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Professor Alan Hirsch

  • [Op-Ed] South Africa—can its achievement in containing COVID-19 lead to sustained success in dealing with the crisis? - writes Professor Alan Hirsch

    By Professor Alan Hirsch

    This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide. First published on 28 April 2020, in OECD Development Matters.

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    Empty streets in Cape Town, South Africa, during the Covid 19 lockdown. April 2nd 2020. Photo: Shutterstock

    On April 21st, President Ramaphosa announced a huge economic support programme designed to assist the vulnerable poor and sustain small and medium businesses in distress. The package is valued at R500bn or $25bn, including R200bn in credit guarantees and R130bn through reprioritisation of the budget. Some of the funds will also come from the Unemployment Insurance Fund. It is a massive package by South African standards at 10 percent of GDP or a third of the annual budget. The package has been widely acclaimed, almost across the entire political spectrum. It is pro-poor and pro-formal sector employee; and supports businesses through SME support, a job creation and retention fund, as well as through credit support.

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    Source: Bureau for Economic Research Economic Comment: Fiscal package 22 April, 2020

    President Ramaphosa has also been acclaimed for his continental leadership as Africa’s G20 member and as Chair of the African Union. Working with the Chair of the AU commission, he has established a strong team of African financial leaders to lobby for the continent across the financial community.

    South Africa has been recognised globally for its success in flattening the curve. On April 16thThe Economist reported that in South Africa “in the week to March 28th the number of confirmed cases quadrupled. But it took 17 days for the reported tally to double after that date. What looked at first like a Britain-style trajectory has come to appear more like South Korea’s (see chart).” This was a result of President Ramaphosa listening to experts and responding quickly with social distancing introduced on March 15th and a lock-down on March 27th.

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    Success in flattening the curve has been the result of a strict “level 5” lockdown, prior to the easing of restrictions on April 23rd “to level 4”. South Africans have been allowed to go outside of their homes to buy essentials or for medical needs, but not to exercise or walk the dog. The sale of alcohol is banned, as well as cigarettes and “cooked hot food” (the latter two to be lifted on Friday). The streets are largely deserted except for a few of the homeless poor who have evaded efforts to corral them into emergency camps for safety purposes.  A number of these measures have been faced with legal challenges: one court case contested the ban on the sale of cigarettes; another the ban on the sale of cooked hot food. Both court actions have derived from the extreme restrictiveness of the South African lockdown.

    The rationale for this tough regime in South Africa (and in some other developing countries) is a lack of confidence in the national capacity to treat and cure COVID-19 and other patients. Compared with developed countries, most developing countries also have poorer testing capacities and weaker tracing systems. However, compared with many other developing countries South Africa has the (dubious) advantage of having driven a huge public health initiative to combat the spread and impact of HIV/AIDS. It has skills, knowledge and systems, but the capacity of the health system and access to intensive care and assisted breathing facilities are still limited.

    The strictness of the lockdown has evolved into a paternalistic approach that has verged on control-freakishness. There have been several cases of excessive force used by police and soldiers who conduct patrols to enforce the lock-down. Level 4 includes a 9-hour curfew from 20.00 to 05.00, with a recently increased call out of the defence force, presumably to enforce the curfew.

    This could be a result of a trust deficit between government and citizens. Francis Fukuyama has argued that the difference between successful “flatten the curve” initiatives and weaker outcomes is not explained by the authoritarian/liberal divide, but by the degree of confidence of citizens in the competence of their government and the quality of leadership. While President Ramaphosa’s already high popularity rating seems to have risen as a result of his decisive responses to the crisis, the trust of South African citizens in government and political parties is considerably lower. It may be knowledge of the lack of trust in government institutions that has led to the paternalistic behaviour by many parts of government.

    The extreme lockdown also raised huge questions of welfare and economic sustainability. 42 percent of firms responding to a new national survey indicated that they doubted they could survive the lockdown. Sixty-six percent of respondents to another new national survey were struggling to pay their expenses and 28 percent indicated that they had gone to bed hungry since the lockdown began. Many children relied on a wide-scale school-feeding scheme, which was stopped when the schools closed, and many poor providers relied on precarious sources of income, that they have been unable to tap. While 70 percent of the middle classes were comfortable with a continuation of the lock-down, only 35 percent of the very poor agreed.

    The capacity of the government to intervene is limited financially when the government is under severe financial stress, with a wide range of heavily indebted institutions including the Land Bank (the state agricultural bank) which defaulted on a loan on April 21. This follows a series of downgrades of South African government debt well into junk grade before the COVID-19 crisis struck. This was a result of mismanagement of government and government agency finances for many years which the Ramaphosa government has as yet been unable to reverse. Many developing countries are indebted and few are able to raise additional funds at anything but extortionate rates, except for the limited amount of concessional finance currently available. Some financial analysts are concerned that South Africa may already be relying too much on cash it doesn’t have to address the crisis.

    Even if South Africa and other developing countries had more funds, channelling those funds to the neediest is very difficult. South Africa has a strong system of social transfers, but many in the informal sector will not be reached through it. For all these reasons, the issue of phasedown is very urgent in South Africa, as it is in other developing countries. Some moved quicker – Ghana lifted its lockdown of two cities after three weeks, citing its severe impact on the poor and improved testing capabilities. Though the Indian lockdown was extended to May 4th, from April 20th low risk zones known as green zones had some restrictions removed.

    The new budget and the debt it will incur, make it all the more urgent that the economy begins operating at a higher level soon, and that economic growth is raised above pre-crisis levels. The next step is the judicious “risk-adjusted “phasing down of the lockdown. With its repurposed HIV/AIDS testing systems, South Africa is currently testing more than 9,000 people per day, with a total of 178,470 tested by April 27th.  This should make the process of conducting carefully managed, constantly evaluated phasing in of increased economic activity possible in the near future. It will also need a further adjustment of attitudes between state and citizens away from paternalism and compliance towards trust and cooperation.


Professor Faizel Ismail

  • [Op-Ed] “How a post-COVID-19 revival could kickstart Africa’s free trade area” — writes Professor Faizel Ismail, Director at the Nelson Mandela School of Public Governance. 

