The covid19 changed our world in a matter of months. The world as we knew it is over, a new normal is upon us. A brave new world is shaping up opening audacious possibilities that never existed before. If you think about it in many ways we have been presented with a clean slate. We can choose our path, a freedom of choice that can make us or break us. The current decade would be decade of change.
What future do we want?
The question is – do we want to go back to where we were, do we recover, or do we reconstruct? What kind of economy we want?
Covid-19 sends a powerful message to all leaders around the world: they need to adjust to a new normal.
An economy is a tool designed by a government led by a leader; it facilitates a country to reach the goals it sets. No government nor policy will ever be perfect; hence an economy must keep on designing and redesigning till it arrives at its goal, achieving collective happiness, and prosperity for its citizens and if ever it’s possible equality for all.
The African Development Bank estimates that the pandemic has cost Sub-Saharan Africa between US$35 – $100 billion due to an output decline and a steep fall in commodity prices, especially the crash in oil prices. The World Economic Forum estimates that global losses for the continent will be in the order of $275 billion.
Africa imports almost 100% of its pharmaceuticals, with India and China accounting for 70% of the imports. The pandemic has brutally exposed the fragility and weakness of Africa’s industrial capabilities and health and pharmaceutical sector, the two are complementary.
Governments have an important role to play in the nature and direction of industrialization. Progressive governments throughout history understand that the faster the rate of growth in manufacturing, the faster the GDP growth.
China transformed itself, and the world economy by being a manufacturing powerhouse, and selling abroad. So did Vietnam and Bangladesh. Bangladesh, a country far poorer than many African countries, can manufacture 97% of its pharmaceuticals, even though it’s just next door to India which together with China are the largest producers of API (active pharmaceutical ingredients).
Manufacturing and industrialisation
The keywords are manufacturing and industrialisation.
The challenges facing the health services sector in Africa is numerous and severe. These include shortages of health care professionals, weak leadership, training and development, governance, infrastructure, resources and policy barriers.
This crisis has severely tested Africa’s political, economic and social resilience. African leaders must rethink prior assumptions and ask themselves where they see their countries in 2030 and 2050 (when the population will be at 2.5 billion). Africa must adopt progressive industrial policies that puts social and environmental consciousness firmly at the core of its decision-making to create an inclusive, prosperous and sustainable societies. Africa must think ahead.
It’s high time the old ideas and ways are thrown out, new forward-thinking innovative ideas and policies are designed and executed.
What will the brave new world post covid-19 look like in Africa? Personally, I believe opportunities are emerging, it’s time to rise to the challenges. It’s time to turn adversity into opportunities.
Africa cannot allow itself to be marginalize anymore. The valuable resource in Africa isn’t oil, diamonds, cocoa etc, it’s African’s. Africa has 35 out of its 54 countries in the highly export-commodity-dependent category (referring to countries with 80% or higher dependency). This is an opportunity for Africans to rise, industrialize and add value to the continent’s vast raw materials.
In 2001, African leaders pledged to invest around 15% of their budgets in health but fast forward today only five countries have fulfilled this promise. There’s no doubt today that the health sector in Africa will be strengthened by covid-19.
Many African countries have already been deprived access to essential medical supplies during this pandemic — surgical masks, PPE and so forth. Excessive global demand has relegated Africa to the back of the queue. This is an early warning and lesson for Africa.
According to a 2019 McKinsey study, China and India supply 70 percent of Sub-Saharan Africa’s demand for medicine, worth $14 billion. China’s and India’s markets are worth $120 billion and $33 billion respectively. Just consider this – what if both India and China are unable or unwilling to supply the African market? Clearly, Africa will face a health hazard.
The restrictions introduced by the US and European countries for exports of vital medicines, reagents, respiratory or personal protective equipment affect African countries heavily. It is a wake-up call to think about how the continent should deal with pharmaceutical regulation, health-related procurement and manufacture of medicines and products in areas that are critical for disease control and protect well-being.
Billions of people today await a vaccine that ends this pandemic. Ideally the vaccine will be patent-free, rapidly produced and distributed, and free for all. No African country should be pushed to the back of the vaccine queue.
