Africa Could Surprise Again If Mobility Enhancing Reforms Are Implemented Swiftly

Published on 13th October 2020

Africa was expected to bear the brunt of the Covid-19 pandemic. In May the World Health Organization predicted that nearly a quarter of a billion people across 47 African countries would contract Covid-19 over the next year because of its weak health systems and a population disproportionately affected by infectious diseases.

It did not happen. Thanks to public health interventions and a young population among other factors, by late September there were 1.3 million confirmed infections and 1.1 million recoveries on the continent, according to the Africa Centres for Disease Control and Prevention.

Can this success story be replicated as the continent now turns to fixing its economies? The IMF projects that Africa’s GDP will plunge from 3.2% to -2.8% in 2020. Africa will lose between USD 53 billion and USD 120 billion in contributions to its GDP in 2020 because of the crash in tourism alone, according to the World Travel and Tourism Council. Collapses in the oil price and vertiginous drops in demand for agricultural exports have devastated economies from Nigeria to Kenya.

The speed of economic recovery will largely depend on Africa’s ability to return to pre-pandemic mobility levels rapidly. Mobility will continue to be severely curtailed in unpredictable ways, and economic revival is uncertain. Nothing illustrates this quite like South Africa opening its international borders on 1 October after a severe lockdown, with all travelers from Africa welcome (due to Africa’s low Covid-19 infection rates) while visitors from developed countries such as the US, who in the past waltzed through borders, are designated as presenting a greater risk of virus spread and face severe restrictions. South African Tourism says it will take 24 to 30 months for tourism activity in the country to recover.

US–China trade and political rivalry is intensifying. Policy uncertainty about Africa in both jurisdictions may delay crucial investment decisions at a time when the continent needs it most. The UN Conference on Trade and Development predicts that foreign direct investment flows to Africa will contract by 25%–40% in 2020.

Mobility of African talent will be affected by new policies brought on by the pandemic — or by exploiting it. In June, the US extended a freeze on green cards for new immigrants and suspended new visas for skilled workers, for example.

The consequences are obvious: The World Bank predicts that remittance flows to sub-Saharan Africa will shrink by 23.1% this year.

South African and Nigerian billionaires, Johann Rupert and Tony Elumelu, say the pandemic presents an opportunity to ‘reset’ Africa. That ‘reset’ is within Africa’s grasp if the African Continental Free Trade Area (AfCFTA) is implemented with some vigor by African leaders — immediately.

With 54 African Union member countries signed up, AfCFTA creates a single market of 1.3 billion people. It could bolster Africa’s income by USD 450 billion and lift 30 million people out of extreme poverty by 2035, says the World Bank. To achieve this, Africa’s leaders need to implement domestic policy reforms energetically — particularly those aiding the movement of capital and people — to facilitate the necessary trade and attract investment.

If AfCFTA implementation succeeds, then a second surprise — similar to its successful fight against Covid-19 — may be in store from Africa. It will require intense work and decisive leadership.

By Justice Malala Newspaper Columnist, Author, and Entrepreneur in Los Angeles in the US

Courtesy:  Henley & Partners


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