KUSENI DLAMINI: You cannot have a strong economy without a healthy population
President Cyril Ramaphosa’s risk-adjusted and phased strategy to resume economic activity makes perfect sense and deserves our full support
The urgency to rebuild the huge economic and social damage wreaked by the Covid-19 pandemic is the pressing strategic priority of our time. This is as urgent as the remaining and ongoing imperative to prevent a second wave which requires thorough vigilance by all role players in government, business and, more importantly, citizens.
It is inescapable that the pandemic has changed and will change the way in which business is done, lives are lived and the way in which governments govern for years to come. The infrastructure of containment built to stop the spread of the pandemic has decimated economic growth in ways that are unprecedented over the past 100 years.
Authorities were correct to mount the swift and decisive responses they did to contain the exponential spread of the virus, which would have overwhelmed many a healthcare system and cost millions of lives around the world.
The focus on the three Ts at the core of global containment strategies — testing, tracing and treatment — have been proven, by all accounts, to have been correct as curves around the world are starting to show signs of flattening.
The green shoots towards opening up economic activity that are emerging in Europe and in countries such as New Zealand, South Korea, Norway, China, Taiwan and here in SA are encouraging. In the UK, Prime Minister Boris Johnson is due to announce the easing of lockdown regulations on Sunday and stop the encouraging of people to stay home, which has been a key element in their three-pronged strategy of “stay home, protect the NHS and save lives”.
The green shoots need to be cautiously celebrated and deeply consolidated. The urgency to return to a new state of normalcy is as key as the urgency to contain the inexorable spread of the pandemic through a second wave or spike.
There can be no strong and prosperous economy and society without a healthy population. And vice versa: there can be no healthy and thriving population without a strong and prosperous economy. That is why the trade-off or dichotomy that some infer between fighting the pandemic and return to normal economic activity is naïve at best and false at worst.
You can’t have one without the other. It’s a fine and deliberate balancing act that is required. That is why President Cyril Ramaphosa and his administration’s risk-adjusted and phased strategy to resume economic activity makes perfect sense and deserves our full support.
The World Bank has indicated that Sub-Saharan Africa will face its first recession in 25 years with growth projected to fall from 2.4% in 2019 to -2.1 to -5.1% in 2020. Although Africa has thus far been the least hit by the virus from a healthcare perspective, it is projected to suffer the most economically, as 23-million Africans are likely to be pushed into extreme poverty compared to 16-million Asians.
SA Reserve Bank governor Lesetja Kganyago has revised the country’s economic growth forecast downwards to -6.1%. The Bank expects SA’s growth to improve to 2.2% in 2021 and 2.7% in 2022.
What then needs to be done to expedite the recovery from the economic meltdown unleashed by the Covid-19 pandemic? Here is my five point plan.
First, a new paradigm shift is required on strategic supply chains. The Covid-19 pandemic has exposed the fragility and vulnerability of our supply chains when it comes to accessing personal protective equipment (PPE) for our healthcare workers and ordinary citizens alike.
A new strategy or policy to build, maintain and perpetually promote local productive capacity is required as a matter of urgency. We should aim to be net exporters of PPE rather than the importers we currently are.
Second, there is an urgent and serious need for a comprehensive and fresh rethink and reset of our industrial policies to ensure that they are geared towards embedding maximum value addition and domestic reliance on key and strategic product areas beyond healthcare.
This should be linked with repositioning our economy to be a world-class manufacturer and exporter of key products to a global market of 7.7-billion people, not just produce for 60-million South Africans or the 1.2-billion Africans.
Germany and South Korea have done that successfully. So can we. The speed at which some local companies repurposed their plants to produce PPE and other medical supplies shows the ingenuity and innovative capabilities of SA business — black and white alike.
Third, regional integration must at the core of building a globally competitive and resilient economy. Africa is notorious for being the continent that trades the least with itself and more with other continents.
According to the UN Conference on Trade and Development (UNCTAD), in 2019 intra-African exports were 16.6% compared to 68.1% in Europe, 59.4% in Asia and 55% in North America. It is very clear from the figures that regions that trade more within themselves outperform those that trade the least.
That is why the African Continental Free Trade Area (AfCFTA)’s launch, (which was due to be launched on July 1 but a postponement has been announced), should not be delayed or derailed by the Covid-19 pandemic. The authorities should not panic and postpone this important and historic milestone in African regional economic integration. I urge them to be resolute and stay the course.
More than ever before and due to the challenges of Covid-19, SA should lead the charge and champion substantive regional economic integration in Africa for generations.
Fourth, huge expenditure in infrastructure development in its broadest sense must be the cornerstone of rebuilding SA and Africa’s economies as part of a comprehensive recovery plan. Africa’s underdeveloped infrastructure presents a ready-made stimulus for inclusive growth and job creation.
The key issue is mobilising private sector, development finance institution and public sector funding as well as the political will and commitment to make it’s happen.
Fifth, there is urgent need for smart, rational and evidence-based reform that will assist in restructuring and transforming our economy and Africa’s economies to build their own resilience and capacity to cope with future pandemics.
Pandemic preparedness has to be part of our National Development Plan (NDP) and the African Union’s (AU’s) Agenda 2063 — “The Africa We Want.” At the core of this must be creating an enabling environment and ecosystem for a globally competitive and world class private sector to emerge with new and efficacious solutions to old and new problems and challenges alike. This can and must be done.
• Dlamini is the chair of Aspen Pharmacare and Massmart Holdings. He writes in his personal capacity
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