The dependency syndrome
Africa remains highly dependent on foreign funding and imports of pharmaceuticals. The production of health equipment and consumables follows a similar pattern. Covid19 has demonstrated a hidden capacity to produce masks, tests, and other essentials throughout Africa. This capacity should be nurtured. This must be a shifting point towards greater reliance on African-produced health products, coupled with investments in R&D.
Industrialized countries became rich by manufacturing and exporting to others, including high-quality goods and services e.g China, Japan, Korea. Poor African countries remain poor because they continue to produce raw materials for rich countries. For example, 70% of global trade in agriculture is in semi-processed and processed products, cocoa, coffee, cashew, sesame, etc. Africa is largely absent in this market while the region only remains an exporter of raw materials.
How did Vietnam, with a population of 95 million, emerge from a 20-year civil war to lift more than 40% of her population out of poverty between 2002 and 2018, developing a manufacturing base that spans textiles, agriculture, furniture, plastics, paper, tourism and telecommunications? It has emerged as a manufacturing powerhouse, becoming the world’s third-largest exporter of textiles and garments (after China and Bangladesh). Vietnam is also the second largest coffee producer and the top producer of Robusta coffee in the world.
Since the onset of the US-China trade war and now the COVID-19 pandemic more manufacturers are moving their base to Vietnam.
Vietnam currently exports over 10 million tonnes of rice, coming third after India and China. In 2016, exports to Ghana, at the time the second largest buyer of Vietnamese rice, surged nearly 40 percent to 350,000 tons. Shipments to Angola, another potential market, rose 4.6 times in volume and 3.6 times in value in the same year.
Ghana’s demand for rice is around 1.6 million tons per year and the country depends on imports to cover more than half of that amount. In 2019, Ghana top trading partners for rice were Vietnam with a share of 71% (268 million US$); Thailand with a share of 16.1% (60 million US$); India with a share of 4.2% (15.7 million US$).
To ensure national food security amid the covid-19 pandemic Vietnam stopped the export of rice on 24th March, resuming exports on 11th April 11. This affected a lot of importing countries, including several West African countries.
Food security is quickly becoming an urgent issue as the world’s population is increasing and natural disasters are becoming more frequent.
The pandemic has exposed Africa. African leaders need to reflect and think deeply to formulate long-term strategies to address the weaknesses that this pandemic has revealed. They must ask themselves where they want to position the continent in the next thirty years and beyond.
What then should be done?
Africans need to move away from the commodity-driven model which has failed in creating prosperity.
With a consumer base of 1.3 billion and $3.3 trillion market under the African Continental Free Trade Area (AfCFTA), the continent must bring together its fragmented markets.
Be it feeding its own people or building industrial powerhouses led by African champions, the Africa of tomorrow must look inwards for its solutions. Perhaps this pandemic can herald structural transformation in the continent.
It’s an opportune time for Africa to execute structurally trans formative projects that generate positive outcomes for the country along with social returns. Africa needs to address its weaknesses, build on its strengths. It must build better private and public institutions, strengthen weak ones and set up new ones that are missing.
Wake up Africa, cease the opportunity that this pandemic has presented.
Logistics for transporting capital and consumer goods across the region need predictable structures. To achieve this private and public institutional challenges such as custom regulations need to be restructured and long-term regulations and agreements put in place so supply chains can be strengthened.
Roman philosopher Seneca once said: “Luck is what happens when preparation meet opportunity.”
ACTION is the part missing from this quote. Opportunity and preparation without action is pointless. Action is what you get when you avail yourself to the opportunity and do something.
Luck isn’t just about being at the right place at the right time, but also about being open to, ready for, and taking advantage of the new opportunities.
For African leader’s it’s about being skilled at creating and noticing chance opportunities and adopting a resilient attitude that transforms this pandemic into a good opportunity. Countries must pool all the knowledge, experience and resources at their disposal for the good of the continent. There is probably no better time to fast track change than now.
This is a chance to accelerate transformation and even leapfrog. Calls for debt relief is just like placing a band-aid to a wound that requires surgery. Something much more ambitious and radical should be envisaged.
This crisis allows Africa to think big. This is an ideal time for collective action within Africa and with the rest of the world to re-imagine and re-engineer Africa’s future.
It only seems impossible until it’s done, said the late Nelson Mandela, a very apt statement for Africa.