The traditional leadership and redeemer posture of Nigeria in Africa has, in recent years, been put into question.
Issues like corruption and infrastructural decay have held the country down from playing a leadership role in Africa. As have transitions from one poor leadership to another. A visionary leadership is lacking while public institutions are weak, inept and compromised. Decades of political patronage and nepotism have seen a corrosion of quality and performance in the public service.
In addition, the intractable problem of Boko Haram and Islamic State, coupled with kidnappings, have created a security crisis. All continue to shatter the myth of military invincibility and the might of the Nigerian state.
In the beginning, it was not so. From independence in 1960, Nigeria took upon itself the role of uniting Africa against western recolonisation. The continent, from then on in, became the centre-piece of its foreign policy. The fact that nations were living under foreign rule made it possible to galvanise them around a common cause. This led to the creation of the Organisation of African Unity – now the African Union – in 1963 and Economic Community of West African States in 1975.
Nigeria assumed a leading role in these events as it forged a foreign policy with a strong Afrocentric posture. In fact, so frenetic was its involvement in this role that it sometimes paid little attention to the home front.
Nigeria’s leadership role on the continent was a product of the vision, dreams and, sometimes, whims of the founding fathers. They were nevertheless premised on real national capacity. Jaja Wachukwu, Nigeria’s first external affairs minister noted in 1960 that:
Our country is the largest single unit in Africa… we are not going to abdicate the position in which God Almighty has placed us. The whole black continent is looking up to this country to liberate it from thraldom.
This defined the country’s behaviour and continental outlook and has continued to influence successive administrations – weak or effective.
Assuming a leadership role
The sheer size of Nigeria’s population – the largest on the continent which rose from 48.3 million in 1963 to over 200 million in 2020 — gave the country the idea that Africa was its natural preoccupation.
In addition, its colonial experience and the abundance of its oil resources and wealth have empowered Nigeria economically. This made it possible for the country to pursue an ambitious foreign policy. It also permitted Nigeria to finance its Civil War, strengthening its international independence. And oil made possible an unparalleled post-war recovery.
Nigeria has used its influence to good effect and to good ends. For example, it worked with other countries in the West African sub-region to establish the Economic Community of West African States in 1975. It went on to push for the prevention and resolution of devastating conflicts that engulfed Liberia in 1992. The conflict spilled over into Sierra Leone and other countries in the region. Nigeria spearheaded the cessation of hostilities and created the cease-fire monitoring group to bring a total end to the civil strife and restore democracy in both countries.
Many observers agree that the sterling performance of the monitoring group is unparalleled in the history of regional organisations the world over. It has now become a model to emulate for its operational efficiency and for giving regional actors pride of place in the resolution of regional conflicts.
It spent over US$10 billion in these peace campaigns and also lost soldiers in the process.
Nigeria has not limited its peacekeeping role to West Africa. It has also been engaged in Burundi, Democratic Republic of the Congo, Zimbabwe and Ethiopia-Eritrea.
The country also played the most important role in fighting apartheid in Southern Africa and supporting liberation movements on the continent.
But Nigeria has not been immune to challenges facing countries on the continent. Corruption, misappropriation of public funds, electoral malpractices, insurgency and terrorism have devastated its capacity and weakened its moral fortitude to lead the continent.
Amidst enormous wealth, poverty in Nigeria is endemic . It could even become the poverty capital of the world, according to The World Poverty Clock. Nigerians have been reduced to the behest of the politicians that tie them to gridlock of “stomach infrastructure”. This is a new trend which reflects institutionalised and structural poverty. Deprivation puts people in a vulnerable and compromised position where the desperation for survival makes them sell their votes and conscience.
The slow movement of the current administration is also killing the Nigerian spirit and leadership posture. South Africa, Ghana and even Madagascar have acted faster in continental and global politics, including during times of emergency such as the current COVID-19 pandemic. But Nigeria seems content with a spectator position.
Nigeria has been relegated to the background of international affairs. To turn this around requires a revisit to the roots – and mowing the lawns afterwards. Nigeria must take stock of its own performance and capacities and re-position itself – first from within.
If Nigerian leaders are increasingly determined to proffer African solutions to their problems, then political structures and institutions must be reformed to reflect conditions suitable for sustainable development. Without a formidable political base, the economy will remain weak and fragile. The political base is crucial, because, the state is the repository of all ramifications and dimensions of power – political, economic, technological and military. And the purpose of the state is to authoritatively allocate these resources.
There is also a need to empower people to mobilise their local resources and to use them for development. And, of course, public funds should not be concentrated in the hands of few individuals, who may be tempted to steal them. An accountable system is one in which money management has several checks.
Oil wealth has been the country’s nemesis, a curse that has promoted corruption and blatant bleeding of the economy. But it is declining in value and as source of national revenue. Now is the time for Nigeria to make good its repeated and well-advertised intentions to diversify the economy.
A de-emphasis on oil would open the door to smarter ideas about how to create wealth. It would also herald in getting rid of a great deal of the phlegm of corruption which has played such a central role in Nigeria’s infrastructural decay, eroded its influence and given it such a negative image.
Added to this is the succession of weak rulers since 2007.
African leaders do not look towards Nigeria anymore for counsel, inspiration and help. They think Nigeria has a lot on its plate already and needs help. The potential is still there for Nigeria to return to power; but it takes leadership to (re)build the auspicious atmosphere and to activate the country’s potential – the two steps required to regain that enviable frontliner spot on the continent.
The Supreme Court of Zambia has just delivered a fundamental and remarkable Judgement. It has fined Mopani Copper Mines $13 million!
This is a case in which the Zambia Revenue Authority (ZRA) has been battling with Mopani Copper Mines and its Swiss parent company Glencore since 2009. Glencore PLC is a British multinational commodity trading and mining company with its headquarters based in Baar, Switzerland.
The background is that the ZRA conducted an Audit of Mopani Copper Mines for the period 2006 – 2009, which revealed that the transactions between the company and its Swiss parent multinational, Glencore International AG (GIAG) violated the Arm’s Length Standards (ALS).
An arm’s length transaction refers to a business deal or transaction in which a buyer and seller act independently without one party influencing the other.
Chief Justice Ireen Mambilima sitting with Justice Nigel Mutuna and Justice Mumba Malila ruled that any tax authority would find serious misgivings on the lack of arm’s length on the revealed transactions between Mopani and Glencore.
The Court found Mopani liable of abusing transfer pricing and used it as a mechanism to avoid paying full taxes due to ZRA.
The core part of domestic revenue mobilization for any country is taxation of its citizens and the private sector. For Zambia, its mineral resources present an unparalleled economic opportunity to increase domestic revenue through effective taxation of the mining sector.
Despite the tremendous wealth inherent in this sector, Zambia has been struggling to obtain significant financial benefits through taxes from the sector.
This is due to various factors including the volatile mining tax regime policies but also the increasing tax-avoidance schemes perpetrated by mine houses that might appear legal but are aggressively aimed at reducing the amount of tax payable.
Multinationals increasingly abuse transfer pricing as a mechanism to avoid paying tax. Developing economies are now increasingly aware of these schemes especially the abuse of transfer pricing. African governments are now establishing robust legislative and administrative frameworks to deal with transfer pricing issues.
For Zambia, curbing the abuse of transfer pricing, is a development financing issue, because without adequate tax revenues, our ability to mobilise domestic resources for development is heavily hampered.
The sensitive challenge for Zambia has been to balance the need to protect its tax base while not seen to be discouraging or hampering foreign direct investment in the mining sector.
Zambia has joined many African countries that have begun to put in place, legal rules on the taxation of cross border transactions and the latest Supreme Court Judgement will go a long way in enhancing these measures.
