Business Beyond Covid
ELSIE KANZA: The pandemic has created an ethos of urgent action in Africa
Suddenly previous obstacles to change are surmountable as bigger ones are overcome
There is no shortage of innovation in Africa, yet ambitious attempts at systemic change are often characterised by a steady crawl rather than the high-speed agility seen during the Covid-19 crisis. The immediacy of the existential threat requires a different pace.
While the hardware for change has been building over the past decades, the software — such as political alignment and cultural resolve — has sometimes held things back. But the pandemic has shifted the cultural context almost beyond recognition. Suddenly previous obstacles to change are surmountable as bigger ones are overcome, and an ethos of urgent action becomes the norm.
Africa’s challenges as a result of Covid-19 are big. The pandemic has disrupted government revenues, foreign direct investment, development assistance, remittances, trade and tourism — let alone the February oil price shock and its after-effects. There has also been a big impact on small businesses, particularly those involved in the service sectors.
Already a minor player in global trade terms, African economies are in danger of even greater marginalisation as a result of a macro trend towards deglobalisation. The postponement of the implementation of the Africa Continental Free Trade Area (AfCFTA) from July to January 2021 delivers a blow to immediate trade prospects and associated socioeconomic benefits.
The silver lining to the crisis has been the fast-tracking of Africa’s digital economy, particularly with respect to e-commerce. This, together with renewed momentum around public-private collaboration, has already bolstered regional resilience to the health pandemic.
My journey with the World Economic Forum (WEF) began in 2006 when the new president of Tanzania had the opportunity to share his leadership vision with regional and global leaders at the WEF on Africa in Cape Town. Subsequently, we launched a public-private co-operation initiative to leverage private-sector investment to transform food systems and smallholder farmers, in collaboration with the forum’s New Vision for Agriculture system initiative. In 2010 the forum held the Africa meeting in Dar es Salaam, focused on agriculture, which culminated in the launch of a pan-African initiative called Grow Africa at the Africa meeting in 2011 in Cape Town.
How do we meet these challenges as a unified front? How do we restore or establish resilience? How do we use science, technology and innovation to continue to keep our economies and societies going?
I joined the forum shortly thereafter, excited by the prospect of expanding public-private collaborations to accelerate growth and development to meet important systemic challenges, beginning with infrastructure. Almost 10 years on we have made strides across multiple countries and industries in the region. These include the WEF's Promoting Global Financial Inclusion project; the Accelerating Sustainable Production project; the Tropical Forest Alliance 2020 (TFA 2020); the Grow Africa initiative; the Africa Infrastructure Fellowship Programme; the Global Water Initiative and the 2030 Water Resources Group; and the internet for All project.
We also strengthened the global community committed to Africa through annual summits held in Ethiopia, Nigeria, Rwanda and SA, as well as in Davos, Switzerland. Since 2017 we have focused on lessons learnt in almost 30 countries in Sub-Saharan Africa to create tangible action and impact. Public-private co-operation has become a mainstream multisector approach.
As we enter the decade of delivery for the UN sustainable development goals and look to the forthcoming implementation of the AfCFTA, the ticking time bomb of tens of millions of young Africans hitting the job market every year, the effects of mounting climate change and persistent health security crises are ever-present.
How do we meet these challenges as a unified front? How do we restore or establish resilience? How do we use science, technology and innovation to continue to keep our economies and societies going? These are the questions that keep me up at night. Covid-19 has increased the urgency and imperative for institutionalised multistakeholder solutions, and the forum remains key to building bridges between Africa and the rest of the world.
Within the context of the eventual operationalisation of the AfCFTA agreement, and with the Covid-19 crisis enduring, here are five pathways to drive economic recovery and build resilience, with tangible initiatives already under way:
- New financing models for rapid recovery. The Covid-19 pandemic is likely to drive Sub-Saharan Africa into its first recession in 25 years, with growth potentially falling as low as -5.1% in 2020. In addition, 20 African countries are either at or close to debt distress levels. In the medium term, due to fiscal consolidation in the traditional donor countries aid budgets are likely to be affected. There is a critical need to explore new sources of financing, innovative private sector-to-private sector solutions, and public-private partnerships to mobilise additional international financing.