    How a post-COVID-19 revival could kickstart Africa’s free trade area

    Originally published in the Conversation, 26 May 2020
    by Professor Faizel Ismail

    The African Continental Free Trade Area was launched two years ago at an African Union (AU) summit in Kigali. It was scheduled to be implemented from 1 July 2020. But this has been pushed out until 2021 because of the impact of COVID-19 and the need for leaders to focus on saving lives.

    Studies by the International Monetary Fund (IMF), the United Nations Economic Commission for Africa and others state that the free trade area has the potential to increase growth, raise welfare and stimulate industrial development on the continent. But there are concerns. Some countries, particularly smaller and more vulnerable states, could be hurt. For example, they could suffer revenue losses and other negative effects from premature liberalisation.

    The impact of COVID-19 will only worsen these structural weaknesses. The Economic Commission for Africa has reported that between 300,000 and 3.3 million people could lose their lives if appropriate measures are not taken. There are several reasons for this level of high risk. These include the fact that 56% of urban dwellings are in overcrowded slums, 71% of Africa’s workforce is informally employed and cannot work from home and 40% of children on the continent are undernourished.

    Africa is also more vulnerable to the impact of COVID-19 because it is highly dependent on imports for its medicinal and pharmaceutical products and on commodity exports. The latter include oil, which has suffered a severe collapse in price.

    Other contributing factors are high public debt due to higher interest rate payments than Organisation for Economic Co-operation and Development (OECD) countries, a weak fiscal tax base, and the negative impact on Africa’s currencies due to huge stimulus measures taken by OECD countries.

    The COVID-19 crisis has brought these weaknesses into sharp relief. But it also provides an opportunity for African countries to address them. For example, they could accelerate intra-regional trade by focusing on the products of greatest need during the health crisis. Countries could also start building regional value chains to advance industrialisation, improve infrastructure and strengthen good governance and ethical leadership.

    These are all vital to guiding African countries through the current crisis.

    These goals can be achieved if African states adopt a “developmental regionalism” approach to trade integration. This would include fair trade, building regional value chains, cross-border investment in infrastructure and strengthening democratic governance.

    Fair trade

    A number of conditions need to be met for a free trade area to succeed.

    Firstly, African states vary widely in size and economic development. As a result some may warrant special attention and specific treatment. In particular, among Africa’s 55 states 34 are classified by the United Nations as least developed countries. These are low income countries that have severe structural problems impeding their development.

    Building trade agreements in favour of small and less developed economies will contribute to fairer outcomes of the free trade deal.

    Secondly, African governments should include their stakeholders – businesses (both big and small), trade unions and civil society organisations – in the national consultation process. This will require effective institutions that enable the fullest participation.

    Additional steps countries should take to cope with the fallout from COVID-19:

    • Reduce tariffs on vital pharmaceutical products (such as ventilators), personal protective equipment and food products;

    • Stimulate intra-regional trade by prioritising these products for an immediate or early phase down in the free trade area.

    Building regional value chains

    African countries are increasingly connected to the global economy, but tend to operate at the lowest rung of the ladder. They are mainly supplying raw materials and other low-value manufactured outputs.

    Cooperation is needed between Africa’s emerging entrepreneurs and industries to improve their competitiveness in global markets. This would have a number of positive outcomes including:

    • triggering industrialisation, which will transform economies

    • helping African countries obtain a fairer share of the value derived from African commodities and labour, and

    • improving the lives of people on the continent.

    The current crisis creates an opportunity for African countries to build value chains on medical equipment, pharmaceuticals and personal protective equipment.

    The clothing and textile sector could also be restructured to meet the needs of the health sector while taking advantage of the breakdown in supply chains from China and Europe.

    As more countries lock down their economies and apply movement controls, agricultural and processed food supply chains are disrupted. This creates opportunities to build regional supply chains and partner with retailers.

    There are also opportunities to build infrastructure to support the health response: hospitals, water and sanitation, schools, low-cost housing and alternative energy.

    African countries can also benefit from the growing interest in environmental tourism.

    Cross-border infrastructure investment

    Since most African countries are less developed, and many are small, intra-regional trade will require them to cooperate to improve their infrastructure. This includes physical ports, roads and railways as well as customs procedures, port efficiency and reduction of roadblocks.

    Progress is already being made. Examples include the Mombasa-Nairobi Corridor; the Addis to Djibouti road, rail and port connection; and the Abidjan-Lagos Corridor, which handles more than two-thirds of West African trade.

    Increased investment in these types of cross-border infrastructure projects will benefit regional integration.

    Democracy and governance

    Most African states have started accepting multi-party systems of governance. Many have also embraced a culture of constitutionalism, rule of law and human rights.

    Democratic governance supported by active citizenship will create an environment of transparency and predictability that encourages domestic and foreign investment. Both are vital for growth and industrialisation. The process is also essential for the sustainability of regional economic integration and democracy in Africa.

    Countries are becoming better at fulfilling their democratic obligations. For example, 40 African countries, including the Seychelles and Zimbabwe, voluntarily joined the African Peer Review Mechanism. The mechanism is a remarkable achievement that the free trade area agreement must build on.

    The way forward

    The free trade area could become a landmark in Africa’s journey towards peace, prosperity and integration. The COVID-19 pandemic, notwithstanding its devastating impact on the health and economies of Africa, could be an opportunity to advance the free trade area in a more developmental, inclusive and mutually beneficial way for African countries.


Professor Carlos Lopes

  • [Podcast] Carlos Lopes: Impacts of Covid-19 in Africa

    Professor Carlos Lopes in conversation with the Graduate Institute in Geneva

    Pubislhed on 13 August 2020
     
    Africa and COVID-19
     
    In this podcast, Professor Carlos Lopes discusses the impacts of COVID-19 in Africa, with more focus on the macroeconomic effects and the humanitarian consequences presented by this crisis. 

    You can listen to the full conversation            here           .
     
     
     
     
     
  • Coronavirus: together we can come out stronger and united, 13 April 2020.