It should be noted that this “arm’s length principle” as emphasised by the Supreme Court of Zambia is at the core of most global standards on controlling transfer pricing perpetrated by multinationals.
AFRICA LOSES $50 BILLION A YEAR IN ILLICIT FINANCIAL FLOWS.
Over the last 50 years, Africa is estimated to have lost in excess of $1 trillion in illicit financial flows (Kar and Cartwright-Smith 2010; Kar and Leblanc 2013).
This amount excludes capital flight. Capital flight is a large-scale exodus of financial assets and capital from a nation due to events such as political or economic instability, currency devaluation or the imposition of capital CONTROLS. This process could entirely be legal or licit.
To resolve the crisis of illicit financial flows and outflows from Africa, the African Union and the United Nations Economic Commission for Africa tasked the fourth Joint African Union Commission and United Nations Economic Commission for Africa (AUC/ECA) Conference of African Ministers of Finance, Planning and Economic Development held in 2011to handle the matter.
The Conference established a High Level Panel on Illicit Financial Flows from Africa. Illicit financial flows (IFFs) is defined as money that is illegally earned, transferred or
utilize. These funds typically originate from three sources: commercial tax evasion, trade mis-invoicing and the abuse of transfer pricing.
Other origins of illicit financial flows include criminal
activities such as the drug trade, human trafficking, illegal arms dealing, and smuggling of contraband, illegal wildlife trade and bribery and theft by corrupt government officials.
The Panel headed by South Africa’s former president, Thabo Mbeki, established that Africa loses over $50 billion a year through tax avoidance and fraud schemes largely perpetrated by multinational corporations operating in Africa.
It became clear that Africa was a net-creditor to the rest of the world, despite the regular inflow of official development
assistance. The continent continues to suffer from a crisis of insufficient resources for development, largely caused by illicit financial flows.
The Report of the High Level Panel on Illicit Financial Flows from Africa recommended that Africa must implement measures to radically reduce illicit capital outflows from Africa.
The Panel recognised that the goals of ending poverty in Africa, the goal to achieve Sustainable Development Goals (SDGs) aimed at reducing inequality within and among nations, and the hope to give practical effect to the fundamental objective of the right of all to development, was attainable if African governments and its partners curbed the illicit financial outflows.
About The Author: Amb. Emmanuel Mwamba is Zambia’s Permanent Representative to the African Union and to the United Nations Economic Commission for Africa (ECA).
I must repeat that Africa deserves to be paid a compensation for the damages COVID-19 pandemic is inflicting on lives and livelihoods.
In their prickly reaction to my April 16 Washington Post #ChinaMustPay article (a response published in the Guardian Newspaper of May 3, 2020), the Government of China through their Embassy in Nigeria missed the opportunity to responsibly address the serious issues raised.
I must repeat that Africa deserves to be paid a compensation for the damages COVID-19 pandemic is inflicting on lives and livelihoods.
Unfortunately and unfairly, my country, Nigeria, is one of fifty-four countries in Africa that are struggling to respond to the disruptive effects of China’s failure to take responsibility for a pandemic that could have been easily contained and localized to avoid the ruin it has caused our continent and the world at large.
Since Beijing failed to adhere to basic scientific and research transparency in the critical early days of the COVID-19 outbreak in Wuhan, it must accept responsibility with humility. Dr. Obiageli Ezekwesili
Therefore, a legitimate demand for accountability and payment of penalties by rich and powerful countries for damages their behaviors do to vulnerable people ought not to attract the kind of sour response China released.
There are six points that authorities in Beijing ought to humbly consider.
First, it is now clear to the world that China’s opaque handling of the pandemic is costing my country, our continent and people too much in lost lives and livelihoods. The unjustified suffering of the poor and vulnerable brought on by the actions of a comparatively rich and powerful country demands a new system for addressing global inequities.
I maintain that information in the public domain points to the fact that China suppressed vital information from the rest of the world on COVID-19. The burden to present convincing counter-factual information lies with China and,so far, it has failed to do so.
Second, I assert again that China owes Africa yet-to-be-estimated compensation. Its acts of negligence in December and early January resulted in a fast-spreading global pandemic that collapsed the continent’s economic growth from 2.9% in 2019 to negative 5.1% in 2020. Most importantly, China should, in the interim, take responsibility and ease the severe fiscal pressure on our countries, by announcing a cancellation of over $140 Billion in loans its government, contractors and banks have advanced to Africa over the last two decades.
Following this debt cancelation, an international consortium made up of the G20, China, Africa Union Commission and global institutions like the United Nations, World Bank and IMF should be constituted to assess the full extent of damages and the compensation due.
Third, Chinese authorities should know that we are Africans who are not lackeys of any power. Laying a baseless charge of “dancing to the tune of others” to an African reveals an appalling mindset toward our continent. It may in fact be this same sort of attitude that frames the extremely offensive profiling of Africans who are resident in China.
We do not dance to the drumbeat of any country or any continent -- our sole tune is the African Beat.
Fourth, the spirit of transparency ought to be in China’s own interest. It is intriguing that Beijing has so far failed to embrace my suggestion to allow an Independent International Panel of Experts to review and assess China’s handling of the COVID19 pandemic. Why? Is China afraid of full disclosure that can help the world learn vital lessons on how to manage global threats and risks better?
Fifth, this global New Normal requires faster prevention of cross-border risks and threats. The best antidotes to minimize global negative externalities that harm the weak and vulnerable are absolute transparency and removal of information asymmetries by countries.
As part of this New Normal, the global community has a duty to learn and correct past failures to penalize bad behavior. My #ChinaMustPay article is a call therefore to innovate global mechanisms that compel countries to start now to do the right things whenever risks and threats emerge.
Innovation is what China rode on to economic greatness. What then is wrong with asking for such as a legitimate part of our global New Normal?
Sixth, it should be in China’s historic and conscientious national interest to prevent future exploitation of vulnerable countries by economic supwerpowers. I did acknowledge previous global risks that similarly emanated from other rich and powerful countries and injured Africa’s economic growth and development. I find it hard to believe that China, given its history and experience with colonial mistreatment, would want this cyclical pattern to continue. Do the authorities in Beijing really want Africans to simply accept harmful actions of rich and powerful countries?
The United Nations Economic Commission for Africa in an April 2020 report on coronavirus pandemic stated that “over 300,000 Africans may lose their lives due to COVID-19.” According to the Africa Union Commission, the coronavirus is already collapsing many economies in Africa and worsening poverty. Already, the livelihoods of hundreds of millions on the continent, especially children, young people and women are already lost to the damaging economic disruptions caused by COVID-19.
The IMF calls the impact of the pandemic on Africa as “the worst reading on record”. It went further to state that Africa’s “Fiscal space is limited, and fiscal financing needs to address the crisis are large - at least $114 billion for this year”. International rating agencies have massively downgraded the credit ratings of African countries making investors more skittish.
I proposed a penalty system in the form of a Global Risk Burden Tax that will from now be payable to weaker and more vulnerable countries and their people whenever forced to bear a disproportionate burden from preventable global risks that emanate from rich and powerful countries.Such penalty tax would also serve as a disincentive to prevent the kind of unbecoming actions and decisions that escalated the spread of the deadly virus out of Wuhan.
China must know that where our lives and livelihoods are concerned, no country, regardless of how powerful it may be, can intimidate us Africans ever again.
Beijing should do the right thing now and accept the debt it owes Africa as a result of its failures on COVID-19. That is how responsible world powers should behave in the 21st Century if they are to be taken seriously.
Ezekwesili is the former vice-president for the Africa region at the World Bank and the former minister of education for Nigeria. She is the co-convener of #BringBackOurGirls Movement.
