With the continent of 1.2bn people facing a humanitarian and economic catastrophe still ahead of us, we look at what the pandemic’s likely impact on our economy will be, or will we use this as an opportunity for gains?
If the virus gave us no other choice, but to help ourselves, becoming self sufficient by default — even in small ways, could we?
Could we find a way to capacitate ourselves to turn our raw materials into products… if we had no other choice?
The coronavirus has fatally claimed 816 of Africa’s people, but has a massive positive recovery incline of 2895, out of more than 15 000 reported cases.
In comparison to other territories, this does not even put a dent in the worldwide cases, which are on its way to reaching 2 million, in a matter of hours of writing this, and about 125 000 deaths.
The recently released report of the economic impact on Africa, by Covid19, paints a concerning picture of what is to come (see last week’s blog post), even with Africa’s low case numbers, because the knock-on effects of Africa being cut off from supply chains will lead to economic inactivity, which the continent can hardly afford.
The report deduces a 1.5-point loss in economic growth for 2020, which could be potentially crippling for all countries on the continent, as the reliance on foreign markets is high, added to the continent’s (almost) inability to transform most of its raw materials into products — for high demand markets.
With most country borders closed to foreign travellers and even trade, there are also glaringly obvious opportunities. Our view is that the AfCFTA will become even more meaningful, long before it officially comes into effect on 1 July, later this year.
We predict that the African countries ‘that can’, will.
We are in a crisis not faced by current governments before, and politics have become somewhat subdued as leaders across the world scramble to save lives, and putting in mechanisms of precaution and prevention. Life saving equipment is desperately needed, as well as essential necessities of food, cleaning items, and pharmaceutical drugs.
The countries that can produce certain, high-demand products i.e. medical and surgical masks, medical gloves, sanitizer, PPE’s etc, will. Companies like Distell and SAB are producing sanitizer instead of alcohol as the lockdown in South Africa progresses to it’s 3rd week with a ban on alcohol. Manufacturing plants that made uniforms and garments are temporarily diversifying and making masks.
The countries that can … will.
The lockdown in most African countries is forcing a technological reliance that allows us to intensely look at Digital trade and cryptocurrencies. The vaccine is about 12–18 months away, according to the WHO — this means that life will actually never return to normal, ever. It also means that we are being ‘forced’ to diversify and help ourselves where we can.
We believe that we will use this opportunity to become as self sufficient as we can, in order to focus on our own economic growth, with the natural resources that Africa has been blessed with.
H.E. Wamkele Mene, SG of the AfCFTA had this ‘opportunity in crisis’ approach in an interview given to eNCA earlier today.
He said, “Most of the products that we require to fight this pandemic, really are linked to Africa’s industrial development, in a sense that we have to build our own generic drug industry, we have to ensure that the patent system we put in place for our trade regimes, and actually advances our development objectives.”
The continent’s first ever SG of the largest free trade area since the WTO, went on to say “this is an opportunity to expedite our long term industrial development objectives, particularly in pharmaceuticals, and it’s also an opportunity to look at eCommerce and digital trade which we now know from the experiences of the US and China, that some of their economic activity continued, even though there was a lockdown.”
This virus has pushed humankind way past our boundaries, so I don’t think it would be too much to think that if Africa really were hard-pressed, that they would rise to the occasion and challenge itself, even just a small way to self-sufficiency. Afterall, any progress made in these hard times, could potentially move the continent forward, many decades into the future.
We have a task of epic proportion in having to overcome this pandemic, compounded by being some of the poorest countries in the world.
But …we have also been given an opportunity, if we choose to see it like that, to find a way to mobilize economic activity, irrespective the hardship that faces us. We may succeed, we may fail, but we should never let an opportunity pass by, without trying, especially considering that we could fast-track our industrial development goals, and grow our economy.
What does one do when you have no other choice — we make a plan and figure it out, especially considering that the DNA of Africa is innovation and ingenuity.
Until next Tuesday’s Trade Talk … keep safe and sanitize, be well and wash your hands!
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