It is hard to predict the unpredictable, especially when it is unknown. However, that is what the leaders of all countries must try to do at this time. The disease caused by the coronavirus, or COVID-19, only appeared at the very end of 2019, however its incidence is already higher than that of the previous recent epidemics like SARS and Ebola, etc. The geographical spreading of the virus, the lack of knowledge about it, and the absence of a cure are generating a fear which has turned into a panic about the risk of a global pandemic. Exceptional measures to slow the spread of the disease have now been adopted, in disorder, by many nations, but their impact cannot yet be known. This potentially dramatic health risk is now compounded by a brutal and multifaceted economic and financial crisis, linked to the difficulties in economic sectors paralyzed by actions to combat the epidemic, such as air transport, tourism, and events. It has also resulted in fears for the growth rate linked to the expected supply difficulties in many industries, the containment measures caused by the health situation, and a drop in demand. The generalization of these problems, together with the collapse of the oil price, caused, in a week, a stock market fall of the same magnitude as in 2007.
If this double crisis is global, Africa seems to have a special place in it, both in terms of health and economy.
In terms of health, three observations can be made. Firstly, the continent remains strangely absent, so far, from the COVID-19 map. On 15 March 2020, official statistics showed only 280 cases and 7 deaths in Africa, and a total absence of contamination in the majority of the 54 African countries.
The similarity of COVID-19 symptoms to those of common diseases such as influenza and malaria, which remains by far the most deadly disease in Africa, combine to keep the coronavirus under many “radars”.
This situation, which is for once very favorable, seems incredible when China, where the disease broke out, has a contingent of nationals in many countries in Africa, and many Africans often travel to China for commercial reasons: and so there could be multiple contamination gateways. No scientific explanation has yet been put forward to justify the fact that the climate, the environment, or the morphology of the inhabitants make it more difficult for the coronavirus to act in Africa than in countries as diverse as Italy, Korea, or the United States. The most likely reason for this, therefore, is the reduced detection of infected people, which may result from several causes. The generalized weakness of health facilities (only 24 African countries have the means of screening for COVID-19 according to the World Health Organisation (WHO)), the similarity of COVID-19 symptoms to those of common diseases such as influenza and malaria, which remains by far the most deadly disease in Africa, combine to keep the coronavirus under many “radars“. Its low mortality rate to date and the low percentage of populations over the age of 60 may also have contributed to the fact that the disease, if it is already present, has received little attention. The delay in issuing warnings and launching the first preventive measures also explains this difference. The only cases reported are, moreover, mainly those of people who came from France and were immediately quarantined, as if the virus had made this detour before attacking Africa.
Secondly, Africa seems at present ill-equipped to deal with the contamination rates similar to those which are appearing in the worst-hit countries such as Korea and Italy, not to mention China. The type of care required for patients most severely affected, sophisticated respiratory equipment in particular, is scarce and would quickly lead to the blockages currently feared in the most advanced European countries. Therefore, it is not certain that a more active screening policy would be better suited to the effective management of the epidemic. It might be preferable to focus, above all, on the adoption of behaviors and barrier measures to curb the spread, and on mass disinfection, which would be easier to implement once a relative standstill in a country is imposed.
Africa, despite its many weaknesses, has already been able to cope with particularly dangerous epidemics.
Thirdly, Africa, despite its many weaknesses, has already been able to cope with particularly dangerous epidemics. That was the case for Ebola in the years 2013/2015, particularly in West Africa. With more than 11,000 registered deaths over the period (but nearly 20,000 according to some statistics) out of some 30,000 people infected, Ebola represented a terrifying threat to already fragile countries such as Guinea, Liberia, and Sierra Leone. Only a rigorous quarantine policy, the remarkable courage and tenacity of the medical teams in these countries, and the assistance, sometimes too late, of a few partners were able to overcome this scourge. There is no doubt that Africa would fight vigorously with its meagre resources if the coronavirus were to make a massive appearance in its population of more than 1.2 billion people. Africa would, in this case, for lack of better means, favor the means highlighted above, strict confinement, and systematic disinfection. If this is the case, it will be important that African governments take up the challenge with the transparency, commitment, and coherence that will make them credible. Besides, they will also need to take advantage of international solidarity, the current difficult implementation of which will be “tested” in other regions of the world because of the financial, human, and technical resources required.
