The COVID-19 pandemic and its repercussions for Africa’s economic growth present an opportunity to re-examine the future and actions which will drive economic transformation. In its 2000 publication ‘Can Africa claim the 21st century?’, the World Bank predicated that of all the economic blocs, only the African continent may not achieve economic transformation in the 21 century.
At the beginning of the 21st century (2000-2010), some of Africa’s economies showed a lot of impetus in economic growth. A few months ago, Africa’s fortunes were on the upswing. Some of the world’s fastest-growing economies, including Ghana, were on the continent. Declining rates of poverty and infant mortality signalled that Africa was on the right development path, anchored by the 2030 Agenda for Sustainable Development and the African Union’s Agenda 2063.
The higher GDP growth and expanded opportunity over the last decade were attributed to a surge in the prices of commodities. Economies of commodities-exporters such as Angola, Ghana, Nigeria, South Africa and Zambia began to show signs of growth. But in no time, those economies were hit by a slump in commodity prices – with their currencies crashing and putting fiscal and monetary policies in disarray.
At the beginning of the next decade, some sub-Saharan African countries, especially Ghana, had once more demonstrated economic resurgence. Both the World Bank and IMF had predicted Ghana’s economy to emerge as not only the fastest-growing in Africa, but also in the world. Economic projections have pointed to the fact that Ghana would have sustained its 7 percent GDP growth in 2020 but for the COVID-19 pandemic. As things stand now, Ghana – like other countries – may experience a negative GDP growth at end of the year
As at 24 May 2020, 54 African countries had recorded more than 100,000 COVID-19 cases and over 3,000 deaths. Ghana’s cases at 8,000 and 38 deaths remain among the lowest. And while the number of cases continues to grow, it could have been worse had it not been for governments’ proactive and innovative interventions. “We mourn the lives of people we have lost, and recognise the sorrow and burden of families and loved ones they have left behind. Life, as we have known it, has changed in unimaginable ways,” says Amina Mohammed, Deputy Secretary-General of the United Nations.
The reality is that economies and livelihoods have been heavily affected, as the demand for Africa’s commodities has fallen and tourism declined sharply within this short period of COVID-19. Undoubtedly, remittances – which could have accounted for more than 10 percent of Gross Domestic Product (GDP) in some countries (including Ghana) – are also drying up.
Already, the price of oil, which accounts for 40 percent of Africa’s exports and 7.4 percent of GDP, has declined by half; sharply reducing revenues for countries like Nigeria and Angola, two of Africa’s biggest oil exporters. Even Ghana, a relatively small exporter, has been hard-hit by the slump in oil prices; not to mention the drop in cocoa prices. Ghana and Cote d’Ivoirein are the major losers in cocoa revenue for 2019 and 2020.
The United Nations, World Bank and IMF have all predicted that Africa’s economic growth could drop by 2.6 percent, pushing about 29 million more people into extreme poverty. Other economic forecasts point to the fact that shortages of foodstuffs – including maize, cooking oil and rice, could trigger a food crisis if threats of swarms of locusts devouring crops in some parts of Africa are not tackled. The disruption of global supply chains is also considerably affecting export capacities. With hindsight, Ghana’s ‘Planting for Food and Jobs’ policy is a timely response to the pandemic for our food security needs. The ‘One District, One Factory’ policy may also be a timely response by way of boosting small-scale manufacturing.
One other face of COVID-19 is its potential to perpetuate inequities in societies across the continent, as well as between countries and the often forgotten realities of the most disadvantaged and vulnerable groups – including the refugees, the internally displaced. Its impact on the millions of people eking out a living in Africa’s fast-expanding urban settlements could be a permanent feature, unless policy interventions are initiated to reduce overcrowding and improve basic services like water and sanitation.
Another group that is worse-hit by COVID-19 is informal workers. Statistics indicate that informal workers form 85.8 percent of the sub-Saharan African labour-force, who often lack social protection or buffers against economic shocks like what is unfolding. This is especially true for female workers, who constitute the majority of this sector.
Beside taking a toll on the health system, the pandemic is also affecting our educational system. Across Africa learning has been suspended – forcing children out of school, creating uncertainty about whether they will be able to continue their education in the months ahead. This is a worrying signal for Africa’s economic managers, which calls for a timely policy response to restore confidence into education.
Besides, the pandemic has brought long-standing fragilities and inequalities into sharp relief, including systemic discrimination against women and girls. There has also been an alarming rise in levels of violence in the home, and rights-based abuses under the lockdown. Obviously, women and children are the main victims. In Ghana, daily cases of parents physically and emotionally abusing their children out of frustration are being reported. One father is currently in police custody for chopping off the finger of his son for allegedly stealing his money. Another parent mercilessly lashed his son with a wire, leaving indelible marks on his body.
