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Friday, September 30, 2022

Africa in 2021: A year in Preview (2)

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Moving beyond current models of innovation, entrepreneurship, and digital growth on the continent is imperative. The 4IR has benefits for several sectors including agriculture, healthcare, education and financial services.

The primary challenge for the continent is addressing the infrastructural gaps that will stymie the 4IR and adequately equip its predominantly youthful population with the knowledge and skills to thrive in the emerging new world of work. African governments need to reboot their system and get to work so they do not miss out on this unique opportunity to radically transform their economies. The private sector must also be a part of this agenda as they will attract investment, provide technical expertise and foster transparency and accountability.

  1. Gender equality

Consider the story of Nefisat, a young girl attending secondary school in a rural village in the Northern region of Nigeria. The pandemic arrives, forcing schools across the country to shut down and students like Nefisat to stay at home. Unlike her peers in private schools in urban areas who have access to e-learning materials, Nefisat does not own a laptop, mobile phone and has no access to the internet. She spends most of her days at home caring for her extended family and taking on additional domestic work. A few weeks later, her father loses his job at the community center where he works as a security guard and is forced to start farming to ensure that his household of ten has food on the table. After several months of hardship, a suitor comes knocking and he decides to marry Nefisat and her sister off to ease the financial burden. In the blink of an eye, Nefisat becomes a child bride and her aspirations of going to medical school shattered. For every girl like Nefisat, there are many more across the region who have been stripped of their education and economic opportunity as a result of the pandemic.

While most people’s lives and work have been negatively affected by COVID-19, women will feel the adverse impact on both their lives and livelihoods. The magnitude of the inequality is profound and could potentially reverse the milestones achieved over the years towards improving gender equality and human development in Africa.

Women makeup 65% of the health workforce in Africa and are putting their lives at risk in the front lines; making them more vulnerable to infections and death. Furthermore, as a result of the increasing pressure on health systems, access to essential services such as contraception, abortion, maternal health, menstrual hygiene products and services have declined.

Women in the continent already bear the brunt of unpaid and low-paid care work. However, the burden of household tasks will increase with more people staying at home due to school closures and lockdown measures. Women will also suffer from widespread job cuts, as around 70 – 80% of African women mostly work in the volatile informal sector.

At the peak of the lockdown last year, more than 120 million school girls were at home. During that period
numerous reports of child abuse, exploitation, domestic violence and child marriage were reported. Anecdotal evidence identifies a surge in calls to domestic violence hotlines across several countries. Many women and girls were stuck at home with their abusers and had limited access to protection services and social support. For example, South Africa which is infamous for its high rate of sexual abuse and assault on women reported 87,000 cases of gender-based violence in its first week of lockdown.

In terms of education, girls are more likely to drop out of school to look for jobs or get married and support their families due to the increased economic hardship triggered by the pandemic. Thinking back to Liberia’s encounter during the 2014 Ebola outbreak, when schools reopened girls’ enrolment failed to return to pre-crisis levels, 8 out of 100 girls were out of school before the epidemic and this number skyrocketed to 21 in 2017. History might repeat itself across several countries if the appropriate policies are not enacted to ensure that girls return to the classroom.

Africa still has a long way to go in achieving gender parity. For the most part, cultural practices, religion and societal norms still shape the future of many young girls today. The pandemic highlights the stark inequality that exists between men and women, especially in the precarious labour market. Governments must consider gender dynamics, roles and responsibilities when drafting responses to tackle the pandemic. Likewise, women must be at the forefront of policymaking to guarantee that their needs and interests are adequately represented in any post-pandemic recovery plan.

Challenges

  1. Debt management 

Debt has been rising on the continent and the pandemic will aggravate the situation. Over the past few years, many African countries have increased borrowing and capital expenditure to fund ambitious infrastructure projects particularly in the power and transport industries in a bid to address severe infrastructural deficits and serve the needs of its rapidly growing population.

The unexpected costs of procuring vaccines and expanding welfare programs incurred by governments due to the pandemic have widened fiscal deficits which is translating into increasing debt and debt distress. As such, debt management and forgiveness will be at the top of the agenda for several countries this year.

Between 2010 and 2018, the average public debt increased from 40 to 59% of GDP, thus, making sub-Saharan Africa the fastest-growing debt accumulation continent in comparison to other developing regions. Equally, oil-exporting and heavily indebted poor countries (HIPCs) such as Cameroon, Angola, Gabon, Equatorial Guinea and Chad were at the frontline of the impending debt crisis.