    Coronavirus: together we can come out stronger and united

    Originally published in The Africa Report, 13 April 2020


    A worker sews surgical-type face masks to be used to curb transmission of the new coronavirus, at the New Dawn company in Kikuyu, north of Nairobi, in Kenya Saturday, April 4, 2020. The masks will be distributed by the Kenyan government to hospitals and also those commuting on public transport. (AP Photo/John Muchucha)

    50 African intellectuals including Kako Nubukpo, Alioune Sall, Carlos Lopes, Cristina Duarte, Felwine Sarr, Achille Mbembe, Reckya Madougou, Souleymane Bachir Diagne, Franck Hermann Ekra and Hakim Ben Hammouda co-signed this call to mobilize the intelligence, resources and creativity of Africans to defeat the COVID-19 pandemic.

    Severe Acute Respiratory Ryndrome Coronavirus 2, (SARS-CoV-2), is the scientific name for the virus responsible for a highly contagious and potentially fatal respiratory disease. Initially an epidemic and then reclassified as a pandemic by the WHO on 11 March 2020, its devastating effects are sowing death, plunging the most powerful economies into recession.

    The virus could be a precursor to disastrous days ahead for the African continent and its inhabitants. Africa is not where this pandemic started, yet it is facing its harsh effects, through increasing human contagion and the sharp contraction of a significant part of essential social and economic activities.

    Rational response

    The continent must therefore provide an essential, powerful and sustainable response to a real threat that should neither be exaggerated nor minimized, but rather tackled rationally.

    The Malthusian prognosis, which is being used in this this pandemic for a thinly veiled speculation on the so-called excessive African demography, which is now the target of the new civilizers, must be defeated.

    Disaster scenarios, considered all over the continent, could de facto have a negative impact on economies and risk assessments generally unfavorable to Africa prior to COVID-19, with investors in complete uncertainty.

    The crisis is a historic opportunity for Africans to mobilize their resources that are spread spread over all continents – traditional, diasporic, scientific, new, digital, their creativite – to emerge stronger from a disaster that some have already predicted for them.

    In the next few days we will exceed the 2 million mark of COVID-19 infections. The virus continues to spread with speed with the focus now turning to the readiness of health systems in African countries in the face of the virus.  The supply of health services, equipment, and qualified personnel, is now the source of all concern.

    The WHO has even recently called on African countries to “wake up” and “expect the worst”.

    Least impact, for now

    It should be recalled that Africa is, for the moment, the least impacted continent, with its first case confirmed in February 2020 in Egypt. Fears about the impatc of the virus on Africa so far, lack concrete and documented justifications.

    Yes, local ecosystems, demographic factors, the mutated nature of the virus, the intensity of international traffic and other elements will limit the spread of the pandemic. Though it remains hypothetical, it is also necessary to note the impact of several drastic measures decided by governments: closures of borders, schools, businesses and worship places.

    Notwithstanding the stressful nature of the pandemic, local political contexts more generally lead to an eager social demand in search of efficiency. The observation of uneven public responses around the world and the relative unpredictability of the pandemic may explain a process of trial and error.

    State of public health systems

    While the responsiveness of African countries remains varied, we must quite rightly acknowledge and remember the catastrophic effect of decades of structural adjustment on public health and health provision in African countries. In spite of everything, many health systems have substantially evolved, driven by the determination to achieve the Sustainable Development Goals (SDGs) by 2030, notwithstanding the gaps to be filled and the obvious failures.

    Depending on the country, the state of African health equipment is certainly unsatisfactory and health services are ill-equipped overall, but it would be wrong to portray non-existent health systems, paving the way for an inevitable decline.  Moreover, health care is often social and community-based, relying also on cultural ties that require solidarity and family management of disease.

    Unjustified worst-case scenarios

    For these reasons, self-fulfilling prophecies cannot be justified. Disaster scenarios, considered all over the continent, could de facto have a negative impact on economies and risk assessments generally unfavorable to Africa prior to COVID-19, with investors in complete uncertainty.

    The coronavirus pandemic has given some Western chancelleries the opportunity to reactivate an Afro-pessimism that was thought to be from another age.

    Health systems in Africa need to be totally revamped in the light of many current considerations and limitations. We should not wait for the possible breakdowns caused by a pandemic of this magnitude before acting diligently and effectively.

    A number of actions should be taken:

    • In the short term, a real economic union of African countries could enable the pooling of responses to the risks generated by COVID-19 and beyond. The multiple initiatives launched to mobilize sufficient financial resources to prevent a major economic crisis from being added to the announced health crisis are to be welcomed. We strongly advocate both rigorous management of these resources and efficient sub-regional and regional coordination of actions, in order to achieve synergy and complementarity between these initiatives.
    • Likewise, the sharing of knowledge, know-how and medical equipment will be a decisive element. African medicinal understanding, which has originated from the continent’s enormous cultural and traditional heritage should be further mobilized, mutualized, pan-Africanized, in association with medicine and modern research, as has been successfully done in some countries such as China. Local creativity and ingenuity should be stimulated, and the handicrafts offer should be enhanced, following the example of the new hygienic moisturizing equipment proposed in many countries (ex. Ghana, Cameroon, et al.)
    • Africa must learn from its experience and from other parts of the world affected by the pandemic, and should further promote solidarity it possesses, mass awareness, especially in rural areas, and mass testing of populations. Early examples of success stories show that it is not necessarily the abundant resources of countries with very high GDPs that provide the best health results. Vietnam, for example, has donated 550 000 masks to five European Union countries, and even Cuba has exported its emergency medicine to so-called developed countries. Coronavirus could mark a sort of ‘end of history’ and the development of alternative models. It is up to Africa to invent its own.  Our continent has extensive resources, a flexible and creative creative workforce, and professionals trained to resist and defeat the pandemic. This would require making the right decisions and adjusting them as necessary. The existence of a new consciousness linking the continent to its diasporas, its new networks of intellectuals, professionals, researchers, activists, associations, politicians, and independents, should be able to bring new and disruptive voices to these debates.
    • In the medium term, the main lesson of the COVID-19 crisis should be that Africa will continue to be all the more vulnerable to exogenous shocks if it does not find a structural response to its development challenges. This is as valid for health as it is for any other area. Indeed, health dependency remains a thorny problem and the cost of medical evacuations of elites is a case of social injustice and economic irrationality, since many of these services can be provided in Africa at lower cost. The perpetuation of a cash economy model, based on the export of unprocessed raw materials while waiting for volatile external revenues, is suicidal.  The urgent tasks for Africa are the local production of quality health services, the local processing of raw materials to create value and employment, and productive base diversification.