Keeping hope alive
As the continent that has been the face of poverty statistics, Africans must have faith that the pandemic is only a partial eclipse and Africa’s sun will shine again. This optimism has been reechoed by Ghana’s President Nana Addo Dankwa Akufo-Addo, as he continually emphasises the need to use COVID-19 as a stringboard to boost local production. Amina Mohammed has noted that Africa’s inter-connectedness and solidarity are the reasons why Africa can survive the pandemic. The African proverb of “You cannot clap with one hand” rings as true as ever. This is reinforced by a proverb by the revered former South African President, Nelson Mandela: “It is in your hands to create a better world for all who live in it”.
Based on these African proverbs, some analysts have offered a few reasons why Africa could emerge stronger:
First, Africa must improve affordable access to medical supplies by creating green lanes at Customs to facilitate fast movement; suspend tariffs on medical items; establish price control mechanisms; and foster local manufacturing of medical supplies.
Second, governments should promote policies to protect small- and medium-sized enterprises, including leveraging opportunities in the digital economy and expanding access to technology.
So far, Ghana has committed GH¢600million for resuscitating small-scale businesses, which are the foundation for economic growth.
Third, the AU must ensure successful implementation of the African Continental Free Trade Area in order to fast-track Africa’s industrialisation and position its economy to better withstand future global shocks. Africa cannot to continue to be a dumping-ground for the rest of the world.
Fourth, we must heighten our focus on children, older persons, persons with disabilities, refugees and internally displaced persons. More than ever, women must be well-represented at decision-making tables as part of social inclusion. We must also enlist the talents of our youth if we are to succeed in transforming Africa to a land of inclusion and prosperity that will serve future generations.
Unfortunately, investment in education is not matching the numbers of school-age children. Of concern is the inability of many countries to provide tertiary education for the youth. This gap is compelling our youth to seek educational opportunities abroad. Imagine the amount of foreign exchange Africa loses to the west through payment of school fees to foreign universities. I had both my two Masters degrees in the UK, and at any point foreign students dominated some of the UK university. In fact, education has become a major source of revenue for the UK economy. Ideally, African students should be attending African universities across the continent. Why is that not the case?
One economic analyst has argued that Africa and its leaders have so far failed to understand – or where they have understood, to apply – historical lessons concerning how the wealth of nations is created. Instead, they continue pandering to the dictates and self-interested conventional wisdom of globalisation.
Africa’s future success also requires creating a competitive continent based on value-added production and export. But it also requires selective engagement with international treaties which favour Africa’s development vision, if any. African countries must look beyond being increasingly primary suppliers of raw materials and dumping-grounds for cheap goods from abroad. African leaders’ belief that mineral resources and other raw commodities are automatically a source of wealth is an economic folly that lead us nowhere, as long as we cannot dictate the prices of those commodities. The irony is that while Africa is the world’s richest continent in terms of resource endowments, at the same time the continent remains the world’s poorest in terms of income per capita and GDP.
It must be emphasised that Africa’s future competitiveness and prosperity lies in the opportunities afforded by science, technology, and innovation. The Internet revolution must become a tool for empowering Africa’s youth to take up the challenge of entrepreneurship. This presents Africa’s leaders in both the public and private sectors an opportunity to provide policy direction for the commercialisation of African inventions.
Innovation must be deployed to cost-effective, competitive manufacturing and service industries. Hundreds of millions of Africans have yet to be lifted out of poverty in the manner China has accomplished – a path that other Asian countries, such as India and Vietnam, are following as well. Africa needs a Chinese growth-model in the foreseeable future.
The UN’s role
The UN should shore-up support for African governments in addressing the socio-economic impacts of the crisis – from ensuring essential health services, social protection and basic services to protecting jobs, guiding fiscal and macroeconomic policies and promoting social cohesion and community resilience. Thus, the UN’s sourcing of US$200billion for Africa as part of a comprehensive global response package is in the right direction. Further, collaboration between the UN, AU and European Union for a US$40million facility to end Violence against Women and Girls is forthright.
Future discussions should focus on providing concrete and actionable ideas on how Africa can turn the current challenging conditions into an opportunity and emerge from the crisis more resilient and well-positioned to achieve the Sustainable Development Goals (SDGs) and the AU’s Agenda 2063 action plans.
Africa Renewal (2020). After COVID-19, Africa can build back better
United Nations magazine.
(***The writer is a Development and Communications Management Specialist, and a Social Justice Advocate. All views expressed in this article are my personal views and do not represent those of any organization(s). (Email: [email protected]. Mobile: 0202642504/0243327586