BLOG SERIES: What can Africa do to reinvigorate its economic activity?
It started as a very promising year for Africa. Having officially inaugurated a landmark continental agreement, the African Continental Free Trade Agreement (AfCFTA, in July 2019, following a record time for its ratification, and having selected Ghana to host the Secretariat of the African AfCFTA, expectations were high for a successful start of intra-African trading in July 2020, accelerating regional integration and economic development for the continent of 1.3 billion people, with its estimated GDP of $2.5 trillion.
All was set in Accra to welcome the newly-elected and first Secretary General of the AfCFTA, the South African Wamkele Mene, with his official inauguration set for 31 March (AU 2020).
New railway tracks, airports, seaports and major infrastructure projects were progressing all over the continent, with a GDP growth of 2.4% for Sub-Saharan Africa in 2019 (IMF 2019).
Even as the dark clouds were gathering over Wuhan in China since October, very few people have predicted the global storm that was about to hit the world and turn all the socio-economic predictions upside down. As the Novel Coronavirus (Covid-19) unraveled into a global pandemic (WHO 2020), infecting hundreds of thousands of people and killing tens of thousands throughout the world, economies were shut down, borders were closed and the movement of people became severely limited in many countries across the word, ranging from curfews to full lockdowns.
Table 1: Border Status in West Africa on the Movement of People (compiled by author)
This reduction in economic activity, now projected between -2.1% and -5.1% for Sub-Saharan Africa (IMF 2020), coupled with the restriction in the movement of goods and people, has led to major disruptions in supply chains, while priority shifted towards local manufacturing of personal protective equipment and importation of medical supplies. Although airports and seaports remained open across Africa for cargo, many have seen a dwindled throughput, as a direct result of the drop in production from China or the reduction in consumption from Europe and the United States. Most significantly, the commencement of trade under the AfCFTA seems to be postponed by six months, up to January 2021, in order to allow countries to prioritize management of the pandemic outbreak.
So, where does this leave the Continent, and what can Africa do to reinvigorate its economic activity?
To start with, frontline workers at the points of entry (seaports and airports) and border crossings must prioritize the safety of economic operators, pilots and seafarers who are transiting through their facilities, by providing them with one-stop information points about the state of Covid-19 in the countries they are visiting, as well as ensuring that theses frontline workers are regularly tested and that they are provided with a sanitized work environment. Seaport and airport authorities must also liaise with revenue authorities and immigration services, to ensure that medical supplies and protective personal equipment are expedited through the customs procedures.
As seaports and airports are usually considered as economic gateways in and out of their respective countries, it is time for these organizations to reconsider their involvement in the global value chains, by integrating their services with those of the special economic zones within their jurisdictions, for example, or investing and/or facilitating the creation of storage and distribution facilities that extend the shelf life of exportable products in their respective countries, such as perishables, high value agriculture produce and food products.
Covid-19 is a long-term threat to economic stability, especially to food and agriculture supply chains, as well as the transport and logistics industry. It is only by adapting to the new reality that countries will manage to rebound stronger from this global crisis.
Ziad M. Hamoui
National President – Ghana
Borderless Alliance
