>>> Africa in “double" jeopardy
The global coronavirus ‘storm’ has swept through Africa, having strong impact on the regional economy, which is home to many of the poorest countries in the world. As economic activities are gradually being resumed, regional and global experts have urged prudence for the Dark Continent in mapping out its appropriate lockdown exit strategy, as well as calling for help from the international community so that Africa can mitigate the damage following the economic shock.
A recent report entitled "COVID-19: Lockdown exit strategies for Africa" by the United Nations Economic Commission for Africa (ECA) provided an estimation that a one-month full lockdown across Africa would cost the continent about 2.5% of its annual GDP, equivalent to about US$65.7 billion. This is separate from and in addition to the wider external impacts of COVID-19 on Africa such as lower commodity prices and reduced investment flow.
The ECA also provided seven exit proposal strategies to help African countries gradually lift the blockade and restore economic activities, while ensuring an effective response to the spread of the pandemic. These suggestions have been generated from the experiences of other countries and regions around the world.
Although the spread of COVID-19 in Africa is slower than in Asia and Europe, experts from the World Health Organisation (WHO) have repeatedly warned that the continent is vulnerable if the pandemic breaks out there because of its poor health infrastructure, as well as the high poverty rates and conflicts in many areas. The devastation of "super typhoon" COVID-19 to Africa is stronger than other regions because it not only has negative medical consequences but also mass insecurity and social instability.
Local disadvantaged workers are the most vulnerable and negatively affected group. Not only are they at high risk of contracting the disease due to a lack of prevention measures, but they are also at risk of losing their jobs. People in extreme poverty even face starvation as about 45 million Africans rely on emergency food aid.
According to international experts, Africa is on the verge of a serious economic crisis. An International Monetary Fund (IMF)'s economic outlook report highlighted that sub-Saharan Africa would face an unprecedented economic and health crisis. IMF Managing Director Kristalina Georgieva has said that an unprecedented recession is happening in Africa. It is likely that the continent will experience a decline from minus 2% to minus 5% of GDP this year, compared with the 3.2% growth expected before the pandemic.
This has not been seen on the Dark Continent for 25 years, threatening to reverse its development process. ECA Executive Secretary Vera Songwe has warned that zero growth would generate an additional 50 million poor people, attributed to the increase in the continent's population.
Following the trend of rebuilding the world economy, Africa is also further promoting economic integration to deal with the crisis. African Union new Special Envoy Abderrahmane Benkhalfa said that the union is moving forward, but countries need to work together to achieve deeper economic integration at the regional level. Only by this way will Africa create large economies that can cope with the current crisis and gain the trust of the World Bank (WB) and the IMF in providing financial assistance.
However, relying only on external assistance would make Africa passive, especially in the current context of funds from WHO, IMF or WB needing be shared and distributed to many places as COVID-19 has spread to over 210 countries and territories. Meanwhile, according to WHO estimates, if a way is not soon found to prevent the spread of the disease, the number of infection cases in Africa could skyrocket to 10 million people in the next 3-6 months and there could be at least 300,000 deaths. If such a bad scenario occurs, tens of millions more people could be pushed into extreme poverty, with long lasting and catastrophic consequences.
African countries are discussing plans to deal with the consequences of COVID-19 on their economies. However, in addition to strong decisions and drastic actions, the continent also needs the help of the international community, including the stronger participation of the large financial institutions in the region and the world.
