In his 1970 book of the same name, futurist Alvin Toffler originally used the phrase ‘Future Shock’ to characterise the psychological and sociological impacts of swift social and technical change. Today, the idea of future shock has been broadened to encompass any significant upheaval or alteration that upends people’s lives and communities, including pandemics, economic crises and natural disasters.
Building resilience against upcoming economic shocks in Africa is more important than ever as the world becomes more unpredictable and chaotic, moving from ‘VUCA’ to ‘BANI’. In the continent of Africa, it is the case of a region of extremes – where poverty coexists with breathtaking natural beauty, and where resilience and tenacity are put to the test by frequent shocks.
Africa has frequently been hit by unforeseen events that have left serious wounds on its people and economies, including natural disasters, economic crises and interconnected challenges like poverty, inequality and fragility that are made worse by the effects of climate change and rapid urbanisation. For sustainable economic development in Africa, there is a critical requirement for resilience against upcoming shocks. It is a cry to arms to protect the continent from the unknowable, and to make sure that its people can survive and prosper in the face of difficulty.
Understanding the underlying causes of vulnerability and creating strategies that address them on many scales – from the individual and family to the community and national levels, is critical for enhancing resilience against future shocks. But how can we pinpoint the main strategies and top techniques for fostering resilience in Africa?
To investigate this, three major themes must be considered:
- Strengthening systems for early warning and response
- Investing in social protection and risk reduction, and
- Fostering inclusive and sustainable economic growth
Strengthening Systems for Early Warning and Response
Setting up efficient early warning and response systems is one of the key tactics for enhancing resilience against future shocks. This entails keeping an eye on and predicting potential risks like severe weather conditions and disease outbreaks, as well as creating and putting into action strategies for quick and coordinated action to lessen the effects of these risks.
The African Risk Capacity (ARC), the Regional Centre for Mapping of Resources for Development (RCMRD) and the Africa Centre for Disease Control and Prevention (Africa CDC) are just a few projects and organisations in Africa working to improve early warning and response systems. These organisations are essential in helping governments and communities prepare for and respond to emergencies and catastrophes by giving them information and support.
Investing in Social Protection and Risk Reduction
Investing in social protection and risk-reduction initiatives is another essential approach for building resilience against upcoming shocks. Programmes for social protection that offer a safety-net for people and communities hit by shocks, such as cash transfers and food assistance, can aid in reducing poverty and vulnerability. Similar to this, risk reduction initiatives – like training in disaster risk reduction and community-based early warning systems – can serve to lessen the effects of shocks by boosting community readiness and resilience.
The Productive Safety Net Programme (PSNP) in Ethiopia and the Community-Based Adaptation (CBA) programme in Malawi are two examples of social protection and risk reduction programmes that have been put into place in Africa. These programmes have aided in lowering poverty and vulnerability while also boosting resilience to upcoming shocks.
Fostering Inclusive and Sustainable Economic Growth
Fostering inclusive and sustainable economic growth is a crucial final step in developing resilience against future shocks. In addition to investing in infrastructure and services that support economic development and enhance community well-being, this entails developing possibilities for good employment and revenue production.
Several programmes in Africa, like the African Union’s Agenda 2063 and the Africa Renewable Energy Initiative (AREI), aim to foster inclusive and sustainable economic growth. In addition to increasing chances for economic growth and job creation, these programmes seek to enhance access to electricity and other fundamental services.
Africa’s Special Economic Zones (SEZs) can foster inclusive and sustainable growth while also assisting in constructing resilience against upcoming economic crises. These areas generate income and job opportunities, draw foreign investment, and support the growth of services and infrastructure. It is essential to make sure that the goals of SEZs complement the overarching economic development goals and strategies of the host African countries if they are to effectively support Africa’s resilience.
