September 24, 2020

Cost of COVID-19 lockdown outweighs health benefits in Nigeria

By Bjorn Lomborg,

Across the world, countries have imposed social distancing regulations to avoid overwhelming the health care capacity during the corona pandemic  the so-called “flatten the curve.” Such a policy can be sensible.

The first peer-reviewed cost-benefit analysis of the US shows just that. It looks at moderate social distancing, an approach similar to Sweden’s. Here, social interaction is reduced about 40 percent, allowing schools and work to stay open but dramatically reducing contacts in all other public areas.

Had this been done across the US, it would have cost $7 trillion more in lost GDP, but more than half the death toll would have been avoided compared to a scenario in which no regulations were put in place. The social benefits of saving these lives add up to about $12 trillion, meaning each dollar in cost achieves $1.70 in social benefits. The study uses rather optimistic assumptions, especially assuming away a second wave of infections, meaning the real social return is likely lower.

ALSO READ: South Africa ex-president, Zuma, accuses graft commission chief of bias

A long-term lock-down policy during which schools and work are also shut down, however, would cost much more but save fewer additional lives. This would likely leave society worse off.

But much of the global conversation has been focused on the response in the rich world. That, despite the fact that four-fifths of the world’s population lives outside the rich world, and many nations, including in Africa, have engaged in dramatic and strict corona policies. Is this the right decision?

For poorer countries, the benefits of corona policies are sharply lower, as documented by researchers at Yale University.

First, developing nations have substantially fewer old people who would benefit from social distancing.

Second, developing nations already have low hospital capacity, so flattening the curve will help little and still see hospitals overwhelmed.

Third, poorer people face several challenges and die from many other, preventable causes. This means that they value any risk reduction from corona much less.

The award-winning international think tank Copenhagen Consensus together with researchers from Nigeria’s premier parliamentary research institution, the National Institute for Legislative and Democratic Studies (NILDS), just completed the first cost-benefit analysis on corona policies for Nigeria. Its findings are stark.

Models show that along with limiting corona deaths, moderate social distancing will also improve treatment of some diseases like HIV but reduce the effectiveness of other treatments, such as those for malaria and tuberculosis. It will also lower the number of traffic deaths but increase the number of malnourished children.

In total, the study finds that the policy can avoid about 12,000 deaths in Nigeria. That is encouraging.

However, there are significant costs.

While a corona epidemic inevitably creates an economic cost, moderate social distancing will have a significantly higher economic impact. The total economic loss for Nigeria runs to USD 373.5 billion, almost equivalent to an entire year of GDP.

Nigeria had its schools shut down to help tackle corona, but this will have long-term impacts. More than twenty-five million school children will learn less and end up less productive in their adult lives. Given that the productivity increase for a year of extra schooling is estimated at 12.2 percent, the total loss over the coming generations for Nigeria could be worth USD 5.7 billion today.

Put bluntly, moderate social distancing and school closures over a period of nine months can save 12,000 lives at the cost of USD 372.3 billion in lower life quality for its future. Is that worthwhile? Many well-meaning people will argue that lives should be saved at any cost.

ALSO READ: I didn’t beg Obaseki to return to APC, haven’t addressed press after election ― Ize-Iyamu 

But clearly, that doesn’t happen. Each year Nigeria likely sees more than 150,000 people die from tuberculosis, almost all of whom could have been saved at surprisingly low cost. Research for Nigeria shows that we could save about 127,000 people from dying from TB every year for about $400 million.  For the amount Nigeria would spend on saving one life through corona policies, it can save almost 10,000 lives through smart TB policies.

Therefore, the new analysis shows that in Nigeria, each dollar spent on a hypothetical future scenario of moderate social distancing to tackle corona will deliver just three cents of social benefits.

Faced with the specter of corona, initial frenzied action is understandable. But for Nigeria, moderate social distancing will do more harm than good.

Nigeria should, of course, continue a series of sensible low-cost social distancing measures the government has already implemented, which likely represent the best balance of costs and benefits in the fight against corona. These include cocooning the elderly, no large gatherings and handwashing. It should keep health services for tuberculosis, malaria and vaccinations running. It should provide masks for health personnel.

But crucially, Nigeria  as likely most other developing nations  should not shut down its schools or its economy to tackle corona, because the damages will vastly outweigh the benefits.

Bjorn Lomborg is President of the Copenhagen Consensus Center and Visiting Fellow at the Hoover Institution, Stanford University.