“We know how to bring the economy back to life. What we don’t know is how to bring the dead back to life.” – Nana Akufo Addo, president of Ghana
The total number of deaths in the coronavirus pandemic has passed the 250,000 mark. The health and economic calamity continues to evolve rapidly; the world is scrambling to understand it.
Even as there are signs that the curve is flattening in the U.S., scene of one-third of the world’s fatalities, estimates of how many will die have doubled from 60 to 120,000. Italy and Spain, two of the worst hit countries in Europe, have peaked.
California, the largest state in America, has flattened the curve, joining Asian nations such as South Korea, Taiwan, Japan and, of course, China. Europeans and North Americans are starting to emerge from lockdown. New Zealand claims to have totally eliminated community transmission of coronavirus.
But the virus is continuing to take its toll. The United Kingdom has passed the 20,000 death mark; Russia, which appeared initially to have escaped the worst, is battling with an outbreak that led President Vladimir Putin to declare that “we don’t have much to brag about.”
New infections and deaths are on the rise in Brazil and Ecuador, giving rise to fears that the third wave of the coronavirus will be experienced in the developing world.
Despite dire forecasts, Africa has so far experienced only a fraction of the number of cases seen elsewhere.
By late April, the known infections worldwide was 3.4 million and the number of deaths about 240,000. Africa had only 45,000 reported cases, with 1,800 deaths – less than one per cent of the total in both categories.
Though it is too early to claim anything conclusive, fears of a tsunami of cases in Africa have not been lost yet.
In a continent as large as Africa with 54 countries, it is hard to pinpoint what explains this. One possibility is that, other than South Africa and Ghana, there has been less testing. This is suggested by the fact that Africa’s morbidity rate – the number of people who die after contracting the virus – is around 5 per cent, compared to a world average of less than two per cent.
South Africa – with 90 deaths and about 5,000 cases – has a case fatality rate (CFR) of about 1.8 per cent, somewhat less than the rest of the region but close to the global average.
The global CFR could in reality be much lower, as it is believed that many more people have been infected than tested positive. This is certainly the case in the U.S. where, as more testing has been carried out, the CFR has decreased.
Further complicating the picture are suggestions based on data from New York, Italy, the U.K. and Spain that the actual number of deaths from COVID-19 is at least twice the official number. People who die at home or in nursing homes before they are tested are not counted.
Curve flattens in South Africa’s powerhouses
While the number of positive cases in South Africa has risen along with more testing, it is still not increasing at anywhere near the level of the worst hit regions.
Relatively speaking, South Africa has contained the spread since the first cases were brought in on a flight from Italy in early March.
The South African response was decisive and carefully thought out and much credit goes to President Cyril Ramaphosa and Health Minister Zweli Mkhize in the way they have led the response and mobilised the country.
Because of our history with the HIV/AIDS crisis, the country has some of the best infectious disease experts and epidemiologists in the world, exemplified by the husband and wife team of Salim Abdool Karim and Qarraisha Abdool Karim.
South Africa was also willing to learn from what worked in other countries such as South Korea and China.
Most experts agree that the lockdown has limited the spread of the virus, reducing infection rates and delaying the onset of the peak and buying us time.
But there is no cause for complacency. Professor Salim Karim has warned that preventing exponential spread in South Africa is very, very unlikely.
Professor Shabir Madhi, of Wits University, who is heading the public health subcommittee advising the president, estimates that up to 45,000 South Africans could die from COVID-19. That means the worst is yet to come.
Nigeria, with a long experience of dealing with infectious diseases – and a history of containing Ebola during the 2014 epidemic – has also flattened out the number of positive cases, although new cases continue to rise.
Still, there is growing concern out of the most populous State, Kano, where a number of elderly people, including some of the State’s most prominent citizens, have died in recent weeks. These deaths have been attributed to other causes but with the negligible amount of testing, we are unable to know for sure.
But while the continent’s two biggest economic powers are not typical, it is striking how uniform the African numbers are. No African country has yet been affected anywhere close to the scale of the worst affected countries.
The African Exception?
From the beginning, there have been warnings that Africa, with its dense urban slums, large numbers of people with chronic illnesses, and inadequate public health systems could be facing a catastrophe.
But this has so far proven not to be the case.
In response, there have been suggestions on social media that people are resistant to the disease by virtue of being black.
The U.S. is, sadly, proving the opposite. African-Americans are dying at alarmingly higher rates than other population groups.
In Chicago, about 70 per cent of deaths are black, while the city is only 30 per cent black. In Milwaukee in Wisconsin, where only 26 per cent are black, 73 per cent of those dying are black. In the nation’s capital, Washington DC, it is 44 per cent and 72 per cent.
Eugene Scott, in the Washington Post, puts this down to four factors that are specific to African-Americans: higher rates of underlying health conditions and less access to health care; blacks holding a lot of the “essential” jobs that make social distancing difficult; insufficient information from the government reaching the black community; and racial disparities in housing.
All of these factors are prevalent to an equal or even greater degree in South Africa, where housing for the majority of the population and the access to health care is often worse.
Unlike the Great Recession of a decade ago, all the major economies will be struggling or crashing at the same time. Kristalina Georgieva, IMF managing director, said 170 of its 189 member countries will suffer falling output in 2020. “The bleak outlook applies to advanced and developing economies alike. This crisis knows no boundaries. Everybody hurts”…
What is extraordinary is how much we still don’t know about the silent killer that the New York Times this week described as capricious: “The question of why the virus has overwhelmed some places and left others relatively untouched is a puzzle that has spawned numerous theories and speculations but no definitive answers.”
What seems to be the case is that Africa was the last continent to be affected because of proportionately fewer air links with the rest of the world. By moving to lockdown early on, many African authorities have slowed the spread of the virus in the general population, but we have to contend with the reality that the constrictions on economic activity cannot be sustained.
The Africa Centres for Disease Control has warned that it is too early to draw any firm conclusion, but there are a few clues as to what is going on in Africa.
Africa benefits from having a youthful population.
A Lancet Infectious Diseases paper found that globally, the case fatality rate for those under the age of 60 is 1.4 per cent. For those over the age of 60, the fatality rate jumps to 4.5 per cent. For those 80 and over, COVID-19 appears to have a 13.4 per cent fatality rate.
The global CFR among those under 20 is 0.2 per cent.
Africa has a median age of 19.4, against 40 in Europe. Of the continent’s 1.2 billion people, only about 50 million are over 60.
Africa might have benefited from being in the tropics and from the fact that the virus first struck during summer in the Southern Hemisphere.
Research from Johns Hopkins University in Baltimore indicates that higher temperatures and humidity are correlated with a lower rate of coronavirus spread, similar to the correlation between climate and the influenza virus.
This is confirmed by researchers from Spain and Finland, who found that 95 per cent of positive cases occurred at temperatures between -2 and 10 °C.
Researchers from Beihang University in China, found that in the early days of the outbreak, hot and humid cities saw a slower rate of spread than cold and dry ones.
If this is valid, this is an ominous sign for South Africa, as it heads into the winter months.
Several recent studies have suggested a link between the BCG (the Bacillus Calmette-Guerin) vaccine – which was developed to fight tuberculosis – and the rate of death from COVID-19.
Tuberculosis is caused by a type of bacteria, while COVID-19 is caused by a virus. But the BCG vaccine might help people build immune responses to things other than tuberculosis.
Medical researchers in the U.S. and U.K. concluded by analysing data from 178 countries that those countries that do not have a BCG vaccination policy saw ten times greater incidence of and mortality from COVID-19, compared with those that do. Some of the worst hit countries such as the U.S., Spain and Italy do not administer BCG.
