Africa: is it still the next frontier?

By Nisan Abdulkader

In the Eastern Province of Kenya, Josephine Wambua, a young factory worker, was used to her daily commute to Kitui County Textile Centre (KICOTEC), where she specialised in sewing gardening clothes and uniforms, a job she had done for more than 2 years. Fast forward to April 2020, Wambua was one of 400 staff of KICOTEC who rapidly learned to sew masks as part of a national cause to step up production of protective equipment and supply public and private hospitals across the country. This example is one of the countless initiatives which have been realized on the African continent as a result of global supply chain disruptions and mass production shutdowns.

The spread of Covid-19 across each of the 54 countries in Africa still pales in comparisons to some countries across the northern hemisphere, yet the estimated socio-economic impact of the pandemic on the continent is staggering. In June this year, The Economic Commission for Africa (ECA) warned that Africa may lose half of its GDP with growth falling to  3-4% due to a number of reasons including the continent’s interconnectedness to affected economies and nearly two-thirds of African economies being net importers of basic goods.

The effects have already been felt in key sectors of Tourism, Infrastructure, Energy and Mining, Food and Consumer goods; resulting in a decline in FDI flows, domestic financial market tightening, increased capital flight, and a slow-down in investment which has resulted in mounting job losses.

As the continent grapples with the unfolding health and economic crisis, the soft underbellies of the African states are now being revealed. Each country has further discovered its fragility, displayed in the dependence on the rest of the world to satisfy the maintenance of their way of living, and at the same time, the isolation in attempting to respond to a major exogenous shock.

The silver lining amidst this pandemic is that the continent presents a myriad of opportunities. With over 50% of the African population under the age of 25 and 60% of the land still arable – Africa remains ripe for positive disruption.

For the continent to continue to be the ‘next frontier’ in a new normal, the rebuilding process must be intentional, strategic and supported by a clear and progressive platform. It is time for African states to reassess their role in the international system and redesign their development models taking into account the following areas:

Remapping ties & economic relationships

African leaders will certainly revisit their economic ties and relationships demanding an equitable seat at the table on global issues in multilateral forums and fair ties with existing partners. China will continue to be a key trade and security partner given Sino-African trade exceeds $200 billion annually and the same is to be seen with ties with Europe and the United States. In doing so, African nations will have to reconsider how much they want to rely on individual partners and accede to their requests.

Meanwhile, renewed economic relationships may be in order as African states look to deepen trade & investment ties with other East Asian countries, for example Japan, South Korea and Singapore. This comes as a result of admiration for the Covid-19 response and bilateral support offered during the crisis.

Regional Integration

African nations will most certainly renew their commitment to regional integration and multilateralism. While the Covid-19 outbreak has certainly hampered the progress of implementation of the the Africa Continental Free Trade Area (AfCFTA), it is hoped that the rebound from the crisis will instil an urgency to remove trade barriers and increase intra-regional trade. Many private sector entities have stressed that the execution of the AfCtfa is critical to accelerate continental manufacturing and strengthen the productive capacity of the African private sector to transform raw materials locally.

In the words of Cyril Ramaphosa, South African President and Chair of the African Union “ the challenge of this pandemic has shown how Africa is able to work together to solve its own problems.”

Accelerated Economic Diversification

Every crisis can be used to catalyse improvements and major benefits to African economies. The nature of this pandemic calls for the rapid adoption and digitization strategies to reduce an over reliance on foreign imports and commodity revenues. This means that the public and private sector will need to upgrade their ‘operational systems’ to be fit enough to respond to fast-evolving challenges such as gaps in food and health security or risk remaining behind. If adopted, the positive impact of increased connectivity and innovation can significantly increase the efficacy of the public sector.

Sustained Inclusive Development

The post-Covid-19 African era will undoubtedly require an inclusive response to the economic impact of the crisis which has exacerbated existing vulnerabilities, especially the fragility of the informal sector which represents 72% of total employment in sub-saharan Africa. Similar to the manner in which governments across the continent mobilised domestic resources to expedite regulatory reforms for the private sector’s shifting business models– nations should be ready to engage in structural changes which increase the capacity of the state on an institutional and administrative level to alleviate the socioeconomic impacts and further restore and sustain livelihoods of the bottom billion. 

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