- Unlocking manufacturing to mitigate global supply chain risks. With estimated pharmaceutical imports of up to 90%, the disruptions to global supply chains due to Covid-19 have posed a major security risk. Moreover, Sub-Saharan Africa is the largest rice importing region in the world and has been confronted with export bans by big rice suppliers, compounding disruptions to local food supply chains due to restrictions on movement. There is renewed emphasis on boosting sustainable local and regional manufacturing capacity, especially on shortening supply chains, creating more resilience and strengthening the role of stakeholder capitalism. Cognisant of the growing importance of sustainability, co-chaired by the ministers for environment from Rwanda and SA, the African Circular Economy Alliance was conceived at the Africa meeting in 2016 in Kigali. In 2020 a formal secretariat was launched based at the African Development Bank.
- Leveraging integration and regional value chains, AfCFTA has the potential to significantly increase intra-Africa trade, strengthen regional value chains and make it easier to scale up diversification and improve economic resilience, while building capabilities to command a greater share of global value chains. For local small and medium-sized enterprises, which account for about 80% of Africa’s businesses, access to regional markets can strengthen their competitiveness and growth that in turn can alleviate the jobs crisis. The Global Alliance for Trade Facilitation (GATF) enables goods to be moved across borders more quickly and with less red tape. It does so by implementing trade facilitation projects in emerging markets through public-private co-operation. In Africa, projects have been launched in Ghana, Kenya and Nigeria. After the addition of five projects, by the end of 2020 Africa will be the biggest region for the GATF.
- Revitalising infrastructure and connectivity. One of the region’s top developmental challenges continues to be the shortage of physical and social infrastructure. Greater economic activity, enhanced efficiency and increased competitiveness are hampered by inadequate transport, communication and power infrastructure. Moreover, the region’s social infrastructure, including water & sanitation, education and health, is under extreme pressure in the fight against the Covid-19 pandemic. New public-private and private-private collaborations are called for to tap new sources of liquidity to expedite the delivery of green infrastructure. Equally, the Sustainable Development Investment Partnership seeks to mobilise blended finance and unlock private financing for sustainable projects via its Africa hub, based in Johannesburg.
- Scaling up digital transformation and inclusive innovation. Covid-19 has changed the digital innovation landscape in Africa, from health-care tech solutions and online education platforms to mobile payment services and online retailing, encouraged by co-operation from regulators and governments. In addition, digital innovations have facilitated the analysis of big data relating to citizens' movement, disease transmission patterns and health monitoring to aid prevention measures. Fourth industrial revolution technologies, such as the use of drones and artificial intelligence, are playing instrumental roles. Not surprisingly, African entrepreneurs with a digital footprint are embracing Covid-19 as a positive game-changer. In 2020 two new affiliate centres for the fourth industrial revolution are to be established in Rwanda and SA.
Collectively, these pathways might create a tide of change that uses the urgency of Covid-19 recovery to permanently lift the fortunes of communities and nations across the continent.
Following the 2014 Ebola virus crisis in West Africa the AU set up an Africa Centres for Disease Control (CDC). The Africa CDC played a big role in ramping up the readiness of national health systems on the continent as the Covid-19 outbreak started to emerge globally. Apart from setting up regional collaborating hubs, the Africa CDC also strengthened collaboration with the private sector, building on initial support from the Jack Ma Foundation when global supply chains for health-care equipment collapsed.
The Africa CDC set up a partnership to accelerate Covid-19 testing in Africa, focused on conducting millions of Covid-19 tests and deploying 1-million community health-care workers for tracing and training 100,000 health-care workers to support treatment. In June the Africa Medical Supplies Platform (Africa MSP) and the Africa Communication and Information Platform for Health and Economic Action (Africa CIPHEA) were set up.
The Africa MSP is a pool procurement platform for critical laboratory and medical supplies for African governments, prioritising “made in Africa” products. Spearheaded by the UN Economic Commission for Africa, the Africa CIPHEA is a collaboration between big mobile network operators in the region, governments and international development organisations, which enables evidence-based decision-making through sharing of intelligent information and analysis of live data.
The mobilisation and co-operation among the AU’s member states is an example to other “more advanced” regions, and is an indication of Africa’s real potential for transformation. Where political will aligns and the context urges collective action, the combined outcome is greater than the sum of its respective parts.
• Kanza, a former economic adviser to the presidency of Tanzania, is Africa head of the World Economic Forum.
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