    “Reactivate Afro-pessimism”

    While COVID-19 brings economies to a standstill and disrupts the functioning of societies, it is paradoxically time for Africa to overcome its challenges and find a new place in the world. Of course, the challenge we are facing is major because, in addition to our sluggish economies, the coronavirus pandemic has given some Western treasuries the opportunity to reactivate an Afro-pessimism that was thought to be from another age.

    In some scenarios, Africa is a vulnerable continent, where the dead could be counted not in thousands but in millions of people.  We must affirm that this scenario is not an inevitability from which the continent cannot escape. It speaks more about its authors than about the reality in Africa, where the future cannot be pre-empted and assumed to bleak in principle.

    It is time to remember that periods of world upheaval have always brought about a paradigmatic, cultural and sometimes civilizational renewal for those who embrace the demands of change. We must therefore face up to the challenges that lie ahead and resolutely engage in the necessary struggles.

    Time for enlightenment

    We call upon on all African intellectuals, researchers from all disciplines and the dynamic forces of our countries to join the fight against the COVID-19 pandemic, to enlighten us with their thoughts and talents, to enrich us with the fruits of their research and with their constructive proposals. We must set an optimistic course, while being courageously aware of the gaps that need to be filled.

    Another Africa is possible as is another humanity in which compassion, empathy, equity and solidarity would define societies. What might have seemed like a utopia has now entered the realm of the possible. History is watching us and will condemn us if we allow ourselves to conjugate our future in the past tense.

    Let us dare to remain confident in the future or in ourselves. Let us dare to fight together against the spread of COVID-19, let us dare to defeat together the global precariat created by the eponymous pandemic.

    Yes, Africa will defeat the coronavirus and will not collapse.

    This piece was co-signed by: Kako Nubukpo, Alioune Sall, Reckya Madougou, Martial Ze Belinga,  Felwine Sarr, Carlos Lopes, Cristina Duarte, Achille Mbembe, Francis Akindès, Aminata Dramane Traore, Souleymane Bachir Diagne, Lionel Zinsou, Nadia Yala Kisukidi, Demba Moussa Dembélé, Franck Hermann Ekra, Alinah Segobye, Mamadou Koulibaly, Karim El Aynaoui, Mamadou Diouf, Hakim Ben Hammouda, Paulo Gomes, Carlos Cardoso, Gilles Yabi, Adebayo Olukoshi, Augustin Holl, Abdoulaye Bathily, Cheryl Hendricks, Lala Aicha Ben Barka,  El Hadj Kassé, Taoufik Ben Abdallah, Frédéric Grah Mel, Didier Acouetey, Yousra Abourabi, Didier Awadi, Marguerite Abouet, Valsero, Smockey, Monza, Fadel Barro, Lassane Zohoré, Mehdi Alioua, Véronique Tadjo, Madani Tall, Willy Zekid, Khadja Nin, Qudus Onikeku, Folashade Souley, Teddy Mazina, Joseph Tonda, Tiken Jah Fakoly

  • [Op-Ed] An Op-Ed written for Africa Report: “For Africa’s sake, the West this time should be selfish," writes Professor Carlos Lopes.

    Coronavirus: for Africa’s sake, the West should be selfish this time

    By Professor Carlos Lopes, first published 14 April 2020 in The Africa Report.

    Virus Outbreak South Africa

    A man wearing face masks and gloves to protect against coronavirus, walks on the street at Alexandra township in Johannesburg, South Africa, Saturday, April 4, 2020. (AP Photo/Themba Hadebe)

    The COVID-19 pandemic cannot be classified as a surprise. Several studies, intelligence reports and epidemiologic knowledge all predicted some infectious disease caused by severe acute respiratory syndrome would likely spread around the world.

    The recent warnings of coronavirus type of infections had been limited in geographical range to circumscribed regions, but strong enough to justify world preparedness. As we know better now, these alerts did not produce serious vigilance or readiness.

    “Herd mentality did the rest”

    Unsurprisingly the economic actors acted in panic as the full extent of the current outbreak unfolded. Herd mentality did the rest. We are now in the middle of a discussion on whether the world will face a recession or a depression. The former defined as a slowdown of economic activity whereas the latter is associated with a long-term downturn of the same.

    We shall know soon. But in the meantime, we can predict that African countries will most likely find themselves in the depression category unless some major effort is made to rescue their precarious economies.

    In all honesty we cannot blame the Africans this time.

    Potential damage of COVID-19

    Before COVID-19, the IMF economic growth forecast for the continent this year was 3.2%, with 16 African countries amongst the 30 best performing in the world, and more than half of the population in the continent living in countries with 5% economic growth or more.

    The naysayers will point to the myriad of problems the African continent has not been able to address, and they are right. Inequality, unemployment, lack of proper safety nets and slow structural transformation progress are sizable challenges, not fake news.

    But we are forced to admit the positive changes taking place in many fronts are notable; allowing Africa to post in the last two decades some of its best socio-economic indicators since independence.

    In just a few weeks all the above seemed like history. The competition is now to size the amount of damage COVID-19 will cause. McKinsey predicts a loss in the continent between $90 and $200bn this year; the World Bank estimates an economic contraction between 2.6% and 7% while the African Union predicts a more modest drop of 1.1% from earlier growth projections, if the crisis lasts a few months.

    Scarier global forecasts such as the ILO are projecting 200 million jobs at risk; UNCTAD estimating a 40% foreign direct investment contraction, the WTO is worried about a fall between 13% and 32% of world trade. With the IMF talk of serious recession already upon us, let our imagination worry about the size these impacts will have across Africa.

    “A perfect storm is brewing”

    African leaders have been swift in taking measures to flatten the virus infections’ curve, such as curfews or more stringent confinement rules; imitating similar measures taken by more powerful economies. The difference is that rich countries can attenuate the damaging economic costs of social distancing with compensatory packages that protect employment and social safety nets. Such measures drag economies into a halt. This is hard to follow for most African countries.

    There is a dramatic return to Keynesian policies by those who once kept at arm’s length what they considered a sin: to consider public services as public goods that are to be properly funded.

