The ongoing COVID-19 pandemic, and the policy measures to combat it, are having profound effects on the economic and social lives of citizens. They are threatening employment as well as the long-term livelihoods and well-being of millions around the world.
South Africa has not been exempted from the socio-economic effects of the pandemic. Its economy has been in decline since it entered a stringent lockdown as the main public health response to curb the spread of the virus in March 2020. This is reflected in its latest available statistics for both gross domestic product (GDP) and employment.
The country’s economy wasn’t in great shape even before the lockdown. It was hit hard by the global financial crisis in 2008, recording average growth just above 2% between 2008 and 2012. And now the National Treasury has forecast that the economy will contract by 7.8% in 2020 due to COVID-19 measures.
The unemployment rate in South Africa has been persistently high over time, hovering above 20% over the last decade. The official unemployment rate reached an all-time high of 30.8% during the third quarter of 2020.
Understanding the effects of the global pandemic on employment – at aggregated and sectoral levels – is therefore key for governments, policymakers, workers and employers. This should help minimise the long-term effects of the pandemic while ensuring the safety of individuals and the sustainability of businesses and jobs.
This article focuses on providing results from applied economic analysis on the sectoral winners and losers during the pandemic. We also identify the people who have been affected the most and evaluate the South African government’s policy response to minimise its effects.
So far the government’s response to address the impact of the pandemic has consisted of two main interventions: a stimulus package launched in April 2020 and in October 2020 a more long-term recovery plan. Our article focuses on the short-term stimulus package.
Given that data on sectoral GDP, aggregate GDP and poverty lag the employment figures, results from economic modelling such as the one we set out here can help provide some useful information in the meantime.
This article presents the results of our COVID-19 policy response simulations. The models trace a variety of channels through which the pandemic affected the economy.
The simulation exercise showed that the sectors and workers that were most affected by the COVID-19 pandemic were the mining/mineral sectors, the construction sector, the transport sector and most of the services sectors such as retail trade and accommodation.
But the spillover effects meant that in the end all sectors were affected. Reduced economic activities led to reduced labour and capital demand. This, in turn, led to reduced income to all agents in the economy. Households were not spared. In particular, households dependent on unskilled labour income suffered the most because these workers were the most constrained after the lockdown.
Mining and minerals were affected by the lockdown as well as the drop in the mineral prices on the world market. Based on the model results, we estimated that 864,000 were affected in a mild scenario of the COVID-19 crisis. In a severe expression of the crisis we estimate 1.3 million jobs being affected. This is in line with the results from the Quarterly Employment Statistics by Statistics South Africa. This showed losses in full-time employment of over 568,000 (-6,2%) year-on-year between June 2019 and June 2020 (at the peak of the COVID-19 lockdown) and losses of over 525,000 (-5.7%) in full-time employment year-on-year between September 2019 and September 2020.
Overall, the effects of the simulated COVID-19 pandemic were quite harsh on both the production and demand sides of the economy. The decline in GDP growth (-10%) has been largely due to the marked slowdown in economic activity coupled with widespread disruptions in both international and domestic supply chains.
Lower GDP growth and increasing unemployment invariably translate to rising unemployment and poverty rates. When extending the analysis to poverty, the modelling results show some modest increase in poverty, increasing by 2.5 percentage points.
In addition, females, particularly the poorest female-headed households, were more negatively affected. This is because they derive a larger share of their income from a lower-skilled type of work.
As the country attempts to gain control over the pandemic, our findings point to the importance of interventions in at least three areas: protecting vulnerable populations, supporting vulnerable sectors and external trade diversification.
It is important to note that, given the paucity of information on the ongoing pandemic, results of this and any modelling exercises will be shrouded by uncertainty. Hence the directions and intensity of changes must be emphasised.
Implications for policy
The most interesting aspect of our findings from a policy intervention point of view is that the decline in employment and poverty is not uniform across skill levels and gender. As is often the case during economic crises, there are winners and losers, and in this case, it is the least skilled workers and poor females who suffer the most.
This suggest that when putting together a building back strategy government should promote investments in the services sectors, help these different sectors to set up protective barriers to allow the different activities to restart and importantly recover some of the lost jobs.
A support package to increase consumers’ purchasing power, and reducing the operating costs of these businesses and industries, would also be effective interventions.
