Economic effects of the pandemic on the continent. Actions to be taken

The current COVID-19 pandemic in Africa

(CC Wikimédia Commons) - Portait of Louis Pasteur, Albert Edelfelt (1885)

Pollution between regions is directly related to advances in communications. Before the 20th century, the slowness of travel was a relative defence against the invasion of germs. Today, the terrifying speed at which man can be transported in a few hours from one point on the globe to another is a permanent threat. When you know a country is touched by an epidemic, don't go. But if that epidemic breaks out in the country you're in, don't leave. "Viruses cross borders without visas" (Jean Jacques Muyembe, the Congolese virologist who co-discovered Ebola)1 

Africa has a huge challenge ahead
1. Africa and its epidemics. The current COVID-19 pandemic in Africa

Microbes ignore borders and their transmission has been constant over the centuries, for different reasons and with cases, let us not forget, such as smallpox exported from Spain to the Aztecs, Incas, and Mayas; the triangular slave trade in the 17th century that introduced yellow fever into the New World from Africa; or syphilis brought from Europe, etc., and since the 1980s, air transport that in turn facilitated contagion to many destinations. Evolution and progress, therefore, are not at odds with the transoceanic travels of the virus, but, on the contrary, contribute to its spread. 
As far as the African continent is concerned, science tends to forget about African viruses, but transport and globalisation are causing these viruses to enter and leave the continent. "The best advice for Africa is to prepare for the worst and prepare for it today," said World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyes in reference on the entry of the coronavirus in that region of the world. That's right, this is an entry of the virus imported from different geographies. Let's remember that the six most important ones in Africa have been HIV-AIDS, lower respiratory diseases, diarrhoea, malaria, tuberculosis and meningitis. These six diseases are directly related to many of the problems that the African continent suffers, such as famine, poverty, lack of education (which also includes sex education), water shortage and contaminated or undrinkable water. 

Fuente: Africa faces specific challenges in tackling coronavirus. https://www.weforum.org/agenda/2020/03/why-sub-saharan-africa-needs-a-unique-response-to-covid-19/

Unlike Europe, where life can be lived indoors, African peoples live outside and use the house only to sleep at night. To ask an African to stay at home is to ask for a whole change in their way of life. The challenge is so great that usually people's houses (except those of the wealthy) are small and do not have space to stay for a long time. There is no refrigerator to store food, no bathrooms to shower and relieve yourself, no indoor kitchen, no wifi for entertainment, etc. Everything is done outside and often in a communal way2

Congo, Kinshasa. The unemployment rate is at least 41% in Kinshasa alone, and a large part of its inhabitants live from day to day. "Obimi te okolia te", the Kinois like to repeat: "If you don't go out, you don't eat"

"You can't fight a virus if you don't know where it is"", director general of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus

Africa will then need to have the necessary infrastructure for mass vaccination, and we already know how Africa spends it on infrastructure. Besides, who will provide the money, knowing that triple therapy is already a luxury treatment? Although the world is more connected than ever, we still do not have a global health system capable of responding to these threats. To stop the epidemic, we rely on the government of the country where it is occurring. If they fail there, the whole planet is in danger. Nowhere has this been more evident than in West Africa during the Ebola epidemic. When local health systems in Guinea, Liberia and Sierra Leone failed, the virus spread. The Ebola virus claimed 11,310 people in West Africa.

Today, the world faces a global health challenge caused by another virus in the same way. COVID-19, whose "natural" lethal effect can exceed 1% in some areas, could cause terrible damage on the African continent, given the fragility of its health infrastructure. 
In the case of Africa, where most countries have relatively weak health systems, the slow arrival of COVID-19 provides precious time to prepare. In collaboration with the World Health Organization and the African Centers for Disease Control (CDC), national governments have been mobilizing precautionary measures, including flight restrictions, improved detection at international airports, isolation and contact tracing, and training of health personnel in anticipation of a potential epidemic. However, 5,284 infections have been reported (the daily increase continues to be approximately 500 cases), of which 174 deaths have been reported as of 31 March.