    Additional health-related costs necessary to combat the pandemic are punitive for African economies to face at the time of shrinking fiscal space. With 22% of revenues being used to service sovereign debt, local currencies are losing up to 30% of their exchange rate value, evaporating income from depressed commodity prices and a stoppage of global value chains. Indeed a perfect storm is brewing, and it’s one that’s risks evaporating the immense reform efforts of the last two decades.

    It is reassuring though, to realize that COVID-19 has democratized this crisis. African dilemmas and difficulties may be one gamut higher than rest, but it seems that the world is in this together. Flattening the curve only serves to give respite to overwhelmed health facilities and personnel, falling short of eliminating the threat. The virus can come back in a second or third wave.

    The power of the virus

    Since we cannot quarantine inequality, the virus can viciously take shelter amongst the less protected in order to strike again when convenient. After all only health conditions everywhere protect more anywhere.

    The COVID-19 virus has demonstrated that we can do many things that seemed impossible. In just a few weeks it has managed to suspend essential activities and production lines all over the world. An economic system which we were told was impossible to slow down or redirect just seized. To the ecological arguments on the change of richer countries and elites’ lifestyles, we always opposed the argument of the rules of the markets, even their exuberance. Yet the world reversed gears fast this time.

    We are now allowed to think it is possible to contemplate a different set of rules and norms. There is a dramatic return to Keynesian policies by those who once kept at arm’s length what they considered a sin: to consider public services as public goods that are to be properly funded. Treating them as investments instead of as liabilities though the promotion of a fiscal system brutally more progressive, capable of catering for what we all require rather than playing with what we all need.  There is recognition that the key role of the state is back.

    Changing roles of states

    The best examples of structural transformation taking shape in Africa were inspired by the developmental state model that has successfully achieved both economic growth and historical poverty reduction and social transformation across South East Asia and in China.

    The role states are already playing and will continue to play in OECD countries – with historical stimulus packages, historical debt to GDP ratios, historical social spending and historical domestic consumer lending – will hopefully curtail any criticism of what Africans were trying themselves to do, albeit in a more modest way and with limited resources.

    The new economic policy debate playing field can makes us believe it should be possible to calmly address divergent views about the preferred trajectory for Africa’s structural transformation.

    The realization that it is time for a fresher look is, nevertheless, extremely urgent.

    Seize the moment

    The pandemic drama may allow a more creative way of addressing Africa’s many challenges. This moment – propped with benign support from the continent’s traditional partners – should be seized. Debt relief, investment drives or food security and humanitarian and health response are welcome, but remain in the short term.

    There is a need for an overhaul of Africa’s policy space as well. It has become more evident  that it is in the best interest of Africa’s western partners to be more generous, more open-minded and less cynical.

    The world will be a better place if it is not threatened by a virus that certainly loves the poverty that is prevalent in many parts of Africa; poverty that will shield it. And if we deal parsimoniously with the current threat, it is just a matter of time before another pandemic may surface.

    For selfish reasons – if not for other reasons- the West should not allow that to happen. The costs are too high.

  • Europe and African relations post COVID-19: time to add size, scale and speed, 31 March 2020.

    Europe and African relations post COVID-19: time to add size, scale and speed

    By Professor Carlos Lopes

    First published in The Conversation, 31 March 2020.

    It’s time the EU turned its rhetoric about Africa into more tangible action. epa

    Since 2000, European and African leaders have been talking about giving the partnership between the two continents a “new strategic” dimension. In 2007, they reiterated their ambition to come together

    in awareness of the lessons and experiences of the past, but also in the certainty that our common future requires an audacious approach.

    Why then, despite such good intentions, have they fallen so far behind?

    The financial crisis of 2008, protracted Brexit negotiations, the EU’s fragmented approach in its engagement with Africa and the reluctance in certain quarters to recognise the leadership role of the African Union have all exacted a toll. And now there’s the coronavirus cyclone.

    A new partnership is important for Africa and Europe alike. The entry into force of the African Continental Free Trade Area, the world’s largest free-trade area by number of countries, can provide investment opportunities for European business.

    But Europe needs to realise that 2020 is bringing a new reality. It is no longer possible to do business as usual after COVID-19. The time is ripe to put an end to dialogue fatigue and cynicism about new unilateral European initiatives, each one announced with pomp and circumstance.

    Instead, EU-Africa relations should be guided by an instrument that frames the continent-to-continent partnership clearly, with joint governance and agreed goals and targets. Serious negotiations should take place when COVID-19 offers a respite.

    Opportunities and dangers

    The EU likes to emphasise that it is Africa’s largest trading and investment partner and its top aid provider, but that position is declining fast.

    Nor is it a one-way street. Africa is Europe’s third-largest trading partner, after the US and China, but ahead of either Japan or India. Africa’s youthful population can be a problem but also a unique opportunity given Europe’s aging population.

    There are dangers too. The spread of conflicts in the Sahel, reinforcement of terrorist networks and human trafficking in Africa signal growing threats that both continents need to address.

    Climate action is a priority and an area made for multilateral cooperation. As we know better now, health conditions everywhere protect more anywhere.

    Fortunately, there is a renewed sense of urgency from the EU. The administration of Ursula Von der Leyen, president of the European commission, has prioritised relations with Africa. She recently visited Addis Ababa, seat of the AU, accompanied by 22 European commissioners, the largest such a delegation ever. And an EU African strategy was announced this month. The AU is formulating its own strategy towards Europe too.

    The periphery post COVID-19

    The world faces its worst economic contraction since the Great Depression. Trillions of dollars in stimulus packages will certainly revive the central economies. But the peripherical ones will face a different scale of challenges.

    The geostrategic dynamics, particularly the increased international interest in the continent that was demonstrated – not only by China, but from the Gulf States and the likes of India, UAE, Russia and Turkey – are bound to be deeply affected by the coronavirus crisis. In this context, African countries are openly speaking of the need to give substance to the partnership with Europe and for it to show “deliverables”, turning the rhetoric heard since 2000 into more tangible action.

    To be fair, many voices in Europe say the same.

    Giving substance means moving beyond the tendency of listing the areas of cooperation around which the continents can cooperate, the usual shopping list approach. In fact, EU-AU common priorities are straightforward. Cooperation around issues such as peace and security, trade and investment, climate change, human mobility or education are key and have been given significant European resources in the past. What was often controversial were the approaches to tackle them. We can now add size, scale and speed to the debate.