Last year Zambia became the first African country to default on its debt since the pandemic started with its debt to GDP ratio at 120%. Based on IMF recommendations, African countries are expected to keep their debts below 55% of GDP. The World Bank projects that average sub-Saharan African debt will hit a peak of 67.4% of GDP in 2021.

The looming debt overhang could potentially stifle investment and economic growth for years. This has prompted international lenders across the world to intervene and adopt steps that will lower unsustainable debt stocks for the poorest countries. Last April, the World Bank’s development committee and G20 finance ministers endorsed the Debt Service Suspension Initiative (DSSI) which includes 40 African least developed countries (LDCs). Private creditors are also participating in the initiative on comparable terms.

Since its inception on May 1, 2020, the initiative has provided about $5 billion in relief to more than 40 eligible countries. The suspension period initially set to end on December 31, 2020, has been extended to June 2021. In January, Chad became the first country in Africa to request for relief under the DSSI as it faces a liquidity crisis prompted by a high debt burden and shrinking revenue base. Two days later, Ethiopia sent an application. Zambia joined the list shortly after.

Although these channels for debt relief and debt suspension are necessary to ease the burden in the region’s fiscal space, there are strings attached. African governments face a conundrum because if their private debt is restructured, they risk being downgraded by rating agencies like Moody’s or Fitch, which will make it painfully difficult for them to borrow in the future and deter future investments.

The rising debt level on the continent is a source of concern for borrowers, lenders and the wider international community. African Finance Ministers have their work cut out for them over the next few years. Strategies and initiatives to manage debt growth and reshape the public debt profile will be pivotal in ensuring that the scars from the pandemic are not permanent. Even so, debt must be used in productive expenditure and revenue-generating activities that raise productivity, create jobs and increase economic output.

  1. 2Political instability

From the Horn to the Sahel, political instability is one of the many factors that has contributed to economic stagnation and lacklustre development in Africa. Historically, corruption, ethnic tension, marginalization and resource struggle have been the key drivers of conflict in the region.

The contractionary effects of the COVID-19 pandemic including lower economic activity, unemployment, growing poverty and lack of welfare programs on the continent might trigger demands for social intervention by citizens. We also expect a continuity of popular protests and trending hashtags in countries such as Nigeria, Côte d’Ivoire and Uganda, as seen in 2020.

In 2021, at least 18 African countries are expected to go to the polls. This is occurring amidst a second wave of the pandemic, a new strain of the virus and ongoing political conflict in places like Chad, Ethiopia, Libya, Niger and Somalia. In adherence to social distancing protocols, campaigning strategies will have to adopt a different approach, moving from the streets to social media. While this is necessary to curtail the spread of the virus and foster widespread participation, there are also implications for press freedom and individual liberties which have been historically abused by aging leaders on the continent. A flashback to what happened to Bobi Wine in Uganda last month does not offer much hope.

The political and governance challenges in Africa are dismaying, but not insurmountable and tackling them is pivotal to ensuring a seamless post-pandemic recovery. African citizens and leaders must be vigilant to ensure that the pandemic does not become an excuse to indefinitely postpone elections for political advantage and enforce authoritarian and anti-democratic measures under the guise of public health.

  1. Achieving the Sustainable Development Goals

The SDGs, also known as the Global Goals, are 17 time-bound targets across key sectors such as healthcare, education, employment, energy, infrastructure, and the environment. These interlinked goals serve as a blueprint for poverty reduction, improved welfare and inclusive economic growth.

African governments have made significant efforts to endorse the SDGs and infuse them into national strategies and development plans, nonetheless, there is still so much to be done. The task of achieving the SDGs will be even more daunting with an ongoing global pandemic that has deep-reaching humanitarian and economic impacts. According to the 2020 SDG Index and Dashboards Report, North Africa is the best-performing region on average, while Central Africa is the worst-performing.

The pandemic will have both short and long-term impacts across the SDGs.

The short-term impact is on human welfare (SDG 3), decent work and economic growth (SDG 8), food security (SDG 2), and poverty (SDG 1). There has also been an impact on (SDG 4) and (SDG 5). But it is not all bad news. The environment has been doing better as a result of the decline in economic and industrial activities across the world. Climate action (SDG 13) has benefited from a drop in global carbon emissions and (SDG 11) from decreased air pollution.