As the country intervenes to cushion the poor, measures to resuscitate economic growth must be put in place at the same time. Policy options could include increasing public investments, accelerating the implementation of existing policies and diversifying the export and import basket. This could include increasing high value added commodities in total exports and increasing the share of primary products in total imports.
Jessika Bohlmann, PhD (Economics), University of Pretoria; Helene Maisonnave, Professor of Economics, Université Le Havre Normandie; Margaret Chitiga-Mabugu, Director and Head, School of Public Management and Administration, University of Pretoria; Martin Henseler, Researcher, EDEHN - Equipe d'Economie Le Havre Normandie, Université Le Havre Normandie, and Ramos Emmanuel Mabugu, Professor, Sol Plaatje University
Reports from Britain and South Africa of new coronavirus strains that seem to spread more easily are causing alarm, but virus experts say it’s unclear if that’s the case or whether they pose any concern for vaccines or cause more severe disease.
Viruses naturally evolve as they move through the population, some more than others. It’s one reason we need a fresh flu shot each year.
New variants, or strains, of the virus that causes COVID-19 have been seen almost since it was first detected in China nearly a year ago.
On Saturday, Prime Minister Boris Johnson announced new restrictions because of the new strain, and several European Union countries banned or limited some flights from the U.K. to try to limit any spread.
Here’s what is known about the situation.
WHAT’S CONCERNING ABOUT THE RECENT STRAIN FOUND IN ENGLAND?
Health experts in the U.K. and U.S. said the strain seems to infect more easily than others, but there is no evidence yet it is more deadly.
Patrick Vallance, the British government’s chief scientific adviser, said that the strain “moves fast and is becoming the dominant variant,” causing over 60% of infections in London by December.
The strain is also concerning because it has so many mutations — nearly two dozen — and some are on the spiky protein that the virus uses to attach to and infect cells. That spike is what current vaccines target.
“I’m worried about this, for sure,” but it’s too soon to know how important it ultimately will prove to be, said Dr. Ravi Gupta, who studies viruses at the University of Cambridge in England. He and other researchers posted a report of it on a website scientists use to quickly share developments, but the paper has not been formally reviewed or published in a journal.
HOW DO THESE NEW STRAINS OCCUR?
Viruses often acquire small changes of a letter or two in their genetic alphabet just through normal evolution. A slightly modified strain can become the most common one in a country or region just because that’s the strain that first took hold there or because “super spreader” events helped it become entrenched.
A bigger worry is when a virus mutates by changing the proteins on its surface to help it escape from drugs or the immune system.
“Emerging evidence” suggests that may be starting to happen with the new coronavirus, Trevor Bedford, a biologist and genetics expert at the Fred Hutchinson Cancer Research Center in Seattle, wrote on Twitter. “We’ve now seen the emergence and spread of several variants” that suggest this, and some show resistance to antibody treatments, he noted.
WHAT OTHER STRAINS HAVE EMERGED?
In April, researchers in Sweden found a virus with two genetic changes that seemed to make it roughly two times more infectious, Gupta said. About 6,000 cases worldwide have been reported, mostly in Denmark and England, he said.
Several variations of that strain now have turned up. Some were reported in people who got them from mink farms in Denmark. A new South African strain has the two changes seen before, plus some others.
The one in the U.K. has the two changes and more, including eight to the spike protein, Gupta said. It’s called a “variant under investigation” because its significance is not yet known.
The strain was identified in southeastern England in September and has been circulating in the area ever since, a World Health Organization official told the BBC on Sunday.
WILL PEOPLE WHO HAD COVID-19 FROM AN OLD STRAIN BE ABLE TO GET THE NEW ONE? WILL IT UNDERMINE VACCINES?
Probably not, former U.S. Food and Drug Commissioner Scott Gottlieb said Sunday on CBS’s “Face the Nation.”
“Unlikely,” Gupta agreed.
President-elect Joe Biden’s surgeon general nominee, Vivek Murthy, said Sunday on NBC’s “Meet the Press” that there’s “no reason to believe that the vaccines that have been developed will not be effective against this virus as well.”
Vaccines produce wide-ranging responses by the immune system beyond just those to the spike protein, several experts noted.
The possibility that new strains will be resistant to existing vaccines are low, but not “inexistent,” Dr. Moncef Slaoui, the chief science adviser for the U.S. government’s vaccine distribution effort, said Sunday on CNN’s “State of the Union.”
