OPINION | Resilient Africa will continue to rise above Covid-19 crisis
Africa Day is an annual opportunity to reflect on the progress we have made in driving socioeconomic growth and development in the continent. But in 2020, it is a more sombre occasion as we try to understand the human and economic cost of the Covid-19 pandemic.
At the time of writing, there were about 95,000 confirmed Covid-19 cases in Africa and nearly 3,000 deaths, with the numbers rising exponentially.
Apart from the tragic loss of life, Covid-19 would be a serious economic setback. The IMF forecasts that Sub-Saharan Africa I am confident Africa will remain resilient in this crisis, just as it was during the global financial crisis’s GDP for 2020 will shrink 1.6% — a 5.2% drop from earlier forecasts — and that per capita income will drop an average 3.9%.
However, let’s not allow the very real challenges of the virus overshadow the progress Africa has made.
Our continent has been one of the fastest-growing regions in the world for the past 20 years. We have taken significant steps forward in reducing poverty, improving health and growing the economy.
I am confident Africa will remain resilient in this crisis, just as it was during the global financial crisis.
Thriving after the pandemic will test our leaders and our resolve. A survey from the African Management Institute found that 87% of small businesses in Africa fear they may not survive the Covid-19 crisis.
Each of these small businesses represents a livelihood for at least one family, and a contribution to economic output and tax receipts.
More than that, small businesses are the heartbeat of every community, providing much-needed jobs, services and opportunities.
As governments, NPOs, big business and multilateral institutions plan for economic recovery, they should bear in mind that small businesses will continue to power the post-Covid-19 revival.
This will require extraordinary levels of co-operation between everyone in the ecosystem — we ideally need to see a range of fiscal measures, policy changes, and training and development interventions to help small businesses through this rocky patch.
Many African leaders have responded with speed, compassion and agility to the need to support people and businesses with fiscal stimulus, but more action is needed.
The overwhelmingly good news is that Africa was already moving in a positive direction before the virus hit.
For example, the African Continental Free Trade Area agreement promises to help drive higher levels of intracontinental trade. Rather than letting Covid-19 slow down implementation of this agreement, let’s continue to pick up the pace and create a more open trading environment for all African states.
I am confident Africa will remain resilient in this crisis, just as it was during the global financial crisis
It will also be good for governments to speed up their efforts to make it easier to do business.
This is key not only in the response to the virus, but also in diversifying economies beyond agriculture and mining to innovative sectors like media, IT and fintech. This can help African countries become more competitive, create jobs and grow the tax base.
Businesses around the continent have moved fast to use the cloud to enable people to work from home and to serve their customers.
No longer can we simply talk about digital; we must get on with it and rethink how we do things — how we let people work from home to save rental costs and improve quality of life, how we offer more convenient customer service, and how we run more agile businesses.
Covid-19 may temporarily slow Africa’s growth, but the continent’s momentum is unstoppable. I can’t wait to see what’s next.
Pieter Bensch is the executive vice-president, Africa & Middle East, at Sage
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