Economic recovery requires collaboration
There is no doubt the Covid-19 pandemic has affected millions and brought the economy to an almost standstill.
There is no doubt the Covid-19 pandemic has affected millions and brought the economy to an almost standstill.
But with this in mind, it is important to take into consideration that each continent was affected differently. Reuters, together with Brand South Africa, kicked off its series of discussions to explore the African economy post-Covid-19.
The panel discussion on 16 September was led by conversation strategist and global moderator for Reuters, Nozipho Tshabalala, and consisted of African Union Special Envoy for Covid-19 Trevor Manuel, director of capital markets at the Johannesburg Stock Exchange Valdene Reddy and director of the division for Africa at the United Nations Conference on Trade and Development (UNCTAD) Paul Akiwumi.
The conversation looked at ways in which the continent can accelerate a strategic economic recovery and what could be done to hedge against future uncertainty.
According to Reddy, one of the silver linings about the current economic crisis in Africa is that it is quite similar to the 2009/2010 financial crisis. “Despite African countries having their own concerning macro-conditions and political uncertainties that we came into Covid-19 with, we still stood strong across the market,” she said.
This was made possible due to the continent’s high calibre of infrastructure, liquidity and opportunities, and quality of investment.
Reddy added that another positive that came out of Covid-19 is that it has made everyone more deliberate with their actions because we all have a shared interest in getting this right. “In terms of how this will affect the continent, it is really about asking how do we all work to initiate one common sustainable economy recovery?”
Manuel continued that before we can initiate any sort of recovery and rebuild post-Covid-19, we really need to look at what damage or effects the pandemic has caused. “In anticipation of the pandemic, most Africa countries responded similarly in a sense that by around April or May virtually every country had closed schools, most countries prevented gatherings and many imposed a curfew.”
Manuel added that this also means that in reality, Africa is faced with a major ‘economic cliff’ which was largely imposed on by the preventative measures that each country had taken. This is why a plan for economic recovery will require collaboration.
He added that there are six key issues of interest that the continent must observe carefully during this current period because it will effect what happens from here on.
These six issues include:
- Rising public debt
- Weakened global growth and its impact on trade with Africa
- A heightened need for economic diversification across the continent
- The risk of reconfiguration of the global value chain
- Increasing digitalisation
- Resurgence of continental poverty.
“We need to take these issues into account because there is a sense in which per capita GDPs have actually recoiled to a point to where the continent was at about a decade ago,” Manuel concluded.
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