In addition, Africa today continues to export its medical personnel. Today, there are only 15 doctors per 100,000 inhabitants, compared to 380 in France3, and there is only one doctor per 10,000 inhabitants in sub-Saharan Africa, compared to 37 in Europe. There are only 10 hospital beds per 10,000 inhabitants, compared to 52 in Europe, and, to continue with examples, just Germany has more resuscitation beds than the whole continent. African states spend about a quarter of what the rest of the world does on public health, according to the World Bank. Doctors in Africa still lack more masks than elsewhere.

África coronavirus

In addition, few Africans are able to telework as in the West or as in a significant part of Asia because of the lack of computers and Internet connection; only a quarter of the population in sub-Saharan Africa has access to the Internet and half in the Maghreb, compared to four-fifths in Europe. Telework is suitable for the service sector, but not for agriculture, industry, crafts, trades and repairs (small jobs) where most Africans are employed.

Africa is said to be too hot for COVID-19 and its young population will be able to cope with the pandemic without the mortality rates seen in countries with a higher proportion of elderly people, such as Italy. Neither argument really holds water. The number of cases in Florida suggests that COVID-19 can spread where the climate is hot; and being young in Africa is not the same as being healthy. Malnutrition and malaria are very resistant: the coronavirus kills from viral pneumonia and 400,000 African children die of pneumonia every year. Therefore, we should expect a higher incidence of severe forms of COVID-19 in younger patients in Africa due to demographics and associated endemic conditions affecting the immune system. Malnutrition, anaemia, malaria, HIV/AIDS and tuberculosis are likely to increase the severity of ICVID-19. Africa HAS A VERY DIFFERENT NARRATIVE. 

Although China appears to have little influence at this time on the entry of the coronavirus into the continent, it should not be forgotten that, due to the high volume of air traffic and trade between China and Africa, Africa is at high risk of the introduction and spread of COVID-19. What could happen in Africa - where most countries have an underdeveloped health sector, including insufficient control and laboratory infrastructure, scarce public health human resources and limited financial means - if a pandemic were to occur? Without treatment and vaccines, and without pre-existing immunity, the effect could be devastating because of the multiple health challenges already facing the continent, such as: rapid population growth and increased movement of people; existing endemic diseases such as human immunodeficiency virus, tuberculosis and malaria; emerging infectious pathogens such as Ebola virus disease, Lassa haemorrhagic fever4 and others; and the increased incidence of non-communicable diseases. 

For the time being, Africa's main vulnerability to the COVID-19 pandemic remains its European origin. This reality has called into question a global system based on infectious diseases originating in Africa and moving westwards. With the tables turned, Africa needs to play a more proactive role in learning from the successes and failures of Asian, European and American partners in shaping their own response to COVID-19 to protect African populations, minimise the import of cases and prevent a large-scale epidemic.

The priority is to use the small window of opportunity and prepare sub-Saharan Africa for an emergency. In addition, what happens in Africa is likely to have global implications. It does not make much sense for developed countries to solve their own problems only to discover that the virus is being re-imported from Africa, which is very likely to happen. So what is to be done? First of all, the more developed nations have to realize that the coming crisis in Africa will eventually be their crisis. Secondly, there must be a coordinated international response, not the current mix of commitments and funding initiatives, which lack real coherence.

Fuente: A woman wears a protective face mask, due to the global coronavirus disease outbreak in Dakar, Senegal https://qz.com/africa/1828110/coronavirus-africa-faces-recession-debt-problems-commodity-hit/Fuente: https://www.weforum.org/agenda/2020/03/why-sub-saharan-africa-needs-a-unique-response-to-covid-19/

Fuente: Ver mapa de números de casos de coronavirus en África información diaria en este link: https://infogram.com/nombre-de-cas-de-coronavirus-en-afrique-par-pays-1h7g6kv3v9j04oy

Source: See map of numbers of cases of coronavirus in Africa daily information at this link: https://infogram.com/nombre-de-cas-de-coronavirus-en-afrique-par-pays-1h7g6kv3v9j04oy

Source: OMS / AFP / Governments and health authorities of the countries concerned.

Source: The site medrxiv.org lists the African countries most exposed to the arrival of COVID-19.