“Up to now, I don’t think there has been a single variant that would be resistant,” he said. “This particular variant in the U.K., I think, is very unlikely to have escaped the vaccine immunity.”
“I’m not concerned” because a lot of changes in the genetic code would probably be needed to undermine a vaccine, not just one or two mutations, Bedford wrote on Twitter. But vaccines may need fine-tuned over time as changes accumulate, and changes should be more closely monitored, he wrote.
Murthy said the new strain doesn’t change the public health advice to wear masks, wash hands and maintain social distance.
Credit: Associated Press
The 52-year-old prime minister died in a South African hospital four weeks after testing positive for COVID-19.
The prime minister of Eswatini, Africa’s last absolute monarchy, died in a South African hospital on Sunday, the government said in a statement.
Ambrose Dlamini, 52, tested positive for COVID-19 four weeks ago.
“Their Majesties have commanded that I inform the nation of the sad and untimely passing away of His Excellency the Prime Minister Ambrose Mandvulo Dlamini,” Deputy Prime Minister Themba Masuku said in a statement.
The prime minister “passed on this afternoon while under medical care in a hospital in South Africa,” he added, without detailing the cause of Dlamini’s death.
Dlamini had announced in mid-November that he had tested positive for the coronavirus but said that he felt well and was asymptomatic.
He was moved to South Africa on December 1, to “guide and fast-track his recovery,” from COVID-19. At that time, the government said Dlamini was stable and responding well to treatment.
Dlamini was appointed prime minister in November 2018, following his position as the chief executive officer of telecoms company MTN Eswatini. He had worked in the banking industry for more than 18 years, including as the managing director of Eswatini Nedbank Limited.
Formerly known as Swaziland, the kingdom of Eswatini has reported over 6,700 coronavirus cases and 127 deaths among its population of 1.2 million people.
A South Africa-based civil society group, the Swaziland Solidarity Network (SSN), had accused the government of giving the prime minister special treatment by moving him to a country with better healthcare.
More than 39 percent of the tiny landlocked country’s population lived below the poverty line in 2016 and 2017, according to the World Bank.
Over the years, the vacation rental industry became a huge business, with millions of tourists choosing fully furnished homes or apartments instead of a traditional hotel or motel experience.
However, the COVID-19 outbreak caused an enormous financial hit to the entire market, cutting down revenues of both the big players like Airbnb or Booking.com and smaller vacation rental owners and property managers.
According to data presented by Stock Apps, the revenue of the global vacation rental industry is expected to plunge by $35bn in 2020, a 42% drop year-over-year.
Airbnb, Booking.com, and Expedia Witnessed a 90% Plunge in Reservations
The vacation rental segment includes private holiday homes and houses and short-term rental of private rooms or flats through online marketplaces like Airbnb and Booking.com or in travel agencies.
In 2017, the entire industry generated $78.7bn in revenue, revealed the Statista data. In the next two years, this figure rose by 7% to almost $84bn.
However, vacation rental companies had a rough start to 2020. After a promising first few weeks of 2020, the initial wave of the COVID-19 caused massive cancellations of stays, with even the market’s biggest players witnessing colossal reservation drops.
In week 14 of 2020, short-term rental bookings on the Expedia platform saw a 94% drop year-over-year. Two other travel industry giants, Airbnb and Booking.com, followed with a 93% and 91% plunge, respectively. The strong negative trend continued between June and September after the coronavirus pandemic ruined what is typically a peak summer travel period.
As of week 35, there was a 62% YoY drop in short-term rental bookings on the Airbnb platform. However, Booking.com and Expedia witnessed even more significant losses, with their reservations plunging by 66% and 86% in this period.
Statista data show the global vacation rental industry is expected to witness a recovery in 2021, with revenues growing by 36.7% to $66.9bn, still $17bn under 2019 levels. In the next three years, this figure is forecast to rise to $88.4bn.
The average revenue per user in the vacation rental segment is forecast to amount to $111.1 in 2020, a slight increase in a year. By 2025, this figure is expected to rise to $117.
The Number of Users to Plunge by 42% to 445 Million
Although the initial wave of the COVID-19 caused massive reservations drops in the first months of 2020, statistics show the number of users is expected to stay deep below the last year’s levels.
In 2017, almost 750 million people chose vacation rentals instead of hotels and motels. Over the next two years, this figure rose to 777 million.
However, Statista estimates the number of users in the vacation rental segment to plunge by 42% YoY to 445 million in 2020 and remain under 2019 levels in the next three years.