Almost all African countries administer BCG, though some only began doing so in the 1990s.
This link has not been scientifically established, but clinical trials are now being held to determine whether those nations that make BCG vaccination mandatory at birth are less susceptible to high COVID-19 related deaths. If this could be conclusively shown, it would be a massive breakthrough.
A World On Life Support
The path of the coronavirus and response to the pandemic has devastated the global economy. The Financial Times describes it as the worst collapse since the Second World War, and the most difficult moment for the global economy in almost a century.
The International Monetary Fund (IMF) expects the global economy to shrink by 3 per cent this year. This is far worse than its 0.1 per cent dip in the Great Recession year of 2009.
The lockdowns, business shutdowns and travel restrictions are destroying demand, at the same time as a financial crisis is unfolding.
In a worst case scenario, the world is heading into a global Great Depression.
Unlike the Great Recession of a decade ago, all the major economies will be struggling or crashing at the same time. Kristalina Georgieva, IMF managing director, said 170 of its 189 member countries will suffer falling output in 2020. “The bleak outlook applies to advanced and developing economies alike. This crisis knows no boundaries. Everybody hurts,” she said.
The IMF predicts that worldwide trade will plummet by 11 per cent this year. Global manufacturing supply chains are being broken.
During the Great Recession, China continued to grow at 9 per cent. Although it is reopening its economy ahead of the rest of the world, China’s GDP plunged by 5.8 per cent in the first quarter of this year, dipping into recession for the first time in 44 years. Meanwhile, the country remains on guard against a second wave of infection.
The U.S. economy is at a standstill and economists are projecting unemployment to reach 20 per cent in the second quarter. The IMF expects the U.S. economy to contract by 5.9 per cent this year.
Most of Europe is on lockdown and Germany, France and the U.K. are in deep recession. The Eurozone will suffer a 7.5 per cent drop and Japan, 5.2 per cent. U.K. output could dip by 6.5 per cent this year.
Emerging markets and low-income nations across Africa, Latin America and much of Asia are at especially high risk.
On a more positive note, the recent monetary and fiscal policy responses from across the world have generated some optimism for a rebound.
The world is desperate for good news, but there will be no end to the pandemic and return to pre-crisis behaviour until a vaccine is developed, which could be well into 2021. The impact of the coronavirus is likely to be prolonged and the peaks could be followed by more peaks.
The IMF forecasts that there will be 5.8 per cent global growth in 2021, but this is at best a thumb-suck because there is still so much uncertainty.
Governments in the developed world have been willing to make massive interventions to stimulate demand and interventions by central banks to ensure liquidity by keeping the cost of borrowing low and financing credit supply.
The U.S. enacted three aid packages worth $2.7 trillion. The Federal Reserve has enacted a $2.3 trillion rescue package for the economy. But at least 32 million Americans have lost their jobs and there is more pain to come.
And President Donald Trump’s erratic moves could jeopardise a U.S. recovery, even as the rest of the world struggles to get back on its feet.
African Economies In Pain
Even though Africa is the continent least scarred by the health crisis, it could end up the most damaged by the economic calamity.
Emerging market assets have been precipitously dumped and there has been capital flight worse than during the Great Recession.
Commodity prices that have buoyed African economies for the last quarter century have collapsed. Major mining operations have been mothballed.
Nigeria, Africa’s largest economy, has been driven into deep recession by the oil price crash – and is expected to contract by up to 7 per cent this year. Angola has been battered as well.
The tourism industry, a key part of the economies of countries such as Kenya, Botswana, Tanzania, Namibia and South Africa, has shut down.
Remittances from diaspora communities have declined dramatically.
There has been a huge fall-off of trade with partners such as China, Europe and the U.S.
The World Bank predicts that growth in Africa could fall to between minus 2.1 per cent and minus 5.1 per cent, led by severe downturns in Nigeria, Angola and South Africa.
Africa’s domestic economies have had a stranglehold placed on them where countries have implemented social distancing measures, closed borders and imposed lockdowns.
The majority of Africans work and trade in informal markets, meaning that millions are now unable to work.
The African Union estimates that up to 20 million workers could lose their jobs. Even in developed countries, workers are just one pay-cheque away from being completely broke. The scale and impact in human terms are unimaginable.
People have no money to spend, further collapsing demand. There are signs of widespread hunger and the World Bank is warning of a food security crisis. Social and political unrest will surely follow.
And this is before the full health impact is felt.
The World Bank, IMF and African Development Bank have announced billions of dollars in emergency credit facilities to African countries and called for bilateral debt relief. But that will not be enough.
Kristalina Georgieva, managing director of the IMF, estimates that emerging countries may need as much as $2.5 trillion in support. African leaders are calling for, at the very least, a debt standstill.
The needs are insatiable – scaling up the health sector response, maintaining wage payments amidst a massive wave of firm bankruptcies, relieving social distress and growing hunger and poverty, all while protecting the overall stability of the financial system.
President Ramaphosa’s R500 billion social and economic package is intended to go some way towards alleviating the worst of the crisis in the short term but much will depend on its execution and the fiscal sustainability of the programme. Given the experience of the past decade, can we expect those implementing the programme to ensure that this massive pot of money will find its way to the intended recipients?
The early signs are not encouraging.
In order to pay for it, Ramaphosa has indicated that he will use whatever is available to prop up the economy and prevent social collapse, including IMF loans, but at some point the bill will come due.
Other African countries do not have our options. They are being called upon to drain their treasuries to provide support for the poor and unemployed and to bolster their health systems, just as tax revenues have literally collapsed. Ken Ofori-Atta, the Ghanaian Finance minister, says he is green with envy at the “unthinkable stimulus packages” being announced by the developed nations.
“Their generous tool kits are not available to us,” he laments.
Living With a Pandemic
There is great uncertainty about the speed of the recovery, largely because it depends on the continued path of the virus – and medical advancements that have not yet happened.
The world is desperate for good news, but there will be no end to the pandemic and return to pre-crisis behaviour until a vaccine is developed, which could be well into 2021. The impact of the coronavirus is likely to be prolonged and the peaks could be followed by more peaks.
With so much at stake, there is an unprecedented global race underway to produce a vaccine, with seven clinical trials underway, and a group from Oxford University providing the most optimistic timeline of about six months.
For Africa, the main lesson is, in the words of Ken Ofori-Atta, that it is time to challenge the unbalanced nature of the global architecture. Which means, perhaps, that the point is not to replace one overlord with another but to imagine a world order in which we all have a place at the table…
The ability of the virus to mutate and to come back, maybe in a more virulent form, is why the Asian nations emerging at the other end of the first wave are not dropping their guard.
The lockdown strategy has been implemented to flatten the curve – to prevent the pandemic occurring in a compressed time frame – and buy time to prepare health facilities for a spike in cases.
In the absence of a vaccine, therapies of existing drugs are being used for COVID-19 patients. But while studies are being fast-tracked around the world, they are not yet conclusive. The drug, remdesivir, originally developed to treat Ebola, is said to be showing some promising early results but other therapies such as the much touted hydroxychloroquine are still viewed with skepticism and only used to treat the most severe cases.
In the absence of a vaccine, attempts to move countries out of lockdown – which are now underway – have to be strategic, phased, targeted and managed on a long-term basis – and accompanied by widespread testing and surveillance and proper equipment for health care providers. Countries could also go back into lockdown if there are further spikes.
There will be no way forward without knowing where the enemy is – tracking the virus and isolating it. South Africa has one of the world’s most innovative programmes, sending 28,000 health workers into communities for screening and testing.
Some of what we know about catastrophic viral pandemics is drawn from the experience of the 1918 Spanish flu which killed between 50 million and 100 million people.
