414 views | Dr Emmanuel Matambo | July 10, 2020
The African Development Bank (AfDB) has released a revision of its January 2020 African Economic Outlook. The subtitle of the initial 2020 Outlook, “Africa’s economy forecast to grow despite external shocks”, was characteristic of a buoyant continent that had achieved 2.4 per cent economic growth in 2019. In fact, at the beginning of 2019, projections were that Sub-Saharan Africa’s economic growth would peak at 3.4 per cent, rising to 3.7 per cent in 2020. A granular analysis showed figures that are more impressive because the 3.4 per cent prediction was mainly due to sluggish growth in the continent’s economic heavyweights – Angola, Nigeria and South Africa. East Africa grew at 5 per cent, followed by North Africa at 4.1 per cent and West Africa made a marginal improvement from 3.4 per cent in 2018 to 3.7 percent in 2019. Central Africa also registered an improvement from 2.7 in 2018 to 3.2 percent in 2019. Southern Africa was a blemish on these achievements; it was the only region with contracting growth from a paltry 1.2 per cent in 2018 to 0.7 in 2019. This was mainly due to natural disasters (Idai and Kenneth), but also a consequence of South Africa’s listless growth and the precipitous depreciation of the local currency in Zambia.
According to the World Bank, the onslaught engineered by COVID-19 will slow growth “to between -2.1 and -5.1% in 2020, sparking the region’s first recession in 25 years.” The AfDB forecasts that the worst-case scenario will see Africa’s growth for 2020 contract to -3.4 per cent, and condemning 49 million Africans to extreme poverty. Another chilling revelation by the AfDB is that out of 54 African countries, only 21 “are clinically prepared to deal with epidemics.” This comes on the back of the unsettling prediction that, “absent significant efforts to create economic opportunities and reduce risk for poor people, extreme poverty will become almost exclusively an African phenomenon by 2030.”
Even though the AfDB predicts that Africa’s economy might rebound to 3 per cent in 2021, the continent’s historical failure to harness its resources and use successful economic spells to lift the majority of Africans out of poverty means that the African Union will have even a more trying responsibility. The African Continental Free Trade Agreement (AfCFTA), the biggest of its kind in the world, was instituted as an indicator of Africa’s intention to unite the continent in the joint pursuit of development. The political implications of the AfCFTA should be that when faced with challenges such as COVID-19, the African Union takes a leading role that individual countries should assent to.
COVID-19 will likely go against the grain of what the AfCFTA seeks to foster i.e. easy movement across African borders of goods, services and persons. This will be an understandable measure because the African Union has shrunk from being assertive in countries such as Burundi and Tanzania where a business-as-usual approach and some risible references to divine protection have been the state-sponsored response to the spread of the coronavirus pandemic. As a continental body, the AU has to be more assertive in its dealings with inexcusable behaviour in errant members. The transformation of the OAU into that AU is still a cosmetic change to a body that seems to have a congenital inability to be candid about condemning misbehaviour in member states. The lack of playing a leadership role has led to embarrassing episodes such as happened in Libya in 2011, when Africa, in general, looked like a bystander to dealing with its internal affairs.
Human resources needed to rebuild Africa’s economy are abundantly available. However, these resources need to be healthy in order to set the continent on a path to recovery. For that, African countries will have to take a serious and concerted effort in mounting a response to the virus – whose second wave is near-certain. For this to happen, the AU should hold assertive discussions with governments that have chosen unconventional and needlessly risky approaches to the coronavirus pandemic. Current circumstances are dire, but an assertive African Union could ameliorate their impact.
Emmanuel Matambo is a Senior Researcher at the University of Johannesburg’s Centre for Africa-China Studies