In global comparison, the United States represents the world’s largest vacation rental market, expected to generate $9.5bn in revenue in 2020, a 45% plunge in a year.
To fight the spread of COVID-19, some US states placed restrictions on short-term rentals, which caused massive complaints from the companies operating in the market. In Florida, property owners and a vacation rental management company even filed a federal lawsuit against the governor, accusing him of violating their constitutional rights.
The Chinese market, the second-largest globally, is forecast to witness a 43.5% drop YoY, with revenues falling to under $5.3bn. Japan, the United Kingdom, and Germany follow, with $3.2bn, $2.6bn, and $2.5bn in revenue in 2020, respectively.
It has been nine months since the World Health Organisation (WHO) declared the outbreak of COVID-19, caused by the SARS-CoV-2 virus, a “public health emergency of international concern”.
A safe, effective COVID-19 vaccine is expected to be developed in record time and may be approved for production, distribution and acceptance some time in 2021. Public health experts say that at least 70% of any community must get vaccinated with a COVID-19 vaccine to achieve an acceptable level of immunity to protect its members.
We recently surveyed 13,426 people in 19 countries. We included two of Africa’s most populous and visible nations, Nigeria and South Africa, which are among the most affected by COVID-19 on the continent.
Overall, we found that 71.5% of participants said they would take a “proven safe and effective vaccine” while 14% would refuse it outright. An additional 14% said they would hesitate to take the vaccine.
But that average figure is deceptive. It was raised by favourable responses from two Asian countries that also recorded very high trust in government health recommendations. More than 80% of Chinese respondents and 75% of South Koreans said they would accept a vaccine. South Africans came closer than any other country to the 70% standard, at almost 65%. But only 46.3% of Nigerians said they would do so. This is slightly higher than the results we found in Spain, Sweden, Poland, Brazil and Ecuador.
These vaccine hesitant people are not necessarily vaccine opponents. A large number of them consistently vaccinate their children against numerous childhood diseases. However, it must be noted that the increasingly well-coordinated global anti-vaccine movement has repurposed itself to challenge the very reality of COVID-19 as well as the usefulness of a new vaccine to prevent it. They have leveraged social media platforms to promote these doubts.
We also tried to determine how much trust people would have in a COVID-19 vaccine if their employer recommended it. Just more than three in five (61.4%) of all our respondents said they would do so. The numbers dropped to less than half of South Africans (46%) and Nigerians (44%).
Our data confirms a troubling trend towards vaccine hesitancy that has been found in other global and national studies. Professor Heidi Larson, a co-author of our paper, and her team at the Vaccine Confidence Project at the London School of Hygiene and Tropical Medicine recently reported on trends in vaccine confidence observed across 149 countries between 2015 and 2019. They found that political instability and religious extremism were critical factors in declining vaccine confidence in many of these countries.
Recent political unrest in Nigeria, Africa’s most populous country with over 200 million people, does not bode well for a successful COVID-19 vaccination campaign there. Only South Africa and Ethiopia have recorded more COVID-19 cases on the continent.
Many public health workers also recall a massive boycott against polio vaccination in northern Nigeria. It was caused by a single rumour, and not an adverse event. This boycott led to the years of more polio infections and deaths in Nigeria, and delayed polio eradication from the continent as a whole.
So what must be done to get on track for a successful African vaccination programme against COVID-19?
As scientists, we should help health leaders to prepare now with education and dialogue to set appropriate expectations for when a coronavirus vaccine may be available. We need to build vaccine literacy with effective communication and community engagement for acceptance country by country, village by village, taking into account community-specific issues, concerns or misconceptions and working with local religious and civil leaders and influencers.
We also need to help people become more fluent about vaccinations: Are they safe? Will they protect me and my family? Do I need to be vaccinated to be able to work? Will everyone be able to get it? Will vaccination sterilise me or my kids?
And we must be realistic that none of this information and advocacy will truly convince people to accept COVID-19 vaccination, or any other, in the absence of genuine societal trust. Without mutual trust, we may not be able to rebuild economies and return to anything approaching “normal” life.
It would be tragic if we developed, made and distributed safe and effective COVID-19 vaccines and people refused to take them, when health infrastructure and equipment levels cannot stem the pandemic.