The flu came in three waves. The first relatively mild version was in March 1918 and it appeared to have run its course by the northern summer. The second more virulent and infectious version struck in September 1918 and the third continued through 1919.
The second wave came to South Africa via two troopships of soldiers who were returning from the Western front and stopped in Freetown en route, where the flu was raging. When they docked in Cape Town, they were quarantined, but not effectively, and set off a wave of infections that ended with the deaths of about 300,000 people – six per cent of the population of the country at the time.
Epidemiologists have puzzled over why the diamond miners in Kimberley, almost a quarter of whom died in the flu, died at 35 times the rate of the gold miners in Witwatersrand.
It is now believed that the miners on the Reef had already developed some immunity from the first strain that had traveled up from Durban earlier in the year. The more isolated Kimberley miners only experienced the second, more lethal wave.
The End of Globalisation?
In seeking to find a culprit for the pandemic, we do not need to look too far: the globalised economy, the era of free and easy travel and movement between countries spread the virus. Globalisation made the globe more vulnerable to a pandemic.
The upside of globalisation – the free movement of capital and ideas and the free trade that has driven the global economy since 1945 – is presently being reassessed in a harsher light. Some assume that the age of globalisation is now over.
French President Emmanuel Macron sees the crisis as an “existential event for humanity” that will change the nature of globalisation and the structure of international capitalism.
Is it likely that nation states will turn themselves into fortresses surrounded by moats to keep out aliens and foreigners? Depending on the devastation to economies and the forces of populist nationalism that will be unleashed by the pandemic, that could well be the outcome.
But it would hard to see recovery in such a world. It was a global trade war in the 1930s – spurred on by the U.S. Congress’ Smoot-Hawley Tariff Act – that was one of the major drivers of the Great Depression and helped set the stage for the Second World War.
The stronger argument is that the moment demands greater community between nations in fighting a common enemy. What the coronavirus has taught us is that the existential threats of the 21st Century, from the pandemic to climate change, are ones that threaten us all.
The very qualities required to defeat this virus – scientific knowhow, capable and responsible government, global solidarity, basic humanity – are what we need for survival and prosperity in the years ahead.
These are the very elements that are threatened that at this moment.
However, instead of co-ordinated policy responses from governments around the world, we see a fracturing of international co-operation.
We should not forget what the last quarter century of turbo-charged globalisation has brought us. It has lifted billions of people out of extreme poverty, not just in India and China, but in many other nations, and in large parts of Africa as well.
However, as the gap closed between the developed and the developing world, it brought stagnation and job losses to the middle and working classes of the U.S. and Europe, and widened inequality between a global super-class with unimaginable wealth and just about everybody else.
It also gave us the pandemic which, if nothing else, is a moment to reflect and reset.
One reason for pessimism is that the U.S., which was the prime mover and leader of the post-1945 world, has been missing in action.
Trump has steered the U.S. away from any constructive international role. He has rejected calls to create a global taskforce to deal with the pandemic and threatened to cut funding to the World Health Organisation in the middle of the worst health crisis in a century. While his administration’s incompetence at home has cost many lives, its reputation abroad has been badly tarnished.
Trump has dashed hopes that the world’s two leading economic powers will co-operate. He has indicated that he wants to run for re-election on a China-baiting platform, exacerbating the ill feeling that has been generated by the last three years of trade wars.
With the U.S. abdicating, many people are finding it hard to imagine a globalised world without a hegemon, which is why many believe China will takes the U.S.’ place in a new global order. Xi Jinping has, for the last three years, already emerged as the most outspoken champion of globalisation.
But to be the leader of a free world, one must also possess the magic ingredient of soft power, which presupposes an admiration for one’s system of governance. China, with the recent experience of the Hong Kong protests and the many thousands of Muslim Uighars still in detention, not to mention its initial lack of transparency around the outbreak of the coronavirus, might not be best placed to lead the new world order.
There’s also a lot of anger towards China right now. Oby Ezekwesili, Nigeria’s former minister of Education and a former vice president of the World Bank, has argued that China should pay compensation to Africa for failing to transparently and effectively manage the global catastrophe.
For Africa, the main lesson is, in the words of Ken Ofori-Atta, that it is time to challenge the unbalanced nature of the global architecture. Which means, perhaps, that the point is not to replace one overlord with another but to imagine a world order in which we all have a place at the table, and in which the two greatest powers find it in themselves to work together, and with the rest of us, for a common humanity.
If there’s any upside to the unprecedented uncertainty gripping the world right now, its that the economic fallout has opened up a new debate about the right sort of policies to have. Its time to think creatively about what we can do and where we want to take this country, this continent and this planet. Its time for new thinking, imagination and boldness.
Mcebisi Jonas is the chairman of MTN and former deputy Mminister of Finance in South Africa.
Madagascar’s President Andry Rajoelina gave a long, televised address last weekend praising the benefits of artemisia, a herbal remedy increasingly promoted as a treatment for Covid-19. It's also gaining traction in other African countries. But the World Health Organization has warned it must be tested for efficacy and adverse side effects.
During a one-and-a-half-hour speech on Sunday, Rajoelina sat next to an artemisia plant, a bottle of artemisia tonic and boxes of Covid-Organics, the branded artemisia products that he is promoting as a treatment for the coronavirus.
“Clinical trials of artemisia-based injections on new Covid-19 patients will start next week,” said Rajoelina, saying that any criticism of the plant-based remedy must stop, according to RFI’s correspondent in Antananarivo.
The president called for people to continue following measures put in place to stop the spread of the virus. But much of Rajoelina’s address focused on artemisia. He talked about increasing production of the plant and setting up a factory to process it over the next month.
“This plant can treat lots of diseases. If we don’t act quickly, other researchers will overtake us,” said Rajoelina, as reported by RFI correspondent Laetitia Bezain.
Authorities in other African countries have expressed interest in using artemisia in the fight against Covid-19.
Tanzania’s President John Magufuli said he was in touch with Madagascar’s government and had despatched an airplane to pick up supplies of artemisia.
Following a video conference with Rajoelina, Congo Brazzaville’s President Denis Sassou Nguesso said his country would also import artemisia and adopt the Covid-Organics treatment, according to government spokesman Thierry Moungalla.
Senegal on 24 April placed its first order, depicted in a social media post by Madagascar’s leader.
The scramble for artemisia
The Malagasy authorities are not the only ones to see the potential benefit of artemisia in the struggle against Covid-19 – Germany’s Max Planck Institute of Colloids and Interfaces and US company ArtemiLife Inc are also working on tests.
The study, conducted in Denmark and Germany, focuses on the same plant as the one cultivated and processed in Madagascar – artemisia annua. The plant materials for the test are being provided by ArtemiLife Inc, a Delaware-based company, that says it has fields growing artemisia outside Lexington, Kentucky.
ArtemiLife is advertising two products containing artemisia annua – tea and coffee. The company recommends that customers take the products twice daily “to maintain an active shield and to maximize the benefits”.
A 30-day supply of ArtemiCafe is to be available for sale at 91 euros and ArtemiTea for 73 euros. Customers are encouraged to register their interest on the ArtemiLife website since the products are currently in development and not yet on sale.
The company says these products are “not intended to diagnose, treat, cure, or prevent any disease”. ArtemiLife says their claims about artemisia have not been evaluated by the US Food and Drug Administration.
Centuries-old malaria treatment
Artemisia annua has long been used for the treatment of malaria. The plant's antimalarial properties were first identified in 340 BC as part of traditional Chinese medicine, according to expert Zhou Yiqing from the Institute of Microbiology and Epidemiology of the Chinese Academy of Military Medical Sciences.
