Commentaries | Aug 31,2019
April 4 , 2020
By Yonas Biru (PhD) ( He was the deputy global manager of the International Comparison Program at the World Bank. )
In the commentary piece headlined, “Marshall Plan for Africa Now or Doom by 2050,” [Volume 20, No 1026, December 29, 2019], I argued that a blend of population explosion and a perennially slouching economy offer the closest thing to a social petri dish of culture that might incubate a virus.
Health experts across the world have long feared that we were not ready to face a new global pandemic that the World Health Organisation (WHO) referred to as “Disease X.” The risk of pandemic increases astronomically with population explosion. If left unchecked, “the world is best advised to brace itself for what may be called Disease XXX by 2050,” I argued.
What I did not know at the time was that Disease X was already lurking in the shadows in China, seeping across borders in a quest to invade the planet with unprecedented speed and wrath. Nor did I know that the mighty microbe would claim COVID-19 for a name and knock the wind out of developed countries, leaving them in a state between crawling and staggering to regain their footing.
By sheer luck or divine intervention, the virus originated in China and the WHO was alerted within 20 days of the first known case of Coronavirus. Had the virus originated in Africa, it would have taken much longer before anyone could have connected the dots and realised a deadly pandemic was brewing. It is frightening to imagine the enormity of the calamity had the virus been native to Africa.
Africa still casts a long shadow in the global pandemic. How fast the world can slow down and contain the spread of the microbe within and across national boundaries and ultimately defeat it depends on the slowest wheel on the cart, which is Africa. This needs immediate fixing.
The US is currently too preoccupied with saving New York, New Jersey, California, Michigan and a swath of other COVID-19 ravaged states to worry about addressing the needs of Africa. Europe was a no-show when it came to assisting Italy, and Africa cannot hang its hat on its support.
On March 4, the International Monetary Fund (IMF) announced that it has earmarked “up to” 10 billion dollars for low-income countries, including nearly all Sub-Saharan Africa and parts of South Asia. Soon after, the World Bank mobilised 14 billion dollars to fast-track funding to combat the global Coronavirus pandemic, part of which will support Africa.
The United Nations could only contribute 15 million dollars to the international community's financial aid pool. Despite the enormous and urgent need for it, we do not see the level and type of international support commensurate with the impending threat facing Africa.
To put the international aid package in perspective, according to the UN Economic Commission for Africa (ECA), Nigeria is expected to lose 14 to 19 billion dollars from crude oil exports in 2020. COVID-19, ECA estimates, could slash Africa’s total export revenue from oil alone by 101 billion dollars.
No doubt, once they get the crisis on their home front under control, self-preservation will oblige developed nations to help Africa contain and arrest the virus. But then it may be too late. The world can mitigate the consequences of its inaction by blocking flights to and from Africa until the virus is contained and defeated. But Africa must fend for itself.
Africa’s problem is not limited to the large number of people doomed to be decimated by the virus. Economic collapse is just as consequential. A week ago, 20pc of the world’s population was under lockdown, according to The Guardian. At the writing of this article, over 80 percent of the US population is under government advisement recommendations or legally enforceable sanctions to stay at home. In the same manner, much of Europe is on lockdown. In economic lexicon, global lockdown spells global economic slowdown.
There is a broad consensus that the world economy is marching toward a bad recession. There is also apparent unanimity of opinion that Africa is in dire straits as the most vulnerable continent.
Lifting the proverbial economic hood and peeping into its components reveals worrisome signs; apart from the impact of a general global demand shock, global supply chains have been disrupted, and international trade and the tourism industry collapsed.
Two-thirds of African countries are net importers of basic food. Skyrocketing food prices that are caused by a surge in demand (as people stock up and hoard in anticipation of a longer lockdown) and a breakdown in global food supply chains are bound to severely impact food security. Making matters worse, most African countries neither have a reliable social safety net to cushion the crisis nor command adequate financial resources to bail out business owners and farmers.
If the virus takes over Africa as it has in Italy or the US, an economic collapse is not only probable but also entirely plausible. A devastating viral attack coupled with significant economic losses can push the boundaries of people's tolerance beyond their threshold and exhaust their coping mechanisms, leading to violence, social breakdown and political turmoil.
African governments need to hope for the best and prepare for the worst. Top on their to-do list must be protecting government officials, the military and the police from COVID-19. Their survival is critical for the survival of their nations in this difficult time.
Almost as important is their lobbying of multilateral institutions and governments of developed countries for economic assistance so they have adequate fiscal space to respond to the public health and economic threat the virus poses.
Meanwhile, African governments need to collectively appeal to the IMF board to inject financial liquidity into African economies through its Special Drawing Rights (SDRs) window. In layman terms, SDRs are international currencies created by a supermajority vote of 85pc of IMF shareholders. Once created, it can be exchanged for any hard currency be it US dollars, euros or any other.
This is neither novel nor unprecedented. In April 2009, leaders of the G20 met in London and agreed to create 250 billion dollars in SDRs to help overcome the global financial crisis. The money was used primarily to help repair the crumbling financial systems in rich and emerging countries. The SDRs are indispensable instruments to create liquidity and provide African governments adequate fiscal space to respond to the epic public health and economic threat the Coronavirus poses. Not to use them will be a moral failure of historic proportion.
PUBLISHED ON Apr 04,2020 [ VOL 21 , NO 1040]
Commentaries | Aug 31,2019
Radar | May 18,2019
Viewpoints | Jul 27,2019
Featured | Nov 21,2018
Advertorials | Oct 10,2019
Covid-19 | Apr 08,2020
Advertorials | Jul 03,2019
Viewpoints | May 11,2019
Commentaries | May 01,2020
Fortune News | Jan 11,2020
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