The Dawa Industrial Zone, which seeks to complement Ghana’s larger economic development goals by encouraging job creation and attracting international investment, is an illustration of this alignment. The zone provides a variety of facilities and services; such as access to water and power, links to transportation, and assistance for companies in areas like tax and regulatory compliance. The Dawa Industrial Zone contributes to resilience against future economic shocks and the promotion of sustainable growth in Ghana and Africa by offering an inviting and supportive environment for investment.
Despite these, there are also other elements that contribute to Africa’s poor economic development prospects – which are frequently challenged by a wide range of unforeseeable occurrences including pandemics, financial crises and changes in commodity prices. These unanticipated occurrences not only damage the lives and livelihoods of millions but also slow down the transition to sustainable economic growth.
One significant difficulty, for instance, is the absence of reliable economic institutions and mechanisms. Africa’s economy is highly dependent on a few core industries including mining, agriculture and the oil and gas sector, making it vulnerable to changes in commodity prices and other external variables. The effects of economic shocks can also be made worse by the frequent lack of coordination between various levels of government and between various sectors.
Again, a lack of coordination frequently exists between various governmental levels and among various industries, which worsens the effects of economic shocks. An all-encompassing and coordinated strategy including several diverse actors – such as governments, international organisations, civil society and the commercial sector – is necessary to address these underlying structural concerns. Additionally, government and international organisations can collaborate to build and implement economic resilience plans that take into consideration the particular requirements of vulnerable populations, in order to strengthen financial systems and create social safety nets.
Improving economic resilience against future shocks requires a market-oriented approach that reduces barriers to trade and finance and addresses inequality. This approach involves increasing entrepreneurship opportunities and supporting small and medium-scale enterprises with financing and technology. Though criticised for contributing to inequality, this approach helps businesses invest in capital and skills, alleviate poverty by creating jobs through trade liberalisation, and build resilience.
Furthermore, better coordination between government and the private sector can help to build resilience against future economic shocks. Incorporating private sector experts into the formulation of public policy initiatives is one way to ensure economic resilience plans are in line with market requirements. Further, efforts aimed at developing partnerships with businesses and investors in order to boost employment and production can also play a role in fostering economic recovery after shocks.
Implementing market-oriented strategies faces limitations – such as low political will for inclusive growth, government failure to implement pro-economic development policies, and excessive reliance on government spending leading to financial crises. However, a market-oriented approach can be combined with government intervention in the economy; allowing for addressing issues like agricultural subsidies and promoting business and investment, while maintaining control over key policy decisions.
The aforementioned approaches’ importance is underscored by the fact that they can be applied to building economic resilience and promoting inclusive and sustainable economic growth in other regions of the world. It is essential that more developed countries support and share their experience in reducing poverty and vulnerability when aiding developing countries, so that they can increase their resilience to future crises. It is essential to take a holistic and comprehensive approach to economic development. This encompasses the reduction of vulnerabilities and promotion of resilience, but also emphasises development and transformation in terms of promoting an economy that is sustainable for all.
Conclusion
Globalised, interconnected economies have not only reduced the differences between rich and poor countries but also enlarged the direct and indirect impacts of shocks. While this increased connectivity has been positive in many ways, it has also exposed Africa to shocks that are more prevalent, severe and impactful than what it experienced in the previous centuries. These emerging global economic dynamics have also made it more difficult for governments to respond effectively to these shocks. In light of this unique set of circumstances, a variety of initiatives aimed at developing resilience against future shocks can be implemented in Africa.
The determination to achieve these goals is especially important given that African nations are likely to be the hardest hit by future economic shocks. In addition, both Africans and external actors which may be interested in Africa’s resources and markets need to recognise that adaptation-planning is a necessity for a more prosperous and stable Africa. That is to say, building resilience is a continuous process and requires a holistic and proactive approach – with a focus on strengthening systems, investing in social protection and risk reduction, and fostering inclusive and sustainable economic growth. It also requires strong partnerships and collaboration, as well as a deep understanding of the unique context and perspectives of the communities in which it is implemented. The writer is an award-winning financial advisory, trade and transformation consulting professional with almost two decades of enterprise leadership experience across EMEA.