The most exposed countries would be:

Egypt, Algeria and South Africa are the most prominent, because the first people infected have every chance of reaching Africa by air, they are the most risky. The good news is that these three countries, especially the last one, are among the strongest in terms of health system and probably the most capable of containing the epidemic. Nigeria, Ethiopia, Tanzania, Angola, and Kenya are also at risk because of their close ties to China, followed by Morocco, Sudan, and Ghana.

And the most resilient countries would be:

According to calculations by international experts, a wide range of criteria must be taken into account in this second scenario, including the state of the health system, economic development, the manner in which previous epidemics have spread, and a particularly crucial point in the case of the coronavirus, such as demographics and population density. According to these criteria, the countries best equipped to resist are South Africa, Egypt, Tunisia and Morocco; and the most fragile are Somalia, Chad, Central African Republic and Mauritania. The good news, again, is that the latter countries are not the most directly threatened by the arrival of patients in their territory.

For their part, the Americans from Johns Hopkins University, based in Baltimore, offer daily monitoring of the development of COVID-19, which has the merit of being updated very regularly. According to their calculations, Johannesburg airport is most likely the gateway to the virus on the continent. 

Fuente: Une autoroute déserte de Cape Town, en Afrique du Sud, le 27 mars 2020. © Nardus Engelbrecht/AP/SIPA
Here are some statistics...
Fuente: http://www.africacdc.org/covid-19-and-resourcesFuente: John Hopkins University of Medicine. Coronavirus resource center

This link: https://who.maps.arcgis.com/apps/opsdashboard/index.html#/0c9b3a8b68d0437a8cf28581e9c063a9 (COVID-19 IN THE WHO AFRICAN REGION Affected countries), provides daily information on the cases of coronavirus that occur in Africa (World Health Organisation)  

Africa

Fuente: https://africanarguments.org/2020/04/02/coronavirus-in-africa

Although Africa has improved in controlling and reacting to various diseases (its experience with these diseases was instrumental in treating other infectious diseases and may prove useful), it has not been able to achieve the same results. Approximately one in three deaths in Africa each year is due to an infectious or parasitic disease, compared to one in 50 in Europe. The recent outbreaks of Ebola, in West Africa in 2014-16 and in Eastern Congo in 2018-20, have taught policy makers vital lessons), yet many of these diseases as I said earlier are due to "an absence of adequate water treatment and lack of sanitation in urban centres, such as dysentery and other types of diarrhoea; other consequences of lack of nutrition such as rampant anaemia" (Education and Health/ Underdevelopment and Hope in Africa: Carlos Sebastian). 

Africa presents very scarce data on health, but very abundant in terms of the opinion of Africans themselves on the subject. Thus, 82% think that health is a serious problem. When asked about six areas other than the economy in which improvements could be made, the citizens of some nine countries surveyed ranked health as the top priority, not to mention poverty, unemployment, corruption and wars. The limitations they present go far beyond the obvious. "Some countries have more ministers than intensive care units, one in two Africans cannot access running water, or a very large part of the population lives in overcrowded ghettos where it is impossible to remain in guaranteed isolation. Perhaps one of the most deadly and shocking events in the history of Africa is already taking place. (Source: https://www.merca2.es/coronavirus-africa-ucis-sida-ebola/)

Governments may also have difficulty convincing their citizens to take the new virus seriously. False news is one reason. Dodgy cures and conspiracy theories are spreading in WhatsApp groups, which generally have more members in Africa than elsewhere. In the Congo, the virus is seen as a "mzungu" (white person) disease. Some Ethiopians see their country as blessed and therefore protected. More than a quarter of Nigerians say they are immune, most commonly because they are "children of God". (Source: The Economist. The state of the time in COVID-19)

Therefore, we should expect a higher incidence of severe forms of COVID-19 in younger patients in Africa due to demographics and associated endemic conditions affecting the immune system. Malnutrition, anaemia, malaria, HIV/AIDS and tuberculosis are likely to increase the severity of ICVID-19. Africa definitely has a very different narrative from the rest.

