Early in the Covid-19 pandemic, there was great concern over how the disease would affect Africa. Overcrowded and under-resourced healthcare networks across the continent, coupled with a high prevalence of other infectious diseases such as malaria and HIV, were seen as a potential timebomb. Six months later, the most dire health warnings have proven to be incorrect.
Things are bad (and likely worse than official numbers imply) but they aren’t as devastating as initially feared. The real challenges are economic, many African countries are reeling from a devastating Covid-related economic fallout that demands action.
High Transmission, Low Mortality
As the world marked the one-millionth reported Covid-related death in September, Africa’s total was just over 35,000. That’s 3.5 percent for 17 percent of the world’s population. Is this accurate? It’s hard to say. Take East Africa, for example. While Kenya and Uganda moved quickly to implement lockdowns and social distancing, Tanzania’s president encouraged people to attend churches and mosques because he said Covid-19 was the work of the devil and prayer could defeat the virus.
Unsurprisingly, exact numbers on Covid cases in Tanzania are difficult to come by. Meanwhile, Kenya (population: 51.5 million) has had 42,000 cases and 787 deaths; Uganda (population: 43 million) has had 10,000 cases and 95 deaths; and Nigeria (population: 196 million), 61,000 cases and 1,116 deaths. Tanzania, with a population of 56 million, has reported 509 cases of infection. No data is available for Covid-related deaths.
Africa’s pandemic response is a convoluted and confusing story. Many governments established full and dramatic lockdowns early on. South Africa’s lockdown, which barred outdoor exercise and the sale of alcohol and tobacco, was one of the strictest in the world. Zimbabwe only began easing its lockdown in the last two months. Despite these measures, the virus has run rampant across the continent, but death rates are among the lowest globally.
Scientists believe the continent’s mostly young population is the primary reason for the low death rate. There is additional research suggesting that the BCG vaccination against tuberculosis, which is provided at birth in most African countries, can produce better outcomes in younger patients. We might never know the answer, but that shouldn’t prevent action over matters within our control, namely the economic fallout.
The economic consequences of the pandemic might eventually be deadlier than Covid-19 itself. Lockdowns, coupled with a plunging global economy, have put leading African economies in precarious positions. Bloomberg reports that Zambia just skipped a coupon installment on its Eurobonds this week, dramatically increasing the likelihood of a debt default. In what is becoming a test case for the upcoming debt crisis on the continent, the Zambian government called on private creditors to agree to a deferral on debt payments but many don’t want to comply.
In perhaps the clearest and most significant sign of despair, South Africa was forced to accept a $4 billion loan from the IMF. In Kenya, a regional trade hub, there was a 19 percent drop in total trade volumes in April. There was a modest increase in volume in July and August, but the damage from the initial shock has been profound and is still reverberating.
At this year’s annual IMF and World Bank meetings, pressure mounted on lenders to accelerate debt forgiveness and grants to struggling African countries. The IMF’s managing director, Kristalina Georgieva, called on the World Bank to disperse more grants to African countries and announced that the IMF had provided $26 billion in fast-track support to Africa since the start of the pandemic.
Is this the right course of action? Perhaps immediately, when emergency fiscal support is crucial to addressing rising poverty, hunger, and deepening economic crisis. While some countries have made progress slowly building up local economic infrastructure – think fintech – there is still too little continent-wide trade. Crucially, Africa trades mostly with the world outside Africa, selling raw commodities to Asia and the West, and buying finished goods from China, for example.
The Covid-19 pandemic is a wake-up call for Africa to become more self-dependent through intra-continental trade, making it more resilient in the face of global downturns. With a lower percentage of people affected by Covid-19 than elsewhere in the world, robust intra-Africa trade would provide a buffer in terms of jobs. Redirecting grants into building a bigger manufacturing sector is a critical long-term step to safeguard future generations of Africans from whatever turmoil might come their way. Covid-19 can be – indeed, should be – the crisis that finally solidifies the Africa Free Trade Agreement or ushers in a radical new economic agenda for the continent.
Some things I read recently
How Wim Hof uncovered the secrets to our health
A 4000-year history of cats walking over our stuff
Physicists just stored and transported light itself
Mozambique’s gas windfall and the long arm of ISIS
A final thought
“Do not compete with what is happening. To compete is to prepare for failure. Do not be trapped by the need to achieve anything. This way, you achieve everything.” - Frank Hebert, Dune: Messiah
Very interesting! A few thoughts:
1. Surely one should excess deaths rather than official COVID death to calculate mortality rates? When doing this SA COVID deaths per X seem in line with global standards.
2. "South Africa was forced to accept a $4 billion loan from the IMF" - I don't recall it happening like this - "forced". SA pre-emptively asked the IMF for a loan through its short-term fund. We requested it. I supported this request. But note we still had - and have - space for QE and borrowing in bond market. It was not a last resort.