By Gregory Kronsten
This week, we’ll share some of the remarks made in a webinar organized by the Royal African Society on & # 39; African economies after COVID-19 & # 39 ;. External panelists were: Donald Kaberuka, envoy of the African Union (AU) and former president of the African Development Bank; Nanjana Nyabola, political analyst and author; Arkebe Oqubay, a minister in the Ethiopian prime minister's office; and Stephen Karingi, a specialist in regional integration and trade at the United Nations Economic Commission for Africa (UNECA). We let readers place Nigeria in the context of the many comments from panelists.
Kaberuka's starting point was that Africa is less prepared and more vulnerable in this pandemic than in the 2007-08 global financial crisis. While Africa faces its first recession in 25 years, certain governments have shown resilience through the smart use of social capital. Kaberuka highlighted the Ivory Coast, Ethiopia, Kenya, Rwanda and Senegal in this group.
Africa has a very limited fiscal space to fight the pandemic, which is a far cry from Japan's package of measures, which together represent about 20% of its GDP. The AU has therefore identified a financing gap of $ 150 billion, of which $ 57 billion has already been disbursed or committed. His preference would be to create new SDRs by the IMF selectively. (The US Treasury Secretary indicated his government's opposition to the idea.)
Nyabola observed very modest public health systems. Kenya is better equipped in East Africa, but has only 518 beds in intensive care units (ICUs) for a population of 49 million, so no government could handle an outbreak of, say, Italy's intensity. She argued that the use of force in the implementation of blockades was counterproductive because it alienated people, citing the use of the military in imposing quarantines and curfews in Kenya and South Africa. She concluded that Africa showed a high degree of solidarity and cooperation in the crisis, which contrasted with export bans and the rejection of orders for essential equipment seen elsewhere.
Oqubay described the Ethiopian government's approach to the virus, which drew many favorable international comments. He started working in January because he felt that its many borders and its role as China's gateway to Africa made Ethiopia vulnerable. So far, only 300 cases have been reported. He attributed the success to a rapid development of public health capacity at the local and community level and to a comprehensive "tracking and tracking" program.
In addition, the authorities made extensive use of simple text messages to educate the public. To the extent that there was fiscal space, the government concentrated its support on dynamic export and manufacturing businesses. (We would add that Ethiopia has many supporters for the fulfillment of its development policy, which we should see in the strong centralization of power that some have characterized as a command economy.)
Finally, Karingi said that African farmers should not miss this planting season because of the pandemic, if they are to avoid critical shortages next season. Food price inflation has already been fueled by the higher cost of imported rice and wheat. He highlighted the opportunity to accelerate the African Continental Free Trade Area. Under the sequencing of existing protocols, e-commerce is at the back of the queue, but its positive contribution to the response to the virus internationally has suggested that it move closer to the top of the list.
Gregory Kronsten, Director of Research in Macroeconomics and Fixed Income