Africa’s economic, business and public policy analysts are forecasting that the speed and scope of the continent’s post-COVID-19 recovery will largely depend on the effective implementation of the African Continental Free Trade Area (AfCFTA). These views were contained in the recent UN publication, “Africa Renewal.”
The AfCFTA is an African Union (AU) initiative that creates a single market for goods and services, a customs union and guarantees the free movement of people and capital. Ghana is privileged to be hosting AfCFTA, the first and only continental organization to be headquartered in Accra. Ghanaians are thus eagerly waiting to have AfCFTA commence operations. Unfortunately, AfCFTA, which had been scheduled to commence on July 1 2020, has been put on hold because of COVID-19.
Both the Executive Secretary of the United Nations Economic Commission for Africa (UNECA), Vera Songwe, and the AU’s Commissioner for Trade and Industry, Albert Muchanga, have underscored the fact that free trade can spur Africa’s development in the medium to long term. In the short term, free trade in Africa could stimulate the post-COVID-19 development across the continent, and at the same time mitigating cross-border conflicts. The position of the two African technocrats resonates with empirical studies that confirm the catalytic role of trade in promoting peace and development among countries within an economic block.
These strong and positive views on AfCFTA dominated comments at the recent Africa Dialogue Series (ADS) under the topic “trade and silencing the guns in Africa.” The dialogue was held from May 20-22, 2020. It was to raise awareness of issues related to Africa’s peace, security and development after COVID 19 and beyond.
Ms. Songwe linked inclusive development to peace and security. “When people are unemployed, conflicts arise,” she said, adding that the AfCFTA offers an opportunity to “build back better after COVID-19. We need to provide things like jobs, energy, water and so on.” A UNECA report states that, on current statistics 86% of the global poor will be in Africa by 2030.
In a recent report the Economic Commission for Africa (ECA) estimated that a one-month full lockdown across Africa would cost the continent about 2.5 per cent of its annual GDP, equivalent to about $65.7 billion per month. This apart from the widely anticipated external impact of COVID-19 on Africa’s commodity exporters due to the steady decline in commodity prices. Perhaps, a way out is for Africa to make continental trading a reality, encourage the sharing of research and technology and promoting competitive advantage.
“History has shown that countries that trade among themselves rarely go to war.” “The benefit of free trade is that nations become more economically interdependent. They swim or sink together”, says Mr. Muchanga.
Stephen Karingi, the UNECA’s Director of Regional Integration, Infrastructure and Trade Division buttressed Muchanga’s point that countries participating in a free trade area easily cooperate and collaborate on security issues, citing the example of the Economic Community of West African States (ECOWAS); which in 1998 established a moratorium on small arms and implemented an import ban on weapons not approved by member states. “Trade fosters economic development and wealth that would have been lost to conflict,” Mr. Karingi buttressed the earlier points.
As stated earlier, among the most sensitive issues facing policymakers is the impact of COVID-19 lockdowns on food security. AfCFTA has been described as the single most important strategy to transform Africa’s traditional productive systems. It has been projected that the AfCFTA has the potential to boost Africa’s food supplies and overall food security.
According to Karingi thirty-nine African countries are net importers of basic food, particularly rice and wheat, despite the abundant natural resources to boost food production. Free trade plays a significant role in building resilience and mitigating the severity of food security shocks,” Karingi emphasized. The reality is that Africa is overly dependent on foreign food supplies, and COVID 19 has only brought this policy flaw to the fore. Thus, Africa’s COVID 19 exit policy must focus on food security. Else, we the global media will continue to portray as a ‘beggar continent, despite the endowment of uncountable human and natural resources.
COVID-19 and youth
Africa must also pay attention to youth empowerment as a COVID 19 exit strategy. According to the World Bank, the youth account for 60% of Africa’s jobless. This calls for African countries to intentionally and purposefully engage the youth in all sectors of the economy to enhance efficiency in doing business.
The AU Envoys emphasized agriculture remains one of the sectors on the continent with a comparative advantage, “and we need young people to think about how the continent is going to feed itself.” “We can choose to look at the crisis differently by asking: What are the opportunities that can come out of the crisis for young people, given that unemployment is a big problem on the continent?” says Ms. Okonjo-Iweala during a recent continental online discussion.
The UN’s Food and Agriculture Organization (FAO) statistics point to 40 per cent of post-harvest losses and food waste due to problems ranging from spillage and lack of proper post-harvest storage in sub-Saharan Africa.
