By John Ohiorhenuan
In the wake of the COVID-19 pandemic, African governments called on their multilateral and bilateral development partners, following the virtual meeting of Ministers of Finance on March 19. They appealed for $100bn in immediate financial assistance to help African countries address the safety net needs of their populations, feed out-of-school children and protect jobs. They called for additional resources of least $15bn to support Africa’s health systems. They requested a debt standstill package for two years for all African countries, and sought an increase in Special Drawing Rights Allocations to provide additional liquidity particularly for the procurement of basic commodities, food and fuel