Two authors of this study, Drs. Ratzan and Larson, are co-leaders of a recently launched global coalition – CONVINCE [COVID-19 New Vaccine Information Communication and Engagement]. This initiative is spearheaded by the CUNY Graduate School of Public Health, the Vaccine Confidence Project of the London School of Hygiene and Tropical Medicine, and Wilton Park, a part of the UK’s Foreign, Commonwealth and Development Office. A number of African public health leaders have already joined it.
Scott C. Ratzan, Distinguished Lecturer, , CUNY Graduate Center; Agnes Binagwaho, Vice Chancellor, University of Global Health Equity; Heidi Larson, Senior Lecturer in Epidemiology & Population Health, London School of Hygiene & Tropical Medicine; Jeffrey V Lazarus, Associate Research Professor, Instituto de Salud Global de Barcelona (ISGlobal); Kenneth Rabin, Senior Scholar, CUNY Graduate Center, and Lawrence O. Gostin, University Professor; Founding Linda D. & Timothy J. O’Neill Professor of Global Health Law, Georgetown University
Trade routes have been significantly disrupted this year in efforts to contain COVID-19. The effects of this are already showing: global growth is set to contract by 4.9% and growth in sub-Saharan Africa will contract by 3.2%.
This will get worse if continued restrictions further impede trade. The World Trade Organisation has warned that at worst, global trade could collapse by a third this year, and at best, it will contract by 13%, similar to the recorded drop after the 2009 financial crisis.
This has fundamental consequences – both direct and indirect – for many. For instance, within the first few weeks in March when some trade routes were initially suspended, flower exports from Kenya to the European Union fell by 50%, affecting around a million people.
Trade enables formal firms to flourish, which will be essential for economic recovery. It also protects the urban poor operating in the informal economy against poverty and hunger. The continuation of trade is even more essential for their survival as they operate without an adequate safety net.
Restricting trade also affects supply and prices. Import disruptions have resulted in shortages, including food, and prices have spiked. This has brought economic hardship to small traders and consumers across the continent.
In the current economic climate, trade is not a luxury that can be temporarily avoided. In Africa, there’s a growing body of evidence showing that firms – from large to very small – have been severely affected by restrictions in the movement of goods and people. For many this means not only losing a livelihood, but a direct impact on their ability to meet basic needs.
Economic impact on formal firms
A study of formal firms in Uganda found that exports fell by 57% at the start of its lockdown, compared to a year earlier. It also found that imports, which these firms rely on to produce, fell by 43%.
The researchers of the study simulated what would happen with continued import reductions of this magnitude. The results were devastating: 6.6% of all formal firms in the Ugandan economy would likely have to close, resulting in a reduction of formal employment by 4.7%.
Fortunately, the Ugandan government ensured trade could continue throughout lockdown. Exports and imports started to rebound relatively quickly.
The impact of slower trade has also been tracked in Ethiopia, where a survey of firms showed that trade disruptions affected a fifth of small, medium, and large firms due to a lower supply of raw materials and intermediate goods, as well as the restricted movement of workers.
The importance of the role played by formal firms can’t be overstated. Evidence suggests that in sub-Saharan Africa the labour productivity of formal firms is four times higher than that of informal firms. This is because formal firms are able to scale and specialise in a way that informal operations cannot. In addition, across the continent, taxes on incomes, profits and capital gains accounted for around 25% of all national tax revenues.
But smaller informal firms will have an equally crucial role to play in the recovery.
Urban informal sector
In developing cities, most firms operate in the informal sector, accounting for more than 66% of employment across the continent.
A 2016 census of informal firms in the Greater Kampala area showed that informal firms were very small: about 60% have only one employee and 70% have an annual turnover of UGX 10 million (US$2,700) or less. Over 90% of micro firms were operating close to, or at, the poverty line.
The challenge for the poorest of these firms operating in cities is that the majority of their income is used to buy food in urban markets. Therefore, trade is not only a question of economic activity, but more importantly of survival. It is also why the urban poor are the hardest hit by lockdown measures.
Evidence from a small-scale trader survey in Lagos showed that during the lockdown, most firms were making zero revenue. And these effects seem to be persistent: in Sierra Leone, for example, where the economy has reopened, profits for these firms are still nearly 50% lower than pre-lockdown levels.
In Uganda, which has by some estimates already eroded nearly 10 years of gains in poverty reduction efforts, the sharpest spike in poverty levels to date was in the capital city, Kampala. It is also why there have been increases in hunger and malnutrition across the country.
