Is COVID-19 Africa’s economic curse or cure?
Will COVID-19 propel Africa to new economic heights? Or will it cause more people to die from starvation and leave Africa’s economy in ruins? These were some of the questions that were addressed by four African business experts who participated in an MBA panel discussion for a module called Perspectives on African Frontiers.
Dr Nthabiseng Moleko, who hosted the event for USB, quantified that due to COVID-19, 30 million people have lost their jobs in Africa, and a third of the continent’s countries are now at risk of debt distress. Africa is also estimated to lose half of its GDP growth, which is expected to plummet from 3.2% to 1.8%.
“The impact of Corona will be felt for decades to come,” said Dr Louis van Pletsen, the Founder and Director of InAfrica Holdings. He added that 580 million informal workers in Africa had seen their average income decrease by 80% in the last month. Van Pletsen emphasised that the impact would be five times that of the 2008 financial crisis.
“We will have more people die of starvation than of COVID-19,” said Andrew McLachlan, the Managing Director for the Hilton Hotel Group in Sub-Saharan Africa. McLachlan stated that jobs should be created in this time rather than taken away.
“We need to understand the catastrophic nature of complete lockdown and look at other ways to live with this virus in our midst,” said Moleko, who asserted that a balance should be found between restrictions and possible labour activities.
Even though the negative impact of COVID-19 is evident, this crisis might also be the trigger that Africa needs for economic development. “COVID-19 represents an opportunity for the continent to re-enter global markets,”, she said.
“After the Great Depression and even after World War II, many countries had to restart from scratch. Now we all have an opportunity to rebuild, reconfigure and restructure.”
Van Pletsen asked: “Africa, do we have to stand back for anyone else in the world?” when he compared Africa’s resources to those of India and China. Africa is home to 1.2 billion people, roughly the equivalent of India and China. Africa is also ten times the size of India and three times the size of China geographically. Half of Africa’s population is younger than 18 years old. “If this was material to work with, you would not find a better place to do so,” he stated.
Dr David Monyae, the co-director at the University of Johannesburg Confucius Institute (UJCI), pointed out that only 12% of Africa’s trade takes place within the African continent. This is another opportunity for Africa to look inwards for development, given that exports and imports are limited.
In closing, Wilmot Magopeni, the Executive Head of Business Development for FNB, shared a quote from Shakespeare: “There is nothing good or bad, but thinking makes it so”. Wilmot added that he sees vast opportunities in the continent.
It is clear from the panel discussion that Africa finds itself at a crossroads. And while it has the resources and the opportunities to make an economic come-back, the only people who will bring this to fruition will be Africans themselves.
*This article was written by MBA students as part of a group assignment for the module Perspectives on African Frontiers.