    Stimulus packages in central economies will certainly provoke higher risk for the countries that cannot afford the same. With depressed prices for most of its major commodities and shrinking demand resulting from a production halt, Africa will be facing a perfect storm. Its internal demand will contract, its informal sector collapse, most major players looking for scarce bridge financing and governments struggling with a $44 billion debt servicing in 2020, while facing the most adverse fiscal environment of the last 20 years.

    This is the time Europe’s new approach towards Africa can show its teeth. The solidarity required to combat a pandemic seems obvious to scientists and most pundits. But it has been challenged even inside the EU. Will the space to look even beyond the European borders be there to comfort the strategic southern neighbour?

    Most agreements engaging the EU with various configurations of African countries and the African Union expire this year. Another reminder it is time to turn the page. These are all signs of changing winds. The time for talk is over.

  • [Q&A] What Could the Economic Impact of COVID-19 be on Africa?
    9 April 2020

    What Could the Economic Impact of COVID-19 be on Africa?
    Professor Carlos Lopes examines key issues such as debt relief, additional financing, and how Africa's partners can help.

    Watch the full interview here. 

  • [Watch] Professor Carlos Lopes interview in the Africa Focus, BBC World TV.

    Professor Carlos Lopes interview in the Africa Focus, BBC World TV.

    Watch full interview. 

  • [Listen] Coronavirus: Is Africa ready?
    10 April 2020 

    Coronavirus: Is Africa ready?


    How will weak health systems and fragile economies cope with an outbreak?

    Listen to the full BBC segment. 

  • É fundamental o perdão da dívida dos países menos avançados, Publico, 4 May 2020. 

    Carlos Lopes: “É fundamental o perdão da dívida para os países menos avançados”

    Carlos Lopes, antigo director da Comissão Económica da ONU para África, está pessimista sobre o impacto económico da covid-19 e considera que Cabo Verde será um dos países mais afectados. África precisa de um estímulo de pelo menos 5% do seu PIB.

    Read the full article here.

  • [Watch] COVID-19: The Economics of the Pandemic in Africa with Professor Carlos Lopes speaks on Moneyline with Nancy TV, 14 April 2020.  

    COVID-19: The Economics of the Pandemic in Africa with Professor Carlos Lopes speaks on Moneyline with Nancy TV. 

    Watch the full interview.

     

  • [Interview] Africa stands up to foreign debt, El Pais, 5 May 2020.

    Africa stands up to foreign debt

    African leaders create a common front to demand cancellation of payments and to cope with the coronavirus

    By JOSÉ NARANJO for EL PAIS, 4 May 2020

    A family takes away basic necessities during the food distribution launched by the Senegalese government last Tuesday in Dakar.

    A family takes away basic necessities during the food distribution launched by the Senegalese government last Tuesday in Dakar. SYLVAIN CHERKAOUI / AP

    The coronavirus crisis has caused African states to allocate more resources than ever to their weakened health systems and to compensate for the damage of the economic slowdown in their population. But if they dedicate between 15% and 30% of their meager budgets to pay the high interest on their external debt , how do they do it? The solution seems easy, invest in the first and forget about the second. However, it is not. The international organizationsand some countries have already made a move and announce reductions and postponements, but African leaders want more. For the first time in history, Africa demands, plain and simple, the cancellation of an external debt that without coronavirus was already worrying and that now, with the economic crisis just around the corner, has become a heavy slab.

    The covid-19 also hits the African continent, albeit at different speeds. With about 45,000 cases and 1,800 deaths, four countries, South Africa, Egypt, Morocco and Algeria, concentrate half of the positives. However, the worrying upward trend in Nigeria, Cameroon, Ghana, Ivory Coast, Guinea or Senegal indicates strong community transmission that the figures only show in part given the limited ability to test. The rapid reaction to border closures and the adoption of measures, and its population pyramid, with 50% of those under the age of 20, have allowed African health systems, the weakest in the world, to save time. But experts agree that the worst is yet to come.

    Read the full article here. 

  • [Interview] Professor Carlos Lopes in “Say More”, Project Syndicate, 10 May 2020. 

    Professor Carlos Lopes says more. 

    May 12, 2020

    This week, Project Syndicate catches up with Carlos Lopes, a professor at the Nelson Mandela School of Public Governance at the University of Cape Town, High Representative of the African Union for partnerships with Europe, and a member of the Global Commission on the Economy and Climate.

    Project Syndicate: In February, you praised African governments for their efforts to shift away from coal, but argued that more must be done. The continent’s governments, you wrote, “should strengthen strategies and policies aimed at encouraging the transition to a new climate economy and increasing investment in clean energy.” Where should policymakers start?

    Carlos Lopes: Shifting away from coal (and fossil fuels in general) is a way of safeguarding the future, not only from an environmental perspective, but also from an economic one. Today’s historically low oil prices – prices were even negative for May futures – should be a wake-up call for Africa’s fossil-fuel producers, such as Algeria, Angola, and Nigeria.

    Further investment will only make these countries more dependent on oil – and thus more vulnerable to oil-price volatility. Add to that the fact that 42% of coal-fired power plants worldwide are losing money under normal circumstances, and it could not be more obvious that a prosperous future for Africa does not lie in fossil fuels.

    The private sector increasingly recognizes the financial risks implied by continued dependence on fossil fuels: private finance has been shifting away from coal in recent years, and has also begun shifting away from oil and gas investments. They know that prices will not simply bounce back.

    Read the full interview here. 

  • África, ante una "crisis económica sin precedentes" y una oportunidad única, El Diario, 15 May 2020. 

    Africa, facing an "unprecedented economic crisis" and a unique opportunity

    'Africa,

    Africa, facing an "unprecedented economic crisis" and a unique opportunity. EFE

    The economic forecasts for Africa due to COVID-19 are not at all rosy: the World Bank (WB) and the International Monetary Fund (IMF) predict recession and an unprecedented crisis.

    Predictions that, in the eyes of several African economists, fall short, but that put the continent before a unique opportunity to stand up to the debt and policies imposed for years by these multilateral organizations.

    Read the full article here.

  • [Interview] Africa should have "special right" to print money like other continents, Deutsche Welle, 11 May 2020. 

  • COVID-19 provides Africa with an opportunity to rethink the role of the state in economic policy, ACCORD, 15 May 2020. 