Uganda is not alone: simulations of an eight-week lockdown across Africa show that eight million people, including 3.9 million children under five years, would be severely food deprived.
Trade is not a luxury
Rethinking global guidelines on handling pandemics is not an easy task given that the contexts to which they will be applied are extremely diverse. Perhaps the most efficient guidelines will be those that allow for targeted, data-driven, flexible and localised approaches.
Understandably, however, during this pandemic and for future ones, much of the world also looks for global standards set by bodies like the World Health Orgnisation. But when setting these standards it is important to remember that for many, health versus the economy is a false dichotomy. Rather, for many in poor urban areas, trade is not only a means of making ends meet, but of avoiding the trap of poverty and hunger. Nikita Sharma, the Managing Editor for the IGC, also contributed to this article
Netflix Inc on Tuesday posted its weakest subscriber gains in four years as streaming competition increased, pandemic restrictions eased and live sports returned to television.
The company added 2.2 million paid subscribers globally during the quarter that ended Sept. 30, missing Wall Street's target of 3.4 million and its own forecast.
Earnings per share also landed below analyst expectations at $1.74. The consensus forecast was $2.14, according to IBES data from Refinitiv.
Shares of Netflix, one of the biggest gainers this year as people stayed home amid the pandemic, dropped nearly 6% to $494 in after-hours trading on Tuesday.
"Domestic subscribers were nearly flat, which highlights Netflix's saturation in the U.S.," said Ross Benes, analyst with eMarketer. With domestic additions slowing, revenue growth will likely come from price increases, he said.
The company reported a blockbuster quarter at the start of the worldwide coronavirus pandemic, adding 15.8 million paying customers from January through March.
Netflix had warned investors that a sudden surge in new sign-ups would fade in the latter half of the year as COVID-19 restrictions eased. Netflix forecast in the fourth quarter it would bring in 6 million new subscribers around the globe, short of the 6.51 million that analysts expected.
The streaming video pioneer is trying to win new customers and fend off competition as viewers embrace online entertainment. During the third quarter, Netflix released "Emily in Paris", "Enola Holmes" and "The Devil All the Time."
Netflix acknowledged that competition was increasing as studios across Hollywood from Walt Disney Co to AT&T Inc's WarnerMedia have restructured to compete more directly for video subscribers.
"Competition for consumers' time and engagement remains vibrant," Netflix said in a letter to shareholders.
In recent months, major sports resumed play and nascent streaming services, including AT&T's HBO Max and Comcast Corp's Peacock, offered audiences new options.
Netflix said its results reflected the fact that it saw such a big surge in customers early in the year.
"We continue to view quarter-to-quarter fluctuations in paid net adds as not that meaningful in the context of the long run adoption of internet entertainment, which we believe is still early and should provide us with many years of strong future growth as we continue to improve our service," the company said.
Netflix officials noted the company had pulled in more subscribers in the first nine months of 2020 than in all of 2019. It ended the third quarter with 195.2 million global streaming customers.
"Next time we get together, we should be over 200 million members, completing a year of 34 million (additions)," an annual record, Co-Chief Executive Reed Hastings said in an analyst interview.
The company also said it expected to complete shooting over 150 productions by the end of the year and that it would release more original programming in each quarter of 2021 compared with 2020.
Revenue rose 22.7% to $6.44 billion in the third quarter, edging past estimates of $6.38 billion.
Net income rose to $790 million, or $1.74 per share, in the quarter from $665.2 million, or $1.47 per share, a year earlier.
The COVID-19 pandemic has revealed the extent of Africa’s reliance on imports.
As global supply chains and the flows of manufactured goods around the world have been disrupted by lockdown restrictions, African countries have faced the prospect of mass unemployment and curtailed economic growth in a way which more self-reliant developed countries have not, as noted by the African Union in its research paper titled Impact of the Coronavirus on the African Economy.
As leaders globally consider the trade-off of permitting sectors of their economies to operate while still minimising the risk of transmission of the virus, the imperative of long-term, sustainable economic development in Africa through coordinated initiatives has never been clearer. Investment in industrialisation is a key lever to moving the economic growth needle over the long term, as demonstrated by the last few decades of economic growth trends globally.
Those countries that have industrialised and exported manufactured goods have become the most resilient and diversified economies. In the wake of global supply chain disruption, Africa faces a golden opportunity for governments to provide incentives for industrialisation and the development of local value chains. Industrialisation cannot happen in a vacuum: governments need to work hand in hand with development finance partners who can provide the funding that manufacturers and suppliers require to scale up production and manufacture appropriate goods to meet market demands.