While COVID-19 will hinder the capacity of African nations to successfully deliver sustainable development, the SDGs can also serve as a framework for protecting lives and livelihoods both in the short and long term. It presents an opportunity to design better-coordinated responses between different stakeholders and achieve the agenda of “leaving no one behind” by 2030. To achieve the SDGs in Africa, leaders must abandon the “one size fits all” approach and tailor solutions to fit current realities. This could be through strengthening implementation capacity across all levels, promoting national ownership and domestication of the goals, improving statistical capacity, installing monitoring mechanisms and ensuring adequate resource mobilization.

  1. Health 

The COVID-19 pandemic shifted the attention of the public health sector away from other diseases raging the continent. The disruption in healthcare services alongside the diversion of resources to combat the pandemic has left many people with chronic illnesses helpless.

Recent Ebola outbreaks in countries like Guinea constitute a challenge for the continent and could be catastrophic if not managed properly. Also, tropical diseases like malaria have not taken a break and are still killing thousands. This is likely to intensify in 2021 as both financial and human resources are prioritized for managing the pandemic.

During the 2014 Ebola crisis in West Africa, diseases such as malaria, tuberculosis and HIV/AIDS led to a surge in more deaths than Ebola because the epidemic disrupted local health care systems. We are already witnessing a similar trend with the COVID-19 pandemic. According to the WHO, in 2020, measles campaigns were suspended in 27 countries and polio campaigns were paused in 38 countries, exposing at least 80 million children under the age of one to measles and polio. Additionally, a 25% disruption in access to effective antimalarial treatment in sub-Saharan Africa could lead to 46,000 additional deaths, a WHO report suggests.

We cannot choose between saving lives from COVID-19 versus saving lives from other diseases. The continent must do both. Health officials and institutions urgently need to contain the pandemic while also ensuring that their focus on COVID-19 does not lead to an increase in co-morbidity, such as malaria, HIV/AIDS and tuberculosis-related deaths.

Opportunities

  1. The African Continental Free Trade Agreement (AfCFTA)

After several years of planning, deliberation and negotiation, trading under the AfCFTA commenced on the 1st of January 2021.

Intra-African trade is one of the lowest worldwide (15%). This figure is particularly perplexing, especially when compared to Europe (70%), North America (55%) and Asia (45%). Furthermore, Intra-African trade costs are 50% higher than in East Asia (the highest intra-regional cost in developing regions). Thus, the emergence of this agreement is vital to foster trade relations in the continent.

In conclusion, Africa should not waste a good crisis. 

 

The path to a robust and resilient recovery would not be easy but is absolutely necessary to move forward and secure an inclusive and prosperous future for all. Growth in the region is not expected to return to 2019 levels until 2022. For some of its largest economies including Nigeria, South Africa and Angola, real GDP will not return to pre-crisis levels until 2023 or 2024.

Despite the bleak outlook, COVID-19 also presents opportunities for the continent to build back better. The goal of African governments should be to finetune strategies and strike a balance between the various policy objectives they intend to achieve. This entails prioritizing the economy, healthcare, education, political stability, governance, and so on. Furthermore, structural and governance reforms must occur to strengthen resilience, adapt and mitigate the impact of climate change, improve the ease of doing business, improve the rule of law, strengthen governance and enhance development outcomes at community and national levels.

With fewer resources at their disposal, African policymakers will face some difficult choices in the year ahead. A tighter fiscal space driven by rising debt levels, shrinking revenues and significant financing gaps implies that Africa may struggle to adequately address the needs of its people. But it is not an impossible task, with the right tools, people and policy, the continent’s economic health will recuperate in no time.

ABOUT THE AUTHOR

Chisom Stephannie Adinde is a development economist, writer and researcher currently working as a strategy consultant with a global consulting firm.
She is also member of the Pan-African Scientific Research Council  (PASRC) and a Development Research Fellow at Dataville Research LLC.
Stephannie is passionate about bridging the data gap in Africa, informing and influencing data-driven policymaking and improving development outcomes on the continent.
Stephannie has a first-class degree in Economics and Politics from De Montfort University, Leicester and a Masters in Emerging Economies & International Development from King’s College London.
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