all the possible support they can get to avoid cutting jobs and survive the crisis. As Shoreline Energy CEO Kola Karim recently phrased it, “when the elephants fight, it’s the smaller producers that suffer.” Supporting these smaller producers and their local contractors should be a priority to preserve the long-term future and prosperity of Africa’s oil & gas sector.
The African Development Bank has raised an exceptional $3 billion in a three-year bond to help alleviate the economic and social impact the Covid-19 pandemic will have on livelihoods and Africa’s economies.
The Fight Covid-19 Social bond, with a three-year maturity, garnered interest from central banks and official institutions, bank treasuries, and asset managers including Socially Responsible Investors, with bids exceeding $4.6 billion. This is the largest dollar denominated Social Bond ever launched in international capital markets to date, and the largest US Dollar benchmark ever issued by the Bank. It will pay an interest rate of 0.75%.
Landmark transaction, largest US dollar denominated Social bond transaction to date in capital markets
The African Development Bank Group is moving to provide flexible responses aimed at lessening the severe economic and social impact of this pandemic on its regional member countries and Africa’s private sector.
“These are critical times for Africa as it addresses the challenges resulting from the Coronavirus. The African Development Bank is taking bold measures to support African countries. This $3 billion Covid-19 bond issuance is the first part of our comprehensive response that will soon be announced. This is indeed the largest dollar social bond transaction to date in capital markets. We are here for Africa, and we will provide significant rapid support for countries,” said Dr. Akinwumi Adesina, President of the African Development Bank Group.
The order book for this record-breaking bond highlights the scale of investor support, which the African Development Bank enjoys, said the arrangers.
“As the Covid-19 outbreak is dangerously threatening Africa, the African Development Bank lives up to its huge responsibilities and deploys funds to assist and prepare the African population, through the financing of access to health and to all other essential goods, services and infrastructure,” said Tanguy Claquin, Head of Sustainable Banking, Crédit Agricole CIB.
Coronavirus cases were slow to arrive in Africa, but the virus is spreading quickly and has infected nearly 3,000 people across 45 countries, placing strain on already fragile health systems.
It is estimated that the continent will require many billions of dollars to cushion the impact of the disease as many countries scrambled contingency measures, including commercial lockdowns in desperate efforts to contain it. Globally, factories have been closed and workers sent home, disrupting supply chains, trade, travel, and driving many economies toward recession.
Commenting on the landmark transaction, George Sager, Executive Director, SSA Syndicate, Goldman Sachs said: “In a time of unprecedented market volatility, the African Development Bank has been able to brave the capital markets in order to secure invaluable funding to help the efforts of the African continent's fight against Covid-19. Not only that, but in the process, delivering their largest ever USD benchmark. A truly remarkable outcome both in terms of its purpose but also in terms of a USD financing”.
The Bank established its Social Bond framework in 2017 and raised the equivalent of $2 billion through issuances denominated in Euro and Norwegian krone. In 2018 the Bank was designated by financial markets, ‘Second most impressive social or sustainability bond issuer” at the Global Capital SRI Awards.
“We are thankful for the exceptional level of interest the Fight Covid-19 Social Bond has raised across the world, as the African Development Bank moves towards lessening the social and economic impact of the pandemic on a continent already severely constrained. Our Social bond program enables us to highlight our strong development mandate to the investor community, allowing them to play a part in improving the lives of the people of Africa. This was an exceptional outcome for an exceptional cause,” said Hassatou Diop N’Sele, Treasurer, African Development Bank.
Fight Covid-19 was allocated to central banks and official institutions (53%), bank treasuries (27%) and asset managers (20%). Final bond distribution statistics were as follows: Europe (37%), Americas (36%), Asia (17%) Africa (8%,) and Middle-East (1%).
Every Tuesday, Alemondji market in northern Togo swarms with people. Amid the throng, Burkinabe and Ghanaian traders offer clothes and kitchen utensils for sale. Others, calling out their wares, come from the nearby towns of Lawagnon, Moreta and Issati. Their stalls overflow with peanuts, millet, sorghum, sesame and beans.
"Just a few years ago, it was no easy matter to travel to this market. It was open for three days in succession, Tuesday to Thursday, and then again on Sunday, but we only came for one day, because our main route to travel to the market was so poor," said Robiro Kadokah, a millet seller.
Her taxi from Issati now crosses the Alemondji bridge at a good speed. Located 200 kilometres (km) north of the Togolese capital Lomé, the bridge is a symbol of the opening-up of many of the region's agricultural communities.
"Before, when we travelled from Lawagnon, Moreta or Issati, we had to make a 50-kilometre detour before reaching the main road. Then, we could set off for Alemondji to go to the market. It all took two or three hours, and we were losing customers. Now, though, it only takes 10 or 15 minutes for us to get to the market place," the 50-year-old woman explained as she got out at the bus station.
Akilasso Magasso is a tax collector. He too has less to worry about than he used to. "We really were cut off from the rest of the world. Only a few motorcycles managed to make the journey along the muddy road to Alemondji. We have got our smiles back since this bridge was built," he said enthusiastically.
The 120-metre Alemondji bridge was built as part of the renovation of the roads on the CU9 corridor linking Lomé, Cinkansé and Ouagadougou. The $325 million-project was 70% financed by the African Development Fund, the concessional funding arm of the African Development Bank, and by the Fragile States Facility.
Work was carried out on 150 km of road in Togo and a further 153 km in Burkina Faso. On the Togolese side, the Atakpamé-Blitta (102 km) and Blitta-Aouda (48 km) sections were renovated, 55 km of rural feeder roads were improved, and the Alemondji bridge was rebuilt.
Since the road rehabilitation there has been an increase in traffic to and from Burkina Faso, Niger and Mali to 2 million tonnes of goods per year since 2016. Travel times between the Burkinabe capital of Ouagadougou and the port of Lomé halved from six to three days between 2011 and 2016.
"All the conditions are right to make trouble-free journeys by both day and night. We are seeing many traders every week from neighbouring countries such as Ghana and Burkina Faso working at Alemondji market. This road and especially this bridge have revitalised our region," said Robiro Kadokah.
Besides the market, other important resources are more accessible, improving the quality of life for residents. For example, the Lawagnon Adult Training Institute for the Development of Fish Farming and the Order of Malta general hospital are all now reachable across the bridge.
"Patients are regularly sent to this hospital. They mostly come from the capital, Lomé. Now that the bridge has been restored, it is saving lives," Magasso said.
"This infrastructure ensures a flow of agricultural production and improved access to markets for inputs and products. Not only that, it stimulates the economy and facilitates the region's integration into the national and international economies," said Georges Bohoussou, the African Development Bank's Country Manager in Togo.
Bohoussou said the CU9 road project had put an end to the isolation of the agricultural communities of Gbécon and Morétan and had improved the supply of drinking water for 15 neighbouring villages. To improve women's incomes, the project also renovated and extended the international market at Anié and the weekly market at Doufio in northern Togo.