Joel Jackson, CEO of Mobius Motors, based in Nairobi, Kenya, says during COVID-19-induced lockdown Mobius has continued to focus on testing and development of a new vehicle model which will be uniquely tailored to the African environment, but once restrictions are lifted and economic activity can resume in full, will scale up production and distribution of its vehicles to the wider African market.
“With a vehicle designed for African operating conditions and sold at an unparalleled price point, Mobius is driving down the cost of vehicle ownership; playing an important role in catalysing economic development in Africa, on two fronts. First, the pandemic and subsequent lockdown have shown how profoundly important mobility is to a fully functioning economy and healthcare system. Second, vulnerabilities of global supply chains to pandemics have highlighted the importance of localisation and self-reliance to build resilience in national and regional manufacturing ecosystems” he says.
Jackson says African economic recovery will require doubling down on industry potential and working with development funders who recognise the benefits of greater self-reliance in Africa’s future growth story.
“This kind of event fundamentally undermines global supply chains and import-dependent markets, making it even more crucial for African countries to build their long-term resilience through a stronger and more localised supplier landscape in the manufacturing sector. Governments need to expand incentives to companies and business models that have the potential for a disproportionate impact on job creation and up-skilling.”
Mobius is currently in discussions with the Kenyan government about incentives for local industrialisation and skills development. “The more we invest in industrialisation, the more we enable a self-fuelling flywheel of economic growth and consumer market development,” Jackson says.
He cites a recent research paper by McKinsey, Reopening and Reimagining Africa: How the COVID-19 crisis can catalyze change, which states that Africa cannot rely on business as usual to come back from the brink. In recovering from the crisis, Africa has the potential to create a reshaped and more resilient manufacturing sector, “provided that governments and businesses tackle long-standing barriers to industrialisation and cooperate to seize new opportunities”.
“We estimate that, for every dollar of manufactured product, Africa imports approximately 40 cents in inputs from outside the continent—higher than most other regions in the world. Over five years, a serious push to reduce reliance on global supply chains could add an initial $10-20 billion to the continent’s manufacturing output if 5 to 10 percent of imported intermediate goods can be produced within the region. In addition to supply-chain resilience, the shift could also benefit exporters in countries experiencing devaluation, if they could capture the upside of increased export attractiveness with less burden of more expensive imported inputs,” the report says.
No African car brand has been able to establish a presence in local markets at scale, and Jackson says a coordinated effort with governments and funders can overcome structural challenges to scale up local production and content. Mobius was founded in 2011 and has focused on manufacturing a multi-use transport platform that can “plug in” a range of different modules to enable a myriad of transport applications – something imported vehicle models are unable to do in meeting African challenges.
“There is a clear and significant gap in the market: durable and affordable vehicles, offering the versatility consumers want. We have donated two of our first-generation Mobius II vehicles to the Kenyan government for the COVID-19 community relief effort, and the advantages of a locally tailored vehicle platform are demonstrable. The next step is to progressively scale our next-generation Mobius 2 vehicle across the continent and drive positive and sustainable socio-economic change,” Jackson says.
When it comes to public transport, there is a responsibility both on operators and on commuters to make the required changes to their travel and commuting behaviour. This is the only way in which we can hope to keep coronavirus infection rates under control.
The comment comes from a manufacturer and distributor of cleaning products INDUSTROCLEAN, following an announcement made by President Ramaphosa on Sunday night on the regulations and limitations for long and short distance taxi journeys.
Emma Corder, Managing Director of INDUSTROCLEAN, says the reality is that public transport is a high-risk environment because of the number of people in a confined space with limited ventilation. There is also little if any access control to identify potentially sick commuters as well as a variety of common surfaces to touch such as handrails and doorknobs.
“All parties involved in public transport – taxi operators, bus companies, train operators and commuters – have to take the necessary precautions,” she says.
It starts with the wearing of a mask, explains Corder.
“This is a critical way to protect yourself and others, and it is equally important to wear it correctly. Masks block droplets from your sneezes and coughs and minimizes the likelihood of you touching your face and either spreading or coming into contact with the virus from other people.”
Eating requires removing the mask in a high-risk situation, so change habits and eat and drink before or after the ride. It will benefit others just as much as it helps you stay safe and virus free, she adds.
