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Africa After Covid-19: Lessons for a More Resillient Continent

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Africa After Covid-19: Lessons for a More Resillient Continent AFRICA AFTER COVID-19: LESSONS FOR A MORE RESILLIENT CONTINENT Africa After COVID-19 Lessons for a More Resilient Continent Richard Morrow With a foreword by Dr Greg Mills November 2020 0 AFRICA AFTER COVID-19: LESSONS FOR A MORE RESILLIENT CONTINENT Published in November 2020 by The Brenthurst Foundation (Pty) Limited PO Box 61631, Johannesburg 2000, South Africa Tel +27-(0)11 274-2096 Fax +27-(0)11 274-2097 www.thebrenthurstfoundation.org All rights reserved. The material in this publication may not be reproduced, stored, or transmitted without the prior permission of the publisher. Short extracts may be quoted, provided the source is fully acknowledged. 1 AFRICA AFTER COVID-19: LESSONS FOR A MORE RESILLIENT CONTINENT Foreword the world – will face over the coming years: From climate change, to population The COVID-19 crisis has highlighted growth, and increasing competition over Africa’s perennial development and scarce resources. The next crisis is coming, governance challenges. From strained and it is imperative that African healthcare systems to fragile and governments are prepared if they wish to commodity-dependent economies, the mitigate large-scale damage. crisis has thrown the continent into a recession for the first time in a quarter of a The COVID-19 crisis should century and created widespread economic therefore be seen as an opportunity to upheaval. learn from the policy missteps of the past and better prepare for the future. As this The crisis offers a moment for paper illustrates, African governments and African leaders and policymakers not only policymakers can achieve this by focusing to reflect on the ensuing health and their attention around five key areas, economic challenges, but should demand namely: preparation, context, robustness, a review of why the continent remains so collaboration, and leadership. vulnerable to such events. Resilience is key to Africa’s future While there is much to learn from growth and success. Read this paper and the continent’s shortcomings in the wake learn how to prepare for the next crisis. of the crisis, there are also positive signs of growth and reasons for optimism. Firstly, Africa has recorded the lowest COVID-19 death count of any continent. Institutions such as the African Union and African Development Bank have demonstrated the value that multilateralism offers in playing a leading Dr Greg Mills role in co-ordinating the continent’s Director, The Brenthurst Foundation response to the pandemic and supporting governments through financial mechanisms. Consequent disruptions to global supply chains have also highlighted new opportunities for commerce on the continent, including local industrialisation for key products and goods. While such relative success stories provide reason to celebrate, governments cannot become complacent; there cannot be a return to ‘business as usual’ in the aftermath of this crisis. This is because COVID-19 is just one of many crises in which Africa – and 2 AFRICA AFTER COVID-19: LESSONS FOR A MORE RESILLIENT CONTINENT Focus Actions Preparation Develop Establish a dedicated Invest in appropriate risk fund which can only futureproofing management be utilised during a initiatives systems government- declared crisis Context Identify the crisis Create tailored Monitor constantly and triage the strategies which and adapt country to address the crisis accordingly determine the while causing limited most vulnerable disruption to the citizens and areas status quo Robustness Double-down on Promote domestic Support private diversification manufacturing sector growth efforts Supplement internal Catalyse the Collaboration Strengthen regional blocs and shortcomings with implementation of actors domestic, regional integration and international frameworks and support. plans Leadership Look beyond party Ensure government Engage with the politics and actions – such as public on a regular prioritise the spending and basis to assuage country procurement – are fears and instil transparent. confidence 3 AFRICA AFTER COVID-19: LESSONS FOR A MORE RESILLIENT CONTINENT Introduction highlighted many of Africa’s weaknesses: from weak fiscal reserves and a lack of As COVID-19 spread across the world economic diversification, to fragile supply during the first half of 2020, there was chains and strained healthcare facilities. A much concern around Africa’s return to ‘business as usual’ is not an preparedness and capacity to manage a option – there must be reform. health crisis of such magnitude. With its densely populated cities, limited As the recent pandemic has healthcare resources and expertise, and an illustrated, crises can occur at very short economic landscape which is highly notice and have cascading effects across susceptible to external shocks, many the world. African governments and believed COVID-19 