COVID 19: FAILURE OF CAPITALISM AND THE CHALLENGE OF CONTAINING THE PANDEMIC IN NIGERIA

By Lanre Arogundade

Being the Introduction to the Online Meeting of Socialist Party of Nigeria (SPN) on Covid-19 Pandemic on Sunday April 12, 2020.

 Introduction:

  1. Like a bolt from the blues, the outbreak of the coronavirus disease – Covid-19 – has thrown humanity across the world into a state of shock, disbelief and confusion.

 

  1. Governments have pressed the alarm and panic buttons, and in a fundamental sense there is global lockdown. More or less like fighting the 3rd World war, not among national armies but against an invisible microbe.

 

  1. This is a war in which weapons of mass destruction including billion-dollar fighter jets, nuclear submarines, cruise missiles, etc, have suddenly become useless. Covid-19 has indeed played a huge joke on the capitalist system and its elite sponsors and backers.

 

  1. From its outbreak in Wuhan, China, late December 2019 or possibly earlier, for it is not ruled out that the ruling bureaucratic and dictatorial caste in the country hid the facts (and are probably still hiding the facts) until it blew open, the disease has rapidly spread across the globe. Not a single continent is spared of Covid-19 infections and deaths, or its effects.

 

  1. In Africa, Nigeria, with over 300 infections and 10 deaths already recorded, although given the backward state of the country’s health care system, suspect testing measures, lack of reliable data and the generally poor handling of the situation, except in a place like Lagos, the number of infections may be higher while the situation may worsen drastically if infections increase in the communities.

 

  1. But the African countries with the highest rate of deaths and infections are South Africa, Egypt, Algeria, Morocco and Cameroun

 

  1. WHO reckons that we currently have 1.5million infections across the world and estimates that half a million people may die. America now has the highest number of deaths at over 20, 000 followed by Italy at just below, 20,000, Spain, over 15,000, France about 13, 000, UK, close to 10,000 and Belgium, above 3,000.

 

  1. Although both the current and projected figures may not match the death figures of the last known global pandemic – the Spanish Flu – which in 1918/1919 was said to have infected about 500million people, a third of the then world population and led to 50 million deaths, the situation still remains confounding given the advances that humanity has recorded in the sciences, technology, medicine, pharmacy, including specialized fields such as bio-medicine, tele-medicine, bio-physics, virology, etc..

 

  1. But if these advances have not led to the eradication of communicable diseases or impacted the capacity of humanity to adequately respond to outbreaks of pandemics such as this, it is to the extent that the prevailing capitalist system pays a greater premium on the private accumulation of capital and profit as against massive investment in social services like health care for the majority. In Africa, millions continue to die from malaria with the people constantly the subject of experimentation with different malaria drugs.

 

  1. As already stated the world capitalist powers would rather spend trillions of dollars developing military ammunition as patronage to the military-industrial complex, which are some of the principal financiers of their big political parties than spend more on health care. It is not accidental that some of the worst-hit countries by Covid-19 in Europe, like Italy, France and Britain, are the ones that have engaged in brutal cut to health care with the increasing privatisation of the delivery system amidst the general poor working conditions, though still far better than backward economies like Nigeria; which explains the phenomenon of brain drain in the health sector. Thus, as we speak, 70% of medical personnel of African origin in the US are said to come from Nigeria.

 

  1. On the other hand, the Covid-19 pandemic is at the onset of a new crisis. The world economy had yet to completely recover from 2008/2009 recession and the new contradictions piled up were leading to a new economic slump. Now that the capitalist governments are forced to dole out subsidies amidst enforced lockdowns and the attendant closure of factories, the spectre of a post war like global depression or at least a prolonged recession looms larger than before.

 

  1. As our comrades in the Committee for a Workers International (CWI) put it: “However, the “lock-downs” being imposed in most major capitalist countries, combined with the effects of large sections of the workforce being off sick for a period, is also ensuring that recession is already underway in the capitalist economies of Germany, France, Italy, Britain, and the EU as well as in the US and Japan”

 

The CWI notes further: “this pandemic has also been a trigger for the onset of a new global economic recession. In China, where the crisis began dragging down the world economy, GDP has contracted by an estimated 13% in the first two months of 2020! With China accounting for approximately 14% of world trade, this alone would have a devastating effect on the global economy. (In 2007/8 it accounted only for approximately 4% of global trade).

 

The economic and social crisis currently unfolding is likely to be at least deeper than the 2007/8 crisis. Some estimate that the British economy could contract by 15% in the second quarter of 2020. Larry Elliot writing in the London Guardian spoke of “what is shaping up to be the recession of all recessions”. Even deeper than 2007/8! A crash into a global depression cannot be excluded such is the devastating crisis that is unfolding. Big lay-offs are already taking place in many countries and the threat of massive growth of unemployment is now present in all countries.

 

Global debt has soared to a staggering US$250 trillion in the first half of 2019. In fact, global debt levels by 2019 had never been higher with total debt – government, companies, and households – over three times Capitalism was on the brink of a new economic crisis and slow down or recession.