Zhou's research in the 1970s led to the plant's application against the mosquito-borne disease.
Artemisia was selected for further research from a list of herbs and traditional medicines used to treat malaria screened by experts.
The research, known as Project 523, involved two groups pursuing antimalarial drug development: one investigating synthetic medicine, the other examining traditional remedies.
Project 523 first isolated the compound artemisinin from the plant and then ran clinical trials confirming its antimalarial effects.
Researchers later identified the molecular structure of artemisinin and discovered more derivatives, eventually producing the first artemisinin-based combination therapy (ACT) for malaria, known as Coartem.
ACT therapy combined artemisinin with another active ingredient to provide different actions within the same treatment. ACTs are considered by the World Health Organization (WHO) to be the most effective antimalarial medicines available today.
Artemisia in fight against HIV and SARS?
Artemisia has been researched for many other medicinal uses besides combatting malaria, perhaps providing some guidance as to its possible use in treatment of Covid-19.
A study by researchers at Leiden University and the University of Basel published in the Journal of Ethnopharmacology looked at artemisia tea infusions and their activity in combatting HIV.
Chinese researchers in July 2005 published a study exploring the use of herbal extracts for antiviral properties in treatment of Severe Acute Respiratory Syndrome (SARS), a respiratory illness caused by a coronavirus.
The research, published in the Antiviral Research journal by experts at different institutions and companies in Beijing, identified four herbal extracts, including artemisia, that could be considered as candidates for the development of drugs for treatment of SARS.
Threatening the pharmaceutical industry
Artemisia is the subject of some questions surrounding its use against malaria, notably the form of treatment administered –either a tea infusion based on plant extracts, or artemisinin, which is usually produced by pharmaceutical companies through a chemical process of semi-synthesis.
A January 2019 documentary produced by France 24 asked whether the use of artemisia tea infusions for malaria treatment was discouraged and subject to pressure by big pharmaceuticals.
The documentary suggested that offering infusions based on the plant could threaten the business of synthetic ACT treatments produced by drugs companies.
At forefront of this battle is Congolese doctor Jérôme Munyangi from the faculty of medicine at the University of Kolweri-Lualaba.
Munyangi has conducted research in the Democratic Republic of Congo comparing tea infusions to an ACT treatment using a combination of artesunate, a derivative of artemisinin, and amodiaquine, another commonly used antimalarial drug.
The large-scale, double blind randomised clinical trial was published in the Phytomedicine journal in April 2019. It concludes that infusions of artemisia annua and artemisia afra, another species of the plant, provide better outcomes than the ACT treatment.
Fears over drug resistance
However, the WHO in its guidance on malaria treatment warns against using artemisinin as an oral monotherapy. It says this promotes the development of drug resistance to artemisinin as a treatment.
Use of the artemisia plant is outlawed in France. The French health ministry has warned about a lack of rigorous, methodically controlled clinical trials proving its effectiveness. The National Agency for the Safety of Medicines and Health Products (ANSM) has previously acted to ban products based on artemisia.
French non-governmental organisations such as La Maison de l’Artemisia continue to promote the plant’s use as a malaria treatment, claiming “the plant can save millions of lives”. The NGO focuses on countries in sub-Saharan Africa, encouraging the use of artemisia as a tea infusion, although it warns people from outside malaria-endemic countries against taking it.
Malaria and Covid-19 not the same
Artemisia’s use in treating malaria is clearly beneficial in the fight against the deadly parasite, although some raise questions about the exact nature of the treatment. But its use in combatting malaria does not necessarily mean it will be effective against Covid-19.
The African Union bloc said it was in contact with Madagascar with a view to obtain technical data regarding the safety and efficiency of artemisia used to treat Covid-19, according to a statement.
“It was agreed that the member state would furnish the African Union with necessary details regarding the herbal remedy,” the AU said on Tuesday.
The Africa Centres for Disease Control and Prevention (Africa CDC) would “review the scientific data gathered so far on the safety and efficacy", the AU added.
Frank van der Kooy, who led the research on artemisia and treatment of HIV at Leiden University and the University of Basel, told RFI that he could not continue this work due to a lack of funding, while research on its use against SARS must be “cautiously interpreted”.
“At the moment we are therefore not sure if artemisia annua/afra will be active against Covid-19 but I do believe it warrants conducting clinical trials, which in turn needs funding,” said van der Kooy, who currently works at North-West University in South Africa.
The WHO is careful not to rule out the possible use of artemisia as a treatment for Covid-19, saying it should be tested for its efficacy and adverse side effects.
“Africans deserve to use medicines tested to the same standards as people in the rest of the world,” the WHO said in a statement published on Monday. “Even if therapies are derived from traditional practice and natural, establishing their efficacy and safety through rigorous clinical trials is critical.”
“Many plants and substances are being proposed without the minimum requirements and evidence of quality, safety and efficacy. The use of products to treat Covid-19, which have not been robustly investigated can put people in danger, giving a false sense of security and distracting them from hand washing and physical distancing which are cardinal in Covid-19 prevention,” the WHO added.
Global remittances are forecast to decline by about 20% this year as the economic crisis caused by the coronavirus pandemic shuts down business activity, the World Bank says.
This is the sharpest decline on record for what has become a lifeline for many people in Africa and elsewhere.
Migrant workers will not send as much money home because their employment and pay is vulnerable.
Globally money sent home by workers abroad to low and middle-income countries is forecast to fall by about $445bn (£360bn).
The decline for sub-Saharan Africa is predicted to be 23% and amount to $37bn this year.
The World Bank report also highlights how the cost of sending money to the region is about a third more expensive than the global average.
The average commission charged for sending $200 is 9%, but for southern Africa it can cost as much as 20%.
African diplomats have threatened to shut down their consulates following the racist attacks and maltreatment of Nigerians and other Africans by Chinese officials in Guangzhou, Guangdong Province.
The African Consuls-General in a protest letter to the Chinese Government noted that Africans were being denied hotel accommodation upon arrival in Guangzhou, adding that they were also subjected to an additional 14-day quarantine at various isolation centres after being cleared and issued an appropriate certificate of release by the Centralised Quarantine and Medical Observation.
They warned Beijing that their home countries might retaliate against Chinese nationals if the stigmatisation of Nigerians and other Africans was not speedily resolved.
A viral video had shown some Nigerians in Guangzhou being evicted from their homes and hotels and chased down the streets by Chinese policemen.
The Nigerians complained that they were placed under compulsory 14-day quarantine, adding that despite testing negative for COVID-19, the authorities insisted that the quarantine period would be extended by another two weeks, a directive they resisted.
The Chinese officials were also said to have confiscated the passports of the Nigerians.
A video of Mr Razaq Lawal, head of the Nigerian consulate in Guangzhou, tackling a Chinese official for seizing the passports of some Nigerians later surfaced on the Internet.
Following the incident, the Minister of Foreign Affairs, Geoffrey Onyeama, had summoned the Chinese Ambassador to Nigeria, Dr Zhou Pingjian, twice in a week to express the displeasure of the Federal Government on the development.
The minister said the government would hasten the evacuation of Nigerians in China and also demand compensation from the Chinese authorities.
But taking up the matter with Beijing, the African diplomats accused China of discriminating against their nationals, warning that the situation could degenerate if not properly handled.
In line with Article 5 of the Vienna Convention on Consular Relations 1963, they called on the Chinese Foreign Affairs Office to intervene and address the complaints.
The Consuls demanded a prompt reversal of Guangdong’s policy on “the selective attack on Africans as well as unannounced visits to homes after the working hours.”
They also asked the Chinese authorities to direct hotels to accommodate Africans and stop forcible eviction of the nationals from their apartments.
