With the ongoing onslaught of COVID-19, Dr. Marius O. Adeniyi gives an early peek into strategies for economic recovery for African countries post-COVID-19.
The World Health Organization on March 11, 2020 declared COVID-19 as a global pandemic and this has removed any doubt about the huge threat that the virus poses. COVID-19 has been spreading rapidly around the world since it was first identified in December 2019 in the People’s Republic of China.
Existing data from China and other countries with outbreaks suggest that COVID-19 transmits readily through person-to-person contact, likely respiratory droplets, causes death from severe respiratory illness in approximately 2 percent of infected persons, and may be transmitted by infected people who have no or minimal symptoms.
Presently, no vaccine exists to prevent infection nor medications for treatment of infected cases. As such, the novel COVID-19 is killing multitudes globally and the Africa continent isn’t exempted. A quick glance at Africa “Covid-meter” establishes that in total, there are currently about 84,586 cases and 2,764 deaths, according AfricaCDC (18th May 2020).
Invariably, this leads to a rising anxiety on what the future holds for humanity post-COVID-19 in Africa and other continents of the world, particularly in respect of the socio- economic activities, healthcare, job security, and general wellbeing of African countries.
The World Bank’s recent Africa’s Pulse report stated that COVID-19 pandemic has the potential to plunge Sub-Saharan Africa into its first recession in 25 years, with growth potentially falling as low as negative 5.1% in 2020. Food security is at risk because of trade disruptions and extant travel bans in many African countries, lower agricultural production and fewer food imports.
The United Nations’ Economic Commission for Africa (ECA) revise projections downwards, showing growth contraction of up to -2.6% from over 3% growth. We now have a region that is stripped of its own sources of financing for development. Oil prices that were already low have plummeted, yet over 40% of Africa’s exports is in the oil industry.
Countries like Nigeria, Gabon, Angola, and Algeria that are key exporters of oil are really suffering. Also, prices of commodities such as coffee and cocoa are now projected much lower than previously, and overall trade has dropped by at least 30%.
The World Bank has warned that disastrous effects of COVID-19 could push between 40 and 60 million people into extreme poverty this year, with Sub-Saharan Africa being the hardest hit, followed by South Asia, while the International Labour Organization (ILO) expects the equivalent of 195 million jobs lost.
The World Food Programme also projects that 135 million people are facing crisis levels of hunger or worse, while another 130 million are on the edge of starvation.
Withe the foregoing, there is no doubt that there is an urgent need for solutions that will move the African continent forward, reduce risk and maximize on opportunities in the wake of the COVID-19 crisis.
But the big question is: what can African countries do to respond better and recover well post-COVID? Below I itemize just a few of the strategies that African leaders can deploy to cushion post-COVID crisis:
- There should be urgent acceleration in the implementation of the African Continental Free Trade Area agreement (AfCFTA) as this will surely boost intra-African trade, development and economic diversification, making African economies less vulnerable to economic shocks and more resilient to global crises or market disruptions. This will serve as a robust stimulus package for industrial development, economic growth, jobs creation and foreign exchange.
- Healthier is wealthier: Africa countries should prioritize massive investments in Health Systems for better Health Outcomes. In addition to the fact that there is an intrinsic value of health and that health is a human right, the economic case for investing in health is robust. Good health is not only an outcome of, but also a foundation for, development. Healthy individuals are more productive, earn more, save more, invest more, consume more, and work longer, all of which have a positive impact on the gross domestic product (GDP) of a nation. The findings of a World Bank (WB) study explored the impact of health — as measured by life expectancy — on economic growth, suggest that one extra year of life raises GDP by 4 percent. Better health also reduces the financial costs of health care for the family, the community, the private sector, and the government.
- According to International Labour Organization (ILO) Statistics in 2017, at the level of the continent, agriculture contributes up to 23% of GDP and constitutes a real source of employment by hosting in average 55% of the active population of the African countries. African countries should invest more in agriculture and seek ways to provide support to individuals, groups and organisations within the sector.
- According to a new World Bank report released earlier that Sub Saharan Africa’s tourism industry is set to spur more economic growth for the continent and directly employ 6.7 million people by 2021. African countries should harness tourism for growth and improved livelihood. African countries like Cape Verde, Kenya, Mauritius, Namibia, Rwanda, Tanzania and others have huge tourism potentials If developed effectively and managed efficiently. Over time, it has proven its capacity to accelerate Africa’s economic growth and job creation.
- African union must solicit the support of multilateral institutions and partners to work together to develop comprehensive and effective recovery framework to overcoming post COVID-19 challenges across different sectors.
- Governments and the private sector need to work together and consider ways to help the population and African markets recover from the debilitating effects of COVID-19 on factors such as GDP growth, critical macro-economic indicators, inflation, exchange rates, employment and livelihoods to vulnerable sectors.
Undoubtedly, the COVID-19 pandemic has exposed African economy’s fragility. African leaders need to rise up and challenge this ugly reality. Also, it is very pertinent to keep asking about what becomes of the continent post-COVID even during the pandemic. It is never too early to do so.
With the support of UN development systems, governments at all levels must adopt progressive policy choices for sustainable development that benefit more people, improve our failed health systems and deplorable social infrastructures and give larger room for an all-inclusive growth.