Fuente: Alors que s’étend la pandémie de Covid-19, une soignante prend la température d’un homme à titre préventif à Gatumba (Burundi), à la frontière avec la République démocratique du Congo, le 18 mars. ONESPHORE NIBIGIRA/AFP https://www.lemonde.fr/economie/article/2020/03/23/coronavirus-les-pays-emergents-guettes-par-l-effondrement  Fuente: https://www.iris-france.org/145723-a-la-croisee-des-pratiques-daide-et-de-gestion-de-crise-les-afriques-face-a-la-pandemie
Economic effects of the pandemic on the continent/measures to be taken

It is a question of ensuring that, after the victory over the virus, we do not come up against the desolate socio-economic landscape left by wars. Economic reconstruction must therefore be preventive rather than reactive, and all efforts must be made in that direction. "Governments, the private sector and development institutions must now duplicate and expand existing efforts to safeguard economies and livelihoods across Africa.

Most African countries are ill-equipped to respond to this pandemic. This is the meaning of the recent WHO warning that Africa must "prepare for the worst".

The health crisis will have a terrible economic impact. The blow to economies was already evident even before the first case of COVID-19 was reported in Africa. Over 80% of its exports go to the rest of the world, the highest proportion of any major region except Australasia. About half of these are commodities. As commodity prices have collapsed, so have growth prospects and tax revenues. In many countries on the continent, a decline in per capita GDP, unsustainable debt that will make budget execution impossible, a significant reduction in civil service salary payments and an impact on public services, especially education and health, can be expected.

"The deep economic crisis in many African countries, which has led to a sharp deterioration in living conditions and the collapse of national health systems, will increase migratory pressure towards Europe: not tens of thousands of migrants trying to reach Europe, but hundreds or even millions". (Jeune Afrique " Le virus et l'Afrique ")

The news in Africa, as elsewhere, changes daily in terms of statistics5 of the number of people infected by the virus6 , but it also gives rise to news of an economic nature that is quite relevant.

Some examples: 

- At an online press conference on March 27, Kristalina Georgieva, managing director of the International Monetary Fund (IMF), said that the world would be in recession by 2020, but did not rule out the idea of a recovery in 2021. "There can be a significant rebound, but only if we can contain [coronaviruses] everywhere and avoid liquidity problems arising from solvency difficulties," she said. "Our main concern is the very lasting damage from the sudden shutdown of the world economy, which could lead to a wave of bankruptcies and layoffs. This may not only undermine the recovery but also affect the foundations of our societies. The risks to these countries include capital flight (US$ 83 billion), the disappearance of tourism and a sharp drop in exports and commodity prices. The financing needs of emerging economies will be colossal.

- Ghana's Finance Minister Ken Ofori-Atta and the IMF's head of Africa, Abebe Selassie, warn of the economic impact on the continent: "It could sweep away 5-10% of the continent's GDP in one fell swoop, as the drop in commodity prices is compounded by the slowdown in trade, tourism and also the arrival of remittances. It is, they say, the most profound economic challenge facing the continent in decades, and the IMF chief not only recommends that debt payment could be suspended, but that even African countries should be able to abandon fiscal austerity and "expand their fiscal deficits to counteract the immediate impact of the coup. (Source: FT https://www.ft.com/content/07716a2b-2ba5-44aa-80ff-13d5eafb4bad)

- Africa is "two or three weeks away" from the peak of the virus storm and needs $100 billion to take preventive measures and strengthen its fragile health systems, citing an analysis by UNECA (United Nations Economic Commission for Africa), currently led by Vera Songwe7. Half of that money, they say, could be made available through debt relief for African countries by international multilateral institutions. 

"If we want to have a fighting chance, we need it immediately," he said. "In the next two or three weeks, if we act decisively, we can flatten the curve and then when the storm comes it won't be as brutal as we see in Europe."

https://www.uneca.org/sites/default/files/uploaded-documents/stories/eca_analysis_-_covid-19_macroeconomiceffects.pdf

Fuente: A member of the South African Police Service (SAPS) enforces social distancing of shoppers outside a supermarket in Yeoville, Johannesburg, on March 28. Photographer: Marco Longari/AFP via Getty Images

CASES: 

5,786 DECEASED: 196

PERSONS RECOVERED: 412

COUNTRIES AFFECTED: 49 (South Africa, with 1,353 is the country with the highest number of cases). Sierra Leone joined the list yesterday. Sierra Leone and Botswana join a list led by South Africa with 1,353 cases (one in four cases). On March 23rd, Cyril Ramaphosa, the president of that country, announced a national blockade. The number of cases registered in the country is the highest in Africa, with 709 as of March 25. The rate of increase is similar to that of Italy at the same stage. It is followed by the countries of the North, Egypt (609), Algeria (511), Morocco (479), Tunisia (312). Nigeria ordered the closure of Lagos, the largest city in sub-Saharan Africa, which is home to between 17 and 21 million people, to contain the cases of COVID-19.