The diplomats stated, “In the consequence that the issues are not properly resolved promptly, the African Consulates-General will be left with no option but to communicate to our home country the racial bias and discrimination against Africans in China.
“We would also bring the same to the attention of the international community-United Nations, International Criminal Court, International Court of Arbitration, World Health Organisation, Amnesty International, African Union, among others.
“We would have no option but to retaliate the same ill-treatment meted out on our nationals to the Chinese nationals in our various countries; close all the African Consulates in Guangzhou until further notice and engage in general street protest by the African Consulates-General and nationals,” the diplomats warned.
Africa was supposed to be China’s new stomping grounds. Instead, the novel coronavirus has spawned a growing backlash that threatens to unwind the ties Beijing has carefully cultivated over decades.
The trigger for the burgeoning diplomatic crisis: Anger over the treatment of African citizens living in China and frustration at Beijing’s position on granting debt relief to fight against the outbreak.
China has spent untold billions in Africa since its emergence as a global power, investing in its natural resources, underwriting massive infrastructure projects and wooing its leaders. The campaign has bought China friends and allies in multilateral institutions such as the United Nations and the World Health Organization, undermining the West’s once-reliable lock on the postwar world order while fueling its economy back home.
But that decadeslong quest for influence in Africa was gravely challenged last week when a group of disgruntled African ambassadors in Beijing wrote to Foreign Affairs Minister Wang Yi to complain that citizens from Togo, Nigeria and Benin living in Guangzhou, southern China, were evicted from their homes and made to undergo obligatory testing for Covid-19.
“In some cases, the men were pulled out of their families and quarantined in hotels alone,” the note, seen by POLITICO, said.
The incident, which caused widespread discontent both within Africa and among the diaspora after videos posted on social media showed people of African descent being evicted from their homes, resulting in a rare diplomatic showdown between Chinese and African officials.
It also broke a long-standing tradition of Africa voicing its problems with China — the continent’s biggest trade partner — behind closed doors.
In one incident, Nigeria’s speaker of the House of Representatives, Femi Gbajabiamila, posted a video of himself summoning Chinese Ambassador Zhou Pingjian to his office where he expressed his displeasure about a Nigerian man being evicted from his home.
While nobody expects China to lose its place as Africa’s biggest bilateral lender and trade partner, analysts and African diplomats say there is a distinct possibility of lasting damage. Reluctance from China to endorse a G-20 decision to suspend Africa’s debt payments until the end of the year has exacerbated the sense of frustration, they said.
“There is a lot of tension within the relationship. I think both of these issues are the newest manifestations of long-term problems,” said Cobus van Staden, a senior researcher at the South African Institute of International Affairs. “Africa’s official response [to its citizens in China] took into account popular sentiment a lot more than it usually would have.”
Some scholars have documented how politicians in Africa have boosted their electoral base by mobilizing anti-Chinese sentiment, while many ordinary people perceive China’s success in the region as a threat to their own well-being.
Although China’s government and the billionaire founder of the Alibaba Group, Jack Ma, have been among the most generous and eager members of the international community to assist Africa in fighting Covid-19, Beijing’s overtaking of the World Bank as the biggest single lender to Africa has made it less inclined to write off the money it is owed. The Chinese government and the China Development Bank lent more than $150 billion to Africa between 2000 and 2018, according to the China Africa Research Initiative at Johns Hopkins School of Advanced International Studies.
U.S. officials, including Tibor Nagy, assistant secretary for the U.S. State Department's Bureau of African Affairs, have strongly condemned the treatment of Africans in China, resulting in China snapping back at Washington by accusing it of sowing unnecessary discord between the pair.
Chinese officials have moved quickly to seal the emerging rift. Ambassador Liu Yuxi, Beijing’s head of mission to the African Union, released a photo of himself giving a socially distanced elbow bump to his African counterpart — while distancing the Beijing government from the authorities in Guangzhou.
At the same time, Zhang Minjing, political counselor at the mission, downplayed the controversy in comments to POLITICO. Beijing had “championed” a debt initiative agreed upon by the G-20, he said, and is “committed to taking all possible steps to support the poor.” As for the recent tumult in Guangzhou, he said, “the rock-solid China-Africa Friendship will not be affected by isolated incidents.”
“China is against any differential treatment targeting any specific group of people. China and Africa are good brothers and comrades-in-arms. We are always there for each other come rain or shine,” he added.
But there are also growing concerns in Beijing that its multibillion-dollar infrastructure projects in places such as Zimbabwe have now ground to a halt because of the coronavirus. Not only are engineering personnel unable to travel to the continent, but construction materials are running low as supply chains dry up.
Africans are going to need all the help they can get. After years of rapid growth, the International Monetary Fund on Wednesday said sub-Saharan Africa’s gross domestic product would shrink this year by 1.6 percent due to the effects of the coronavirus, low oil prices and poor commodity prices. In Ethiopia alone, the government has estimated that 1.4 million jobs will be lost over the next three months, according to a document seen by POLITICO, roughly 3 percent of the workforce. Africa has recorded 17,701 coronavirus cases and 915 deaths — a toll that will likely climb rapidly, and likely underestimates the scale of the continent's predicament.
So far, the rest of the world has done little to help. On Monday, the IMF granted $215 million in initial debt relief to 25 African countries — a relative pittance compared with the vast sums those countries owe. On Wednesday, G-20 nations, which include China, the U.S., India and others, did offer to suspend debt payments until the end of 2020 despite calls from French President Emmanuel Macron to help African countries by “massively canceling their debt.”
But Ngozi Okonjo-Iweala, one of four special envoys to the African Union to solicit G-20 support in dealing with the coronavirus, said Africa was still “pushing for more.” In an interview, Okonjo-Iweala said she believed “China is coming along” to provide Africa with debt relief across the board and not simply on a case-by-case basis. “I don’t believe it’s against supporting African countries on this. I’ve heard actually to the contrary,” she said. “What we need from China is not a case-by-case examination, but an across-the-board agreement.”
Stephen Karingi, director of the trade division at the U.N.’s Economic Commission for Africa, said support from the international community should be “weighed against the damage Covid-19 will cause” in Africa. “We think that 2020 and 2021 will be difficult and support should have that in mind or such a horizon,” Karingi said.
How damaging the latest events will be to the political and commercial ties that have made China Africa’s largest trading partner are unclear.
On the official level, there are signs that all will soon be forgotten. A senior African diplomat to the African Union, who spoke on the condition of anonymity due to the sensitive nature of the issue, said, “When it comes to China, I doubt we will see long-term problems.”
“They’ve got a lot invested on the continent, in the AU, in this city,” the official added.
“They’re everywhere. Realistically, I think it’s important both sides understand why this is happening and try and resolve this mutually.”
Still, a host of African officials have made sure China does not get away lightly with its treatment of Africans living in China. Over the weekend, Moussa Faki, chairman of the African Union Commission, said he had “invited” the Chinese ambassador to the AU to express his “extreme concern” for the situation, while Chinese ambassadors in Nigeria and Ghana were summoned to give an explanation.
President Cyril Ramaphosa of South Africa said the ill treatment of African nationals in China was “inconsistent with the excellent relations that exist between China and Africa, dating back to China’s support during the decolonization struggle in Africa.”
A senior AU official, who spoke on the condition of anonymity due to the sensitive nature of the matter, said Chinese officials were particularly alarmed by the public dimension of the incident that exploded on social media. But, the official said, many African nations were pleased by remarks delivered by Foreign Ministry spokesman Zhao Lijian on Sunday in which he underlined “the African side’s reasonable concerns and legitimate appeals.”
Whether the people living on the continent forget so easily is another matter altogether.
“It’s going to be contentious among those communities for a lot longer,” said van Staden of the South African Institute of International Affairs.