Thus, Ms. Okonjo-Iweala challenged the youth to come up with innovative technologies for better food storage in the face of major post-harvest losses. “Here is where young people need to come up with innovations as to how we can store food better,” she said. But these technological innovations must be accompanied with proper infrastructure, including laying cables for broadband or accessing satellite links.
Ms. Okonjo-Iweala further challenged the youth to take keen interest in initiatives geared towards tracking Africa’s expenditure, such as working with civil society organizations to demand to know what governments are spending. The youth could also devise means to track and monitor the funds. “The continent is yours, you are 60% of the population. Be active in demanding transparency from your leaders. Innovate, innovate, innovate.
This is the moment,” she advised. However, the situation in Ghana suggests that getting the into agriculture has been a failed policy. Though it is the main stay of the economy venturing into agriculture remains unattractive, largely because banks in Ghana do not support the sector
In the new report titled; COVID-19: Lockdown exit strategies for Africa, the ECA proposes seven exit strategies that provide sustainable economic activity. The report sets out some of the exit strategies being proposed and outlines the risks involved for African countries. They are improving testing; lockdown until preventive or curative medicines are developed; contact tracing and mass testing; immunity permits; gradual segmented reopening; adaptive triggering; and mitigation. Mitigation gradually allows the infection to spread across the population with some social distancing measures in place. This could imply considerable risk in African populations with low health-care access and unknown comorbidities.
Emerging statistics indicate that COVID-19 has exacerbated deep fault lines in the global economy, exposing the divisions and inequalities of the world, especially in Africa. It has also increased and amplified the voices of those calling for inclusive policy agendas. There are some common threads running through the newly proposed policy agendas. To prepare the workforce for new technologies, governments must enhance education and training programs. Social protection and social insurance must be improved, especially for workers in the low-earning jobs.
In countries like Ghana, the impact of COVID 19 is beginning to bite the economy, as government tries to shore up the private sector to scale production and keep their workers. Undoubtedly COVID 19 has decreased the bargaining power of many workers. The possible decline in workers’ bargaining power points to the need for new forms of social dialogue and cooperation between employers and employees as we battle COVID 19.
Some economic analysts have suggested that better-designed progressive taxation must be introduced to address widening income inequality. Some believe that to combat our core economic problems – poverty, inequality, exclusion, and insecurity progressive taxation is one of the options.
Elsewhere focus is on good jobs. “Good jobs” are described as those that are relatively stable, paying well enough to sustain a reasonable living standard with some security and savings, ensure safe working conditions, and offer opportunities for career progression. Private sector firms that generate jobs are deemed to be contributing to the sustenance of their communities.
By contrast, a shortage of good jobs often carries high social and political costs- broken families, substance abuse, and crime, as well as declining trust in government. Especially for Ghana in an election year, the government needs to use deliberate policy interventions to create and sustain ‘good jobs.’ And the private sector is the key. From this perspective, the appropriate strategy to foster inclusion is one that combines spending on education, especially technical and vocational training and social insurance against risks such as unemployment, illness, and disability. Addressing these challenges requires a different strategy that tackles the creation of good jobs directly.
Moving forward, African governments must transform what their countries produce, how they produce it, and who gets a say in these decisions. This requires not just new policies, but also the revision of existing ones. Above all, a new strategy must abandon the traditional separation between pro-growth policies and social policies to boost economic growth. It must be emphasized that faster economic growth after COVID 19 requires investing in new technologies and productive opportunities among small and medium businesses, and the youth, who form a large part of the labour force.
We stop discriminating as to who gets what job or opportunity, simply because of ‘class’ or ‘elitism.’ Our penchant for giving jobs and opportunities to relatives of friends, alumni of schools and members of identifiable associations should stop. Economically and socially, better employment prospects for all, irrespective of social and religious status has the capacity of reducing inequality and economic insecurity. Simply put, economic and social agendas must aim at reforming social and economic inequalities as part of the COVID 19 exit strategy.
Project Syndicate (2020). “The Post-Pandemic Social Contract”. Available (https://www.project-syndicate.org/commentary/new-social-contract-must-target-good-job-creation-by-dani-rodrik-and-stefanie-stantcheva)
UN Africa Renewal (2020) COVID-19 lockdown exit strategies ahttps://www.un.org/africarenewal/news/coronavirus/eca-proposes-covid-19-exit-strategies-bring-african-economies-back-track
***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