In economic terms, the main question is whether Africa will be relatively spared, as in 2007, from the consequences of the economic and financial crisis which has been accompanying the current health threat since the beginning of March. While it is still too early for general conclusions on this point, several issues already seem to be arising.
Firstly, the sudden fall of more than 30% in world oil prices on 9 March, further aggravated since then, will have a strong impact on Africa. This fall, which is the result of a sharp drop in demand and a strategic disagreement between two key, Saudi Arabia and Russia, is likely to be observed for at least a few months, given the current uncertainties in the global economic situation.
The sudden fall of more than 30% in world oil prices on 9 March, further aggravated since then, will have a strong impact on Africa.
It will produce two opposite effects depending on the country. Countries who are exporters of oil, already in a depressed phase since 2015, will see a further significant fall in their exports and revenues. Nigeria, for example, which had based its 2020 budget on an international oil price close to USD 55, will have to revise its budget to take account of prices close to USD 30. Algeria is undertaking the same process. The value of the Naira has already seen a significant decline, accompanied by a fall of more than 12% on the Lagos Stock Exchange. For French-speaking Central Africa, the unexpected fall will make the reforms being undertaken more complicated and will jeopardize the improvements recently seen in economic growth and budgetary rebalancing. For oil-importing countries, on the contrary, the favorable position of recent years will be maintained. It will be a particularly timely factor in supporting growth and fiscal balance in the difficult period ahead.
Secondly, several major global negative effects of the epidemic would inevitably affect Africa or be rapidly observed. The general decline in activity will reduce demand for mining raw materials in the short term, with the possible exception of gold, whose prices increased by more than 20% in 2019 and remain high, thus affecting many nations at least in 2020. Air transport, hotels, and tourism, which used to be growth- and job-creating sectors, will be hit this year and could suffer in the future from changes in behavior, particularly on the part of companies.
A possible quarantine, at least partial, to which many African nations might resign themselves for health reasons, would disrupt national production, especially with teleworking being still only marginal, and international or regional trade: these two events will have a negative impact on the growth rate of Gross Domestic Product (GDP). The substantial destruction of global “financial wealth” resulting from the stock market crash, and the general climate of uncertainty will, for a time, sharply slow down the flow of Foreign Direct Investment (FDI), in particular private investment, and thus the implementation of new productive projects.
The rate of GDP growth in 2020 could well fall below the 3.9% forecast and even push large countries into recession.
Apart from these likely trends, most of the developments on the African continent so far remain assumptions that can only be verified in a few months’ time. Most of them are unfavorable and would lead Africa into a negative economic spiral in the short term. Swept along by the downturn in the important sectors mentioned above, the rate of GDP growth in 2020 could well fall below the 3.9% forecast and even push large countries such as Nigeria into recession. The initial forecasts issued in Europe appear catastrophic, with GDP decline rates reaching 5%. In this case, the result would be a decline in public revenue and increased financing difficulties for the States concerned. This would slow down the possibility of building economic and social infrastructures, which are nevertheless a priority.
However, despite these bleak prospects, African countries, because of their economic structures and low integration into world trade, should be less sensitive to changes in the international economic situation, as was observed in 2007/2008. In particular, they have a few strong sectors, for example telecommunications and banking, or sectors that are supported by high population growth, such as agriculture, or that are weakly linked to traditional channels, such as the informal sector.
Finally, it is also possible to hope that the great upheaval caused by COVID-19 could give African nations the energy they need to increase actions to develop their national and regional agricultural and industrial production capacities. This strategy would have the double merit of “boosting” African GDP at a particularly opportune time, and reducing the dependence of African populations on foreign countries.
This strategy would have the double merit of “boosting” African GDP at a particularly opportune time.
This will require an effort of imagination and willingness on the part of the countries concerned, but also effective and rapidly implemented financial support from major partners, which would testify to the consistency of their actions and their words in these difficult times.
Even if it is not yet aware of it, Africa risks experiencing a health and economic crisis resulting from the coronavirus epidemic as formidable as anywhere else in the world. To get through the crisis as well as possible the continent must show its ability to take urgent action, to fight its usual “demons,” and to mobilize its assets. The worst is never guaranteed, especially if you are well prepared to face it.