More than half of all African countries have now imposed lockdown measures aimed at flattening the curve of new COVID-19 infections.
The reason for taking such drastic measures while infection rates are still relatively low, compared to the rest of the world, is that they could help Africa prevent the pandemic from making an even greater impact.
People operating in the informal economy, who make a living based on daily transactions, are the hardest hit. Unlike many developed countries, Africa is largely urbanising without commensurate industrialisation. Formal job growth lags far behind. The urban informal economy is the main generator of income. It accounts for almost 72% of non-agricultural employment across the continent.
Urban dwellers use a major portion of their daily income on food. This is because they are less likely than rural people to be able to grow their own food. The poorest urban dwellers can spend up to 60% of their income on food.
The Nobel prize winning economist Amartya Sen famously observed that hunger is usually not a result of an insufficient supply of food, but rather a result of political constructs that result in those most vulnerable not being able to access the right foods. For the poorest urban dwellers this vulnerability is aggravated when their incomes fall at the same time as food prices rise – a situation already happening in developing country cities facing lockdowns.
Governments must therefore focus on keeping food supply chains working. This will require a combination of interventions. The first is to ensure that sufficient food reaches urban markets and that it remains affordable. They will also need to ensure that food can be accessed by those who need it most and in such a way that continues to ensure the health and safety of everyone.
Keeping food supply chains going
Prior to the COVID-19 crisis, food in African cities was already expensive. Urban populations pay about 35% more for food than people pay elsewhere. One of the drivers is the sprawling and fragmented form of many African cities, due to poor planning. This increases the costs of land, rent and transport. It translates into higher costs throughout supply chains, including those for food.
During the COVID-19 crisis, food supply chains were initially disrupted by the closure of borders. This is a worry for low-income countries, which are much more dependent on food imports.
Next came bans on public and private transportation inside countries, threatening the supply of food to cities. The bans also threaten supply chains of imported food via cities to rural areas.
Many countries, like Kenya, are exempting official food supply shipments from these bans. But food that supplies markets in African cities is often transported informally and in small quantities. More importantly, it is transported through the same public system that has now been temporarily shut down in many places.
In some countries, prices for some food products rose by more than 100% at the start of national lockdowns, driven by panic and uncertainty. India’s case shows that disruptions in the food supply chain will result in higher food prices, hitting the urban poor the hardest.
Food aid is only a temporary stop gap
Some African countries are distributing food aid as a stopgap. Rwanda was one of the first. Uganda has followed, undertaking food distributions for 1.5 million vulnerable residents of Greater Kampala.
Distributing food aid may be complicated by the fact that it is not always clear who should be targeted. In many developing countries, vulnerability, poverty and hunger exist across the entire population. But during a crisis like COVID-19, people who rely on the market rather than growing their own food will be the most heavily affected. This is why both Rwanda and Uganda decided initially to target urban populations.
Even within cities, understanding who to target is difficult.
In more developed countries, comprehensive tax and employment registers make it easier to identify vulnerable populations. Without comprehensive registers, it may be logistically easier to get people to come to a central area to receive food if they need it. But not only does this undermine social distancing, having large numbers of desperate people in one place can bring about chaos.
Food aid may prove unsustainable. It’s not yet clear how long lockdowns will need to last to flatten the curve sufficiently. And an effective vaccine is at least 18 months away. Yet the longer the lockdowns last, the more people may be pushed into poverty. More people will need food aid and for longer. Many African governments are already cash strapped and so free food distribution cannot be a long term strategy.
That’s why ensuring stable access to affordable food is key.
Managing informal markets
Many African cities are sprawling due to their largely unplanned growth. As people flock to cities, they tend to live first on the outskirts where it is more affordable. Markets and individual vendors set up there to serve the informal settlements. These are important sources of food security for urban households. Because they are close to where people live, they enable daily purchases, particularly of fresh produce. Informal sector operators survive from income earned daily.
This decentralised food vending is often less tolerated by governments. But it may actually prove to be an advantage. It means people don’t need to go far from home for food. It also may be easier to prevent crowds of people forming and more feasible than enforcing strict distancing measures in market spaces. What’s more, these informal vendors, many of whom are women, are often the most economically vulnerable, so they need to be able to continue to sell.
Where there are larger markets, measures that allow them to operate safely will be key. This is for non-food items too, to allow people to generate income to purchase food. Measures will need to include effective sanitation and hand-washing stations. Targeting individual behaviour may also be highly effective.
Many of these markets already tend to be more organised, so it may be easier to work with them to implement measures. For example, vendors could work in rotation to decongest markets on any one day. This has already been done with some success in some places in India.
To avoid a hunger crisis, governments must think of sustainable solutions to keep food supply chains working. The COVID-19 crisis may last for many more months.
Africa is expected to reverse an economic contraction linked to the coronavirus crisis next year after containment measures are eased, the International Monetary Fund said, but the impact will be felt for years to come.
Sub-Saharan Africa’s gross domestic product is on track to shrink this year by 1.6% — its worst performance on record — because of the combined effects of the disease and plummeting oil and commodities prices. That is around 5.2% lower than the IMF’s pre-pandemic forecast.
Growth of around 4% should follow in 2021, according to the IMF’s regional economic outlook for Africa, released on Wednesday.
But the Fund warned that firm forecasts are currently hard to make. If the coronavirus outbreak is more protracted than currently expected and causes a deeper global recession, it sees Africa’s economy shrinking an additional 2.5% this year.
“I don’t think we’ve ever had as difficult a time trying to do projections in the institution, certainly in my 25 years,” Abebe Aemro Selassie, head of the IMF’s Africa department, told Reuters in an interview.
The Fund’s baseline scenario assumes that measures aimed at containing the disease, including lockdowns, will be concentrated in this year’s second quarter.
“We hope to see a rebound after that, with some recovery into next year. In some sectors such as construction or services, there will be pent-up demand and there could be a bounce back in those sectors,” Selassie said.
The pandemic will cause persistent, large losses of output “with the level of real per capita GDP expected to be about 4.5% lower by 2024 compared with the pre-COVID-19 projections,” the report stated.
African oil exporters can expect a 2.8% contraction this year, according to the IMF report. Other resource-intensive economies will shrink 2.7%.
Non-resource-intensive countries are expected to see growth decline to 2.0% from 6.2% last year. Within this group, however, tourism-dependent countries, including Cape Verde, Comoros, Gambia, Mauritius, São Tomé and Príncipe, and Seychelles, are projected to see a 5.1% contraction.
To fight the pandemic, the IMF is advising countries to ramp up health spending, release fiscal support to mitigate its economic impact and ease monetary policy stances to support growth.
International support is also essential, it said.
The Fund is set to provide some $11 billion to 32 sub-Saharan countries that have requested help in recent weeks.
To give countries breathing room during the crisis, the IMF and World Bank have proposed suspending debt service this year for the world’s poorest countries. Wealthy nations are expected to answer the call during a meeting of the Group of 20 (G20) major economies on Wednesday.
The IMF is not at this stage endorsing the kind of broader relief and debt cancellation African finance ministers are calling for.
“Debt sustainability is country‑specific and a medium‑ to long-term issue. Much will depend on how countries recover from this shock. My sense is they will do so at varied speeds,” Selassie said.
Africa’s creditor landscape has grown increasingly complex over the past two decades. Debt is held not only by Paris Club members and multilaterals, but also China, commercial banks and Eurobond holders.
“Quite a lot of thinking and work is needed to make sure that we understand and have modalities through which we can do debt relief operations,” he said.
“That’s really been kick-started with a vengeance as a result of the challenges countries are facing right now ... a new architecture is needed.”