Secondly, it’s important that commuters sanitize their hands before and after each trip. Most transport operators provide hand sanitizers but having your own on hand is always advised.
“Carrying your own hand sanitizer will not only keep you safe but also provide peace of mind during your commute,” commented Corder. It is important that the sanitizers contain 70% alcohol.
Other tips include:
“We all have to remain vigilant as the number of coronavirus infections continue to rise. By following these simple daily guidelines we can all work together to keep the infection number as low as possible,” says Corder.
First, we tried the antimalarial drug hydroxychloroquine. Then we tested the antiviral drug remdesivir. But new UK research gives the strongest indication yet we may have found a useful treatment for COVID-19.
This time it’s an old anti-inflammatory drug, dexamethasone, which has been described as cheap, old and boring.
Preliminary results from a clinical trial just released indicate the drug seems to reduce your chance of dying from COVID-19 if you’re in hospital and need oxygen or a machine to help you breathe.
The results were significant enough for the UK to recommend its use for severe COVID-19.
Before we roll it out in Australia, we need to balance the drug’s risks with its benefits after peer-review of the full trial data.
What is dexamethasone?
Dexamethasone has been used since the late 1950s, so doctors are familiar with it. It’s also inexpensive, with a packet of 30 tablets costing around A$22 (for general patients) under Australia’s Pharmaceutical Benefits Scheme.
So if it does work for COVID-19, this cheap and boring drug, already available in Australia with a prescription, would be easy to add to current treatments.
Dexamethasone belongs to a class of drugs known as corticosteroids and is used to treat a range of conditions related to inflammation. These include severe allergies, some types of nausea and vomiting, arthritis, swelling of the brain and spinal cord, severe asthma, and for breathing difficulties in newborn babies.
And it’s dexamethasone’s application to those latter two respiratory conditions that prompted doctors to think it may also help patients severely affected by COVID-19.
What did the trial find?
The recently reported results come from the Randomised Evaluation of COVID-19 Therapy, or RECOVERY, trial.
The researchers put patients into one of three groups: those needing ventilation (a machine that helps them breath); those who just needed oxygen therapy; and those who needed no treatment to help them breathe.
Patients in each of those groups were given dexamethasone (6mg once a day, either as a tablet or via intravenous injection), for ten days. A fourth group (a control group) was not given the drug.
Dexamethasone was most useful for the ventilated patients; deaths for this group dropped by about one-third with drug treatment. In contrast, deaths only dropped by one-fifth for those patients who were only receiving oxygen therapy. There was no benefit to patients who could breathe normally.
The researchers calculated that giving dexamethasone to eight ventilated patients would prevent one from dying, on average. And giving it to around 25 patients needing oxygen alone would
How might dexamethasone work for COVID-19?
When a patient has severe COVID-19, their immune system ramps up to catch and control the virus in the lungs.
In doing this, their body produces more infection-fighting white blood cells. This results in inflammation and pressure on their lungs, making it very difficult for them to breath.
It’s therefore likely dexamethasone reduces this inflammation, and so reduces pressure on the lungs.
What are the downsides?
There are potential complications with using dexamethasone.
First, dexamethasone also suppresses the immune system when it reduces inflammation. So, it’s not usually recommended for people who are sick, or could be sick, from other infections. So doctors will need to make sure patients have no other infections before they are prescribed the drug.
If the results of this trial are correct though, the drug doesn’t appear to compromise the patient’s ability to fight COVID-19; it might just affect their ability to fight off other diseases.
Second, the drug is only useful for patients with difficulty breathing and needing some assistance either through ventilation in a hospital or from oxygen therapy.
There appears to be no benefit for patients who don’t need help breathing. So we shouldn’t be giving it to everyone who tests positive to the virus.
Third, like all drugs, dexamethasone has side effects that need to be monitored. Serious, but rare ones include: severe stomach or intestinal pain, sudden changes with vision, fits, significant psychiatric or personality changes, severe dizziness, fainting, weakness and chest pain or irregular heartbeat, and swelling of the face, lips, mouth, tongue or throat, which may cause difficulty in swallowing or breathing.
What happens next?
The results of the clinical trial are preliminary. So we need to wait for the full study data and scientific peer-review before we can make a definitive decision as to whether dexamethasone treatment is a worthwhile, and safe, addition to COVID-19 therapy in Australia.