    COVID-19 provides Africa with an opportunity to rethink the role of the state in economic policy

    COVID-19 In-depth Analysis by Professor Carlos Lopes, published in ACCORD, 15 May 2020.  

    The corona virus has demonstrated that we can do many things that seemed impossible before. We are now allowed to think it is possible to contemplate a different set of rules and norms. There is a dramatic return to Keynesian policies by those who once kept at arm’s length what they considered a sin: to recognize public services as public goods that are to be properly funded. Treating them as investments in social capital instead of as liabilities. There is now a recognition that the key role of the state is back.

    EMMANUEL CROSET/AFP via Getty Images

    EMMANUEL CROSET/AFP via Getty Images

    Potential damage of COVID-19

    Before COVID-19, the IMF economic growth forecast for the continent this year was 3.2%, with 16 African countries amongst the 30 best performing in the world, and more than half of the population in the continent living in countries with 5% economic growth or more.

    The naysayers will point to the myriad of problems the African continent has not been able to address, and they are right. Inequality, unemployment, lack of proper safety nets and slow structural transformation progress are sizable challenges, not fake news.

    But we are forced to admit the positive changes taking place in many fronts are notable; allowing Africa to post in the last two decades some of its best socio-economic indicators since independence.

    Our COVID-19 policies should recognize public services as public goods that need to be properly funded. They are investments in social capital, not liabilities.

    In just a few weeks all the above seemed like history. The competition is now to size the amount of damage COVID-19 will cause. McKinsey predicts a loss in the continent between $90 and $200bn this year; the World Bank estimates an economic contraction between 2.6% and 7% while the African Union predicts a more modest drop of 1.1% from earlier growth projections, if the crisis lasts a few months.

    Scarier global forecasts such as the ILO are projecting 200 million jobs at risk; UNCTAD estimating a 40% foreign direct investment contraction, the WTO is worried about a fall between 13% and 32% of world trade. With the IMF talk of serious recession already upon us, let our imagination worry about the size these impacts will have across Africa.

    “A perfect storm is brewing”

    African leaders have been swift in taking measures to flatten the virus infections’ curve, such as curfews or more stringent confinement rules; imitating similar measures taken by more powerful economies. The difference is that rich countries can attenuate the damaging economic costs of social distancing with compensatory packages that protect employment and social safety nets. Such measures drag economies into a halt. This is hard to follow for most African countries.

    Additional health-related costs necessary to combat the pandemic are punitive for African economies to face at the time of shrinking fiscal space. With 22% of revenues being used to service sovereign debt, local currencies are losing up to 30% of their exchange rate value, evaporating income from depressed commodity prices and a stoppage of global value chains. Indeed a perfect storm is brewing, and it’s one that’s risks evaporating the immense reform efforts of the last two decades.

    It is reassuring though, to realize that COVID-19 has democratized this crisis.African dilemmas and difficulties may be one gamut higher than rest, but it seems that the world is in this together. Flattening the curve only serves to give respite to overwhelmed health facilities and personnel, falling short of eliminating the threat. The virus can come back in a second or third wave. Since we cannot quarantine inequality, the virus can viciously take shelter amongst the less protected in order to strike again when convenient. 

    Changing roles of states

    The best examples of structural transformation taking shape in Africa were inspired by the developmental state model that has successfully achieved both economic growth and historical poverty reduction and social transformation across South East Asia and in China.

    The role states are already playing and will continue to play in OECD countries – with historical stimulus packages, historical debt to GDP ratios, historical social spending and historical domestic consumer lending – will hopefully curtail any criticism of what Africans were trying themselves to do, albeit in a more modest way and with limited resources.

    In just a few weeks COVID-19 has managed to suspend essential activities and production lines all over the world. An economic system which we were told was impossible to slow down or redirect just seized. To the ecological arguments on the change of richer countries and elites’ lifestyles, we always opposed the argument of the rules of the markets, even their exuberance. Yet the world reversed gears fast this time.

    The new economic policy debate playing field can makes us believe it should be possible to calmly address divergent views about the preferred trajectory for Africa’s structural transformation.

    Dr. Carlos Lopes is a Professor at the Mandela School of Public Governance at the University of Cape Town and Visiting Professor at Sciences Po, Paris. He is currently also the African Union High Representative for Partnerships with Europe. 

    The is an abridged version of an article that was published in The Africa Report on 14 April 2020.

  • [Newsletter] Experts on the economic effects of COVID-19 on the African continent, Global Perspectives International, 20 May 2020. 

    Newsletter Global Perspectives Initiative: Experts on the economic effects of COVID-19 on the African continent

    Prof. Carlos Lopes: "The majority of African countries are in a situation of extreme vulnerability"

    Prof. Carlos Lopes is currently High Representative of the Commission of the African Union for Partnerships with Europe. Previously, he also held the position of Executive Secretary of the United Nations Economic Commission for Africa (UNECA).

    GPI has talked to him about the numerous challenges the African continent is facing that are exacerbated by the COVID-19 pandemic. Special regard is given to the fiscal and economic situation as well as how this crisis can also create opportunities for further development.

    Read the full newsletter here. 

     

  • [Op-Ed] How a Covid-19 recovery could lead to a more resilient Africa, first published by The Telegraph, 20 May 2020. 

    How a Covid-19 recovery could lead to a more resilient Africa

    By Professor Carlos Lopes, First published by The Telegraph, 20 May 2020. 

    With help, Africa can revitalise its economy under a new and resilient green framework

    African woman

    Devastating blow: but Africa can rebuild after Covid-19 and emerge more resilient CREDIT: GETTY

    There is no getting around it: the Covid-19 crisis will hit Africa’s people particularly hard. Even if the infection rate remains low, the socioeconomic devastation is already being felt. Access to clean water supply and basic health services remain a challenge throughout the continent, making the containment measures taken by most countries all the more challenging.

    Beyond the immediate health concerns, the pandemic is triggering a global economic slowdown, which will severely hamper Africa’s development ambitions and curtail a successful two decades of macroeconomic improvements and social gains.

    The continent is already working to bring 400 million people out of poverty and 200 million out of hunger. The financial downturn will delay this. Early estimates suggest that Africa is likely to face at least $500 billion in economic costs this year as a result of the coronavirus.