Why would Africa become so vulnerable at this time?

There are several reasons, climatic, budgetary, economic, governance and institutional and some more likely security reasons. For Africa, the main medium-term lesson from the coronavirus crisis is that the continent will remain vulnerable to external crises until it finds a structural response to its development challenges. One thing is clear: the perpetuation of the continent's basic integration into international trade, namely, merely exporting raw materials to the rest of the world and passively waiting for the volatile financial resources to fuel income economies, is indeed deadly.

Fuente: UNECA marzo 2020
Joint statement by the World Bank and the IMF 

On 25 March, the World Bank and the IMF issued a joint statement to the G20 on the need for debt relief for the poorest countries. The Bank and the IMF called on bilateral creditors to suspend debt payments to those poor countries that request it with immediate effect. They argued that this would help low-income countries meet immediate liquidity needs to deal with the outbreak of the coronavirus.

Before the coronavirus struck, sub-Saharan Africa (SSA) was the epicentre of global poverty. Of the 46 countries in the region, 23 are classified by the World Bank as low-income, with a per capita gross national income of US$1,025 or less. World Bank poverty data indicate that the percentage of the population living below the international poverty line of $1.90 per day ranges from 38 per cent in Chad to 77 per cent in Madagascar. 

SSA's COVID-19 cases are rapidly increasing, and it is the region least equipped to save lives while maintaining the economy and employment. As governments in the region try to stop the spread, they face at least four major challenges: 

First, health systems, already rudimentary, cannot cope with the sudden increase in the number of patients.

Second, since the region's workforce is largely composed of workers who depend on daily wages, a total blockade is tantamount to starvation. 

Thirdly, these countries do not have the money to supplement the income of their citizens if public and private sector employees do not show up for work. Nor can SSA governments save the private sector from total collapse if companies have to cease operations for months. 

Fourth, the closure of international borders would mean that SSA could neither export the raw materials on which it depends nor attract tourists who constitute substantial capital inflows. This is also true for foreign direct investment. In other words, the economies of African countries could soon come to a standstill.

Fuente: Many labour markets in Africa remain dominated by poorly paid informal employment. REUTERS/Thomas Mukoya https://www.theafricareport.com/25289/coronavirus-africa-must-act-on-world-bank-imf-debt-relief-proposa
Request from the United Nations Organization/United Nations Conference on Trade and Development (UNCTAD)

The coronavirus pandemic is affecting developing countries where two-thirds of humanity lives. That is why the United Nations, in a report published by UNCTAD on 30 March,8 is asking for $2.5 trillion in aid, which would include the cancellation or deferment of Africa's $236 billion debt. 

The coming crisis promises to be more severe than that of the 2028-2009 crisis. "In the next two or three weeks, if we act decisively, we can flatten the curve and then when the storm comes it won't be as brutal as we see in Europe". 

These countries are also suffering from falling prices of commodities such as cotton (-20%), copper (-20%), not to mention oil (-59%). Their currencies are falling, -5% for Kenya, -15% for Nigeria and -20% for South Africa. Tourism revenues have also plummeted. 

Fuente: UNICEF/Vincent Tremeau. Les pays en développement comme le Burkina Faso pourraient avoir besoin d'un soutien supplémentaire de la communauté internationale à la suite de la pandémie de COVID-19.
The price of raw materials (oil) and some examples

The drop in prices caused by the disagreements and the Saudi obsession that is going to be charged to all the OPECs in Africa could have more effect because of the arrival of the coronavirus, which is already having an impact on Africa.  Nigeria has lost half of its oil revenues since January. The continent's largest producer is on the verge of its second recession in four years. The federal cabinet met urgently to review the country's budget, which was set at a reasonable $USD 57 per barrel at the time, and still close to $USD 70 at the beginning of the year. But, now, they are below $USD35. 

