Tuesday, May 19, 2020 / 12:20 PM / By FBNQuestResearch / Header Image Credit: Twitter; @royafrisoc

Thisweek, we are going to share some of the observations made on a webinarorganized by the Royal African Society on 'African Economies after COVID-19'.The external panelists were: Donald Kaberuka, an envoy for the African Union(AU) and the previous president of the African Development Bank; NanjanaNyabola, a political analyst and author; Arkebe Oqubay, a minister in theEthiopian prime minister's office; and Stephen Karingi, a specialist onregional integration and trade in the UN Economic Commission for Africa(UNECA). We leave it to readers to place Nigeria in the context of the manycomments from panelists. 

Kaberuka'sstarting point was that Africa is less prepared and more vulnerable in thispandemic than it was in the global financial crisis of 2007-08. While Africafaces its first recession for 25 years, certain governments had shownresilience through their smart use of social capital. Kaberuka highlighted Coted'Ivoire, Ethiopia, Kenya, Rwanda and Senegal in this group.

Africahas very limited fiscal space to counter the pandemic, which is a far cry fromJapan's package of measures that together make up about 20 per cent of its GDP.The AU has therefore identified a financing gap of US$150bn, of which US$57bnhas been already disbursed or committed. Its preference would be the creationof new SDRs by the IMF on a selective basis.  (The US Treasury secretaryhas indicated his administration's opposition to the idea.)

Nyabolanoted the very modest public health systems. Kenya is best equipped in EastAfrica but has just 518 beds in intensive care units (ICU) for a population of49 million so no government could handle an outbreak of the intensity of, say,Italy's. She argued that the use of force in implementing lockdowns wascounter-productive because it alienated people, citing the use of the militaryin enforcing quarantines and curfews in Kenya and South Africa. She concludedthat Africa has demonstrated a high degree of solidarity and cooperation in thecrisis, which she contrasted with the export bans and gazumping on orders ofessential equipment seen elsewhere.

Oqubayoutlined the Ethiopian government's approach to the virus, which has attractedmuch favourable international commentary. It started work in January because itsensed that its many borders and its role as the Chinese gateway to Africa madeEthiopia vulnerable. To date, it has reported just 300 cases. He attributed therelative success to a rapid building of the public health capacity at a local,community level, and to a comprehensive programme of 'track and trace'.

Additionally,the authorities have made extensive use of simple text messages to educate thepublic. In as much as there was any fiscal space, the government concentratedits backing on dynamic exporting and manufacturing businesses. (We would addthat Ethiopia has many supporters for the delivery of its developmental policy,which we should see in the strong centralization of power that some havecharacterized as a command economy.) 

Finally,Karingi made the point that African farmers must not miss this planting seasonbecause of the pandemic if they wanted to avoid critical shortages next season.Food price inflation has already been fuelled by the higher cost of importedrice and wheat. He highlighted the opportunity to fast-track the AfricanContinental Free Trade Area. Under the sequencing of the existing protocols,e-commerce is at the back of the queue but its positive contribution to theresponse to the virus internationally suggested that it should come nearer thetop of the list.

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