    Covid-19 may have parked the discussion about the urgency of the climate crisis. That would be absurd, given that Africa is facing several climate-related threats simultaneously: drought, such as the devastating one in the Sahel coming on top of the perennial environmental stress that ignites armed conflicts in the region; an invasion of locusts in the Horn of Africa; and storms – more than 3 million people were severely affected by last year's Cyclone Idai, which destroyed as much as half of Mozambique’s annual crop along with critical infrastructure.

    By 2050, climate change could force more than 86 million people to move across countries in sub-Saharan Africa

    By 2050, climate change could force more than 86 million people to move across countries in sub-Saharan Africa. Reducing vulnerability by building climate resilience was already critical, but it is even more essential now.

    Africa’s response to the Covid-19 crisis should, and could, be used as an opportunity to build resilience to future economic shocks. This cannot be achieved by continuing to rely on fossil fuel markets. Historically low (or even negative) oil prices show that further investment will only  lock countries into economies vulnerable to volatile fuel costs. Alarm bells are likely to ring for a while in Angola, Nigeria, Algeria and other oil-dependent countries.

    Private finance has been shifting away from coal over past years and, more recently, from oil and gas investments, in recognition of the financial risks they entail. Given that 42pc of coal-fired power plants worldwide are losing money – even under normal circumstances – a prosperous future for Africa clearly does not lie in fossil fuels. It is telling that prices fell, and demand and new investments evaporated, the moment the Covid-19 outbreak was declared to be a pandemic.

    Fortunately, low-carbon solutions are often cheaper over their lifetimes and are more available than ever before. They also bring a huge investment opportunity: of the $13.3 trillion investment projected for new power generation by 2050, an estimated 77pc will go to renewables. Moreover, reducing fossil fuel production can avoid deadly air pollution, which has increased by 36pc since 1990 in Africa, killing about 250,000 people in 2013.

    Person washing hands

    Helping hands: the World Bank is rolling out a $14 billion fast-track package for developing countries but will it be enough? CREDIT: GETTY

    This is the moment for African leaders to drive national development in ways that leapfrog old development pathways and set in motion an African-owned growth model that is sustainable, inclusive and resilient. This should include shedding fuel subsidies and the opportunistic use of oil consumption for complex tax regimes.

    But Africa needs support in meeting this goal. Its nations lack the financial capacity that developed economies have to implement large stimulus packages. Many countries in Africa, and the developing world, rely heavily on foreign income to support their economies. Yet the pandemic explicitly threatens the export and tourism markets, investments and remittances from nationals working abroad that are so essential to the economy.

    Considering the continent's heavy debt service burden – about $44 billion in interest payments in 2020 – there is a need to raise levels of stimulus equivalent to those being mobilised in large economies. Indeed, I believe that the West's bazooka approach to printing money calls for the IMF to make available its Special Drawing Rights to mobilise no less than $200 billion for the continent.

    Developed nations have a responsibility to answer this call. The World Bank is already rolling out a $14 billion fast-track package to strengthen the Covid-19 response in developing countries. The G20 finance ministers have agreed to suspend debt service payments for the world’s poorest countries.

    Yet so far these initiatives are modest and way below what is needed. Exceptional circumstances require special arrangements and a different scale of ambition. And why not make economic support consistent with resilient, climate-smart growth?

    Investments made now will have long-lasting impacts and thus must be chosen carefully. The post-Covid-19 world offers Africa an important opportunity to revitalise its economy under a green framework that supports a healthy and prosperous people while safeguarding the global commons.

    The world must come together like never before to fight a common, invisible enemy

    Bringing the Covid-19 pandemic to an end is not a question of if but when – though it may take time. But even as the world recovers, Africa will still face glaring development and climate-related hardships. Now is a time of reckoning, for rich economies to realise that we are in this together.

    How our lives, communities and societies will change in the aftermath of Covid-19 is still unclear. What has become clear, however, is that there is an inherent unity in our humanity: the world must come together like never before to fight a common, invisible enemy. This, in turn, holds the potential for us to rebuild better, creating a more resilient, sustainable and inclusive future for everyone.

    Prof Carlos Lopes is former executive secretary of the UN Economic Commission for Africa and a member of the Global Commission on the Economy and Climate

    For more information, visit thegef.org

  • Can a virus accelerate change in Africa, first published by the The New School, New York, 18 May 2020. 

    Can a Virus Accelerate Change in Africa?

    By Professor Carlos Lopes, first published, The New School, 18 May 2020.

    African intellectuals are calling for a different discussion. Isn’t this the right time to propel changes that have often been postponed?

    Confinements, lockdowns, social distancing, masks, and protective equipment have all become part of the new vocabulary used in Africa. This may be no different from other parts of the world. But the implications of COVID-19 can be far-reaching for the continent with some of the lowest human development indicators in the globe. African countries have been fast in adopting stringent measures to contain the potential COVID-19 infection surge. They adhered in their great majority to the principle of flattening the infection curve, in order to allow the sanitary authorities’ response to be able to cope with the pressure on existing capabilities. Although the total infection rate and lethality in Africa are far lower than the ones experienced so far in China, Europe or the US, the case can be made that the capabilities of African countries, both in medical personnel and equipment, are extremely limited, suggesting a possibly greater devastating impact of the pandemic outbreak in the continent if a surge happens.

    Read the full article here. 

  • [Q&A) Carlos Lopes: Africa must revise its priorities in the face of Covid-19

    Carlos Lopes: Africa must revise its priorities in the face of Covid-19

    Published in the New African, 22 April 2020.

    In a wide-ranging interview with Hichem Ben Yaïche and Guillaume Weil-Raynal, the former Executive Secretary of the UN Economic Commission for Africa shares his analysis of the coronavirus crisis and what the continent must do to emerge from it successfully.

    How do you feel in the face of this pandemic that is shaking the world?

    We have to take as our reference the Great Depression of 1929 and everything that happened during that period. The collective memory has forgotten that this depression followed a great pandemic – the Spanish flu or influenza. This comparison with the current situation makes me think that the effects on the economy will be of a comparable magnitude. People have also forgotten that the world was very different before and after that great depression. Regarding what is going to happen, we are in a situation of expectation and of ignorance.

    Read the full interview here. 

 
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