 

The arrival of the pandemic pushed it over and has plunged the world economy into a serious recession or possibly a depression. The nature of the pandemic means that for the first time the recession will have a dual character – of both demand and supply. It is not just a crisis of consumption but also of supply, supply chains, production, and distribution.

 

This would have devastating economic, social and political consequences on a global scale and would be a multi-crisis of all sectors of the capitalist economy. The dramatic rise in unemployment already unfolding and the effects this will have is one greater than the global economy”

 

PANDEMIC MEETS NIGERIA ON BENDED KNEES

  1. If the post-Covid 19 perspective for advanced capitalist countries of America and Europe and even China is that of economic dire straits, then without doubt, a greater doom awaits imperialist dependent neo-colonial capitalist economies which have for years been reeling under neo-liberal economic policies.

 

  1. Oil-dependent Nigeria stands out and the pandemic has met the so-called giant of Africa on bended knees, amidst the collapse of oil prices globally following the war of oil between Russia and Saudi Arabia and a global reduction in demand.

 

  1. The projection for the Nigerian economy has not been encouraging. A bourgeois analyst puts it this way: “The recent drop in oil prices will hit Nigeria hard, making a big dent in government revenues and threatening the viability of upstream projects

Nigeria is bracing to take a big hit from the collapse in oil prices resulting from the end of the Opec+ agreement and the Covid-19 pandemic. The country is particularly vulnerable as it has not fully recovered from the previous crash in 2014.

 

Nigeria’s 2020 budget is based on an anticipated oil price of $57/bl, but the decline in the price of the Brent benchmark crude has forced the government to revise this to $30/bl while maintaining proposed production volumes at 2.18mn bl/d.

 

The crash in prices means volume is especially important for oil-dependent Nigeria, and as there will be no OPEC output limits to adhere to after March, the country can pump at will. However, in the medium-to-long term it may be difficult to increase output “as investment in oil fields is even less attractive now”, says Lagos-based Michael Famoroti, chief economist at Stears. Moreover, “companies will face liquidity problems and pumping oil will become difficult”, he adds.

 

The current low oil prices are a serious problem for oil investors in Nigeria, as “prices are perilously close to per-barrel costs of production for many operators”, says Ekpen Omonbude, a petroleum and mining economist based in the UK and a former economic advisor to The Commonwealth. “A sustained period of these prices or, even worse, a further decline, would make things such as shut-ins and slashed budgets

 

  1. Indeed the government has now been compelled to reduce the 2020 budget by about N320billion by proposing a new figure of about N10.27 Trillion as against N10.59Trillion according to a report by Nigeria’s leading Online newspaper, Premium Times on Sunday April 12, 2020.

 

The ‘new’ budget is being based on an oil benchmark of $30 per barrel as against $57. Meanwhile, with the anticipated reduction of oil production volume from more than 2million barrels to 1.7 million barrels, revenue is also expected to reduce from N8Trillion to N5Trillion. Capital expenditure is being reduced by about N155B and recurrent expenditure by about N25B.

 

  1. At the same time, the government has devalued the Naira, and official exchange rate has moved up from 1USD to about N360. The implications of all these are too clear in terms of more inflation and increases in living costs and it should not be forgotten that a larger percentage of the budget will be financed by borrowings.

 

  1. Just to emphasize that the level of borrowings by the Buhari regime is unprecedented and the future of the country is clearly being mortgaged

 

  1. But the situation would not have been as bad but for the fact that even at the level of reliance on oil, the policies of privatization and commercialization have meant that the huge amount of resources that the country generate and possess have often been diverted into private pockets.

 

  1. Corruption also remains strife, such that the Buhari government has maintained the same dubious oil subsidy system through which the ruling castes continue to feed fat on the populace.

 

  1. SPN and DSM various perspective documents have dealt in greater detail with the crisis of capitalism in Nigerian and its effects on the working masses and their allies, suffice to say that we have continuously seen the evidence in the underfunding of the health sector to the extent that the Nigerian government have never for once allocated as much as 15% of the budget to the health sector as agreed by the African Union based on ‘The Abuja Declaration of 2010’.

 

  1. The poor facilities, shortage of specialists, corruption and mismanagement in the health sector are all too clear to see. The so-called Public-Private Partnership (PPP) has also been introduced in the health sector and in teaching hospitals like LUTH and LASUTH, bed spaces are usually more available in privatized wards within the publicly funded hospitals, but at exorbitant prices. Health care is apparently for the rich.

 

Where Doctors and other medical personnel have gone on industrial action to protest this poor situation they have often been contemptuously neglected or even sacked like Fashola did in Lagos State few years ago. As we have noted in some of our statements, some chapters of Nigerian Medical Association (NMA) and National Association of Resident Doctors (NARD) only suspended their strike actions over unpaid salaries and allowances, under the directive of their national bodies because of the Covid-19 pandemic.