Angola, Africa's second largest producer and highly dependent on imports from China, has already had to resell its oil at a very low price. Ghana was budgeting almost $9 billion in revenues and will also have to make adjustments, but austerity is likely to be delayed until early 2021, after the elections. 

In March 2020, oil prices fell by about 50 per cent. For net oil-exporting countries, this will lead to greater liquidity problems, loss of tax revenues and monetary pressure. (However, we should keep in mind that lower oil prices will potentially have a positive economic impact on oil-importing countries and consumers.)

Budgets and debt

A more structural reason is that national budgets limit the capacity to respond to the crisis. Overall, the debt-to-GDP ratio for sub-Saharan economies increased from 30 per cent in 2012 to 95 per cent by the end of 2019. This is further hampered by the increasing share of commercial debt in total debt. More than half of the African countries are above the IMF recommended limit for public debt. The World Bank says that 29 out of 47 African countries need to tax more than they spend just to keep their debt constant as part of the economy. But their tax revenues are about to fall and the cost of borrowing is rising as investors flee to safety.

Since 2009, African governments have issued more than $130 billion in Eurobonds, of which more than $70 billion was between 2017 and 2019. These are expensive loans: the debt service ratio has risen from 17.4% of exports in 2013 to 32.4% in 2019.

Today, 18 low-income African countries are in debt crisis or at high risk of debt crisis. Because Africa is particularly vulnerable, the economic consequences of the COVID-19 are likely to be even more devastating than elsewhere.

For European countries, turning their backs on Africa would be a step backwards in cooperation between the two continents. The continent's leaders, the various private creditors, regional banks, Bretton Woods institutions, the Paris Club, etc. should be brought together with the same objective and commitment.

The sub-Saharan population is expected to grow by one billion people by 2050. The international community cannot allow the coronavirus, national selfishness and trade wars between the powerful to derail the continent's growth. The risk would then be that poverty and its consequences in terms of malnutrition, health and social instability would cause more disasters than the virus itself. 

"A global crisis requires a global response. But when it comes to Africa, Europe must play a special role. For Europeans, turning their backs on Africa would be a humanitarian tragedy and would mark a considerable step backwards in cooperation between the two continents, particularly on migration issues and the fight against terrorism" (Source: Jeune Afrique-Le virus et l'Afrique)

African governments, their partners in the private sector and development institutions are already responding decisively to the COVID-19 crisis. But I believe that most African countries need to scale up these efforts considerably, increase the urgency of action and identify bold solutions in both the health and economic fields. Given the potentially devastating impact of the pandemic on health and livelihoods, no less.

Both African Governments and development agencies could explore a number of far-reaching solutions, such as creating an African recovery plan. This would involve a comprehensive stimulus package or an economic development plan based on the Marshall Plan that provided aid to Europe after World War II.

Bibliography (Information consulted in the following sources)

International Monetary Fund, World Bank, African Development Bank, UNICEF / UNCTAD United Nations Conference on Trade and Development, UNECA United Nations Economic Commission for Africa, John Hopkins University of Medicine, Coronavirus resource center, World Health Organization (WHO), Center for Global Development (CGD), OECD Organization for Economic Cooperation and Development, African Union (AU), McKinsey Company, Financial Times, The Economist, Jeune Afrique, Le Monde.

Footnotes

1- The name Ebola refers to a small river near the town where the outbreak occurred.

2- Africa versus Coronavirus, by Gaetan Kabasha.

3-Center for Global Development (CGD), 2008.

4-Lassa fever is a 1-4 week long acute viral haemorrhagic disease that occurs in West Africa. The Lassa virus is transmitted to humans through contact with food or household utensils contaminated with rodent urine or feces.

5-The statistics are a very difficult issue at this time.

6- Example as of March 31, 2020. As I write this document, the figures will be increasing.

7- Vera Songwe (Nairobi, 1968) is an economist and banking executive from Cameroon. In August 2017 Songwe was appointed Executive Secretary of the United Nations Economic Commission for Africa, becoming the first woman in history to take up the post. She has worked at the World Bank and in 2015 was appointed regional director for West and Central Africa of the IFC/World Bank.

8- See document at: https://news.un.org/fr/story/2020/03/1065422

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