would have a policymakers therefore need to be aware catastrophic impact on the continent. It of the continent’s shortcomings in the face was therefore never a question of if of COVID-19 and understand how they can COVID-19 would impact Africa, rather, better prepare for the next crisis. Their how big would the impact be. response should not be to wait until the next crisis presents itself, but to ensure When evaluating the impact today, that the correct measures are in place to the results are mixed. The number of mitigate any potential threat. deaths—currently 50,417 at the time of writing—is far below those seen elsewhere Drawing from the continent’s and in epidemiological forecasts. While experiences with COVID-19 at both a there is no definitive answer, many have national and regional level, this policy brief attributed the continent’s low death count aims to provide a series of to its demographic makeup, climate, and recommendations for African previous experience with health crises.1 2 governments and policymakers which will The economic situation paints a different equip them with a robust set of tools and picture, however. best practices to mitigate the threat of future crises, whatever they may be. While global growth is projected at -4.4% in 2020 (falling from 2.8% in 2019), Sub-Saharan Africa is forecasted to see COVID-19 Has Highlighted Africa’s growth fall to -3% for the year (declining Perennial Weaknesses from 3.2% in 2019). Commodity- In his foreword for the African dependent countries and those reliant on Economic Outlook 2020 report, Dr tourism are projected to be the hardest- Akinwumi Adesina, President of the hit, with growth expected to contract, on African Development Bank (AfDB), began average, by more than 4 percentage points by saying that “Africa’s economic outlook in 2020. The resulting impact of this continues to brighten”, and described how economic regression is a drop in real per the continent’s annual real GDP growth is capita income of 5.3% across the continent projected to accelerate to 3.9% in 2020 and an economic recession for the first and 4.1% in 2021.4 time in a quarter of a century.3 Six months later and as part of a Africa’s experience with COVID-19 COVID-19 supplement, the revised report ultimately serves as a watershed moment painted a different picture entirely: a real in how the continent, its governments and GDP contraction of between 5.6 and 7.3 institutions choose to prepare for future percentage points, GDP losses ranging crises. This comes as COVID-19 has from $173.1 billion to $236.7 billion in 4 AFRICA AFTER COVID-19: LESSONS FOR A MORE RESILLIENT CONTINENT 2020–2021, and worsening sovereign debt travel, all of which led to a reduced burdens.5 demand for commodities. While the This dramatic shift is the result of negative effects of this slowdown were felt the COVID-19 pandemic and its economic across the world, they were pronounced in backlash which has added a new layer of Africa due to its trade profile being complexity to Africa’s development dominated by commodities such as oil, challenges, hindering and in some minerals, and agricultural products. With instances reversing many positive signs of trade partners such as China and India – growth. both of whom account for a combined No country or region has escaped 22.7% of all African exports – halting the pandemic’s economic backlash. production during the first half of 2020, However, Africa has been particularly many African economies suffered as a hard-hit. result. Despite recording a relatively low Commodity-dependent countries death count when compared with the rest such as Nigeria and Angola, both of whom of the world (see Figure 1), COVID-19 has rely almost entirely on oil as their primary upended Africa’s economy and threatened export commodity, have been particularly millions of livelihoods. The International hard-hit. For Nigeria, crude oil accounts for Monetary Fund (IMF) has projected real an estimated 90% of the country’s foreign GDP growth to fall to -3% for 2020, exchange and 60% of government ushering in a continent-wide recession for revenue. the first time in a quarter of a century. This With the price of oil reaching a low economic disruption is primarily the result of $18 per barrel in April and climbing to of the continent’s economic landscape and $40 in October (in December 2019 the makeup. price was $60 per barrel), Nigeria is expected to see growth contract by 4.4% Figure 1: Total Number of Recorded in 2020 while in other oil-dependent COVID-19 Deaths, 25 November 2020 countries such as Libya and Equatorial Guinea, growth is forecasted to contract Source: Worldometer by as much as 25.4% and 9.2% 450,000 respectively. 400,000 Other commodities have also been 350,000 impacted as a result of COVID-19. A disruption to global supply chains has seen 300,000 coffee prices fluctuate, presenting an 250,000 enormous challenge to coffee growers, 200,000 farm workers, and downstream value 6 150,000 chain actors on the continent.
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