 

  1. It is amidst this health care crisis with large layers of demoralised staff that the Covid-19 pandemic arrived and the failures in the system became openly manifest, from lack of protective gear to shortages of other vital facilities. Because the available ones are being hijacked by the rich, the existing ones are proving inadequate, although the governments and the elite have now been compelled to make huge donations to provide facilities that ought to have been there in the first place.

 

  1. Essentially, the approach of the Nigerian government has followed the global trend – lockdown – without due consideration for the nature and character of our economy where the majority of the population are peasants, farmers, artisans and others who rely on daily incomes for subsistence. Not to talk of millions of pensioners who as we speak are being owed arrears of salaries across the country.

 

  1. The above situation has explained the response of the SPN and the DSM to the pandemic and our various demands for special Covid-19 pandemic allowances to the health workers, other frontline workers are clearly in order. So also our demands for payment of relief monies and provision of other relief materials to workers and the masses in the communities through democratic committees of the communities and various interest groups.

 

  1. We should intensify these demands especially through greater collaboration with the trade unions as we have been striving to do with some measure of success.

 

  1. But we must also work closely with organisations working with the informal sector whose workforce are in the majotity while increasing the tempo of our activities in front groups like CWDR, JAF particularly in defence of basic democratic rights which are being taken away in the name of fighting Covid-19 pandemic, particularly the brutalisation of the people, even including Doctors and journalists by the Army and the Police.

 

  1. Much as we support and encourage safety measures they must not be to the detriment of the basic rights of the people.

 

The SPN along with DSM must also begin to fundamentally question the strategy of simply locking people up. Shouldn’t we for example demand that this be done on alternate days? We should also be demanding for more investment in testings because the perspective of complete lockdown is not sustainable on the long run. We may need to have more discussions on this.

 

EMERGING TASKS AND CHALLENGES

  1. Covid-19 pandemic presents an opportunity for us to publicly agitate for our ideas as it helps to explain how successive ruling classes and parties including the biggest political parties like PDP, APC, etc have failed the masses and the need for the people to embrace an alternative. We can at least tap into the mood of anger across the communities and seek to win new members into our ideas and organisation. The people cannot but be angry. For example, when asked to wash their hands with soap under running taps, they ask: where is the pipe borne water? Where are the taps. Asked to stay at home for the period of lockdown, they wonder aloud: why can’t we have free electricity?

But it does not mean that we will easily win most to our side. There may be those who would even say that Nigerian has tried since Europe and America have also been badly hit by the pandemic. We will need patient explanations.

 

  1. But one challenge is the importance of our intervention in the communities especially given the rise in incidents of robberies and armed banditry being witnessed in parts of Lagos State. We must insist on the right of the people to form community defence committees by way of vigilantes for example, to defend themselves but ensure that there are democratic structures for management and control in place to avoid abuses.

 

  1. There will be economic and political backlash when the pandemic is over as it will provide ready excuse for further attacks on the rights of workers and the citizens through wage cuts, layoffs, redundancies, increased casualisation, etc. It is also not ruled out that there will be fresh increases in VAT, electricity tariff, etc as the ruling class will attempt to shift the burden of bailing the economy out of the doldrums it is headed to the masses while bailing out the big businesses. We must prepare for this and stand to defend jobs and right to decent living. The masses cannot be expected to pay for this crisis when the political elite earn outrageous pay.

 

  1. Our immediate tasks must also include fighting for the payment of all outstanding salaries and allowances for workers, pensioners, etc. We must prepare the trade unions for these struggles.

 

  1. There will be the question of what the SPN will do or can do differently were it to be the one in power or if it comes into power. To this end we must develop and produce an SPN Socialist manifesto for the health sector to demonstrate clearly that through planning, adequate funding but more importantly the democratic management and control of the health sector by elected representatives of the professionals and workers in the sector, better results can be obtained.

 

  1. In all instances we must demand and fight for improved funding of the health sector and free health care for all. After all, it is to the public hospitals that the rich have largely turned during this Covid-19 pandemic. Along this line, SPN must begin to work more closely with health sector unions to push the agenda for a radical and indeed evolutionary overhaul of the sector. Post Covid-19, things must not be allowed to remain the same.

 

  1. Finally, we of SPN and DSM must intensify our demand on the working people to struggle against the privatization of the commanding sectors of the economy. Our demand for nationalization under democratic workers’ control and management so that there would be resources to take care of the health, education and other infrastructural needs of the masses has been justified.

 

  1. From Europe to America to Africa, Covid-19 has exposed the shallowness of capitalism despite its viciousness. The alternative is a Nigerian, African and Socialist world order.

 

  1. Thank you for your attention.

Comrade Lanre Arogundade, NEC member of DSM and leading member of SPN, is a former President of National Association of Nigerian Students (NANS) and former Chairman Nigeria Union of Journalists (NUJ) Lagos State. He is a journalist, socialist, pro-democracy and working class activist.

If you agree with our analysis and position on how to combat Covid 19 pandemic and interested in the effort for a genuine transformation of Nigeria kindly join the SPN. Call 0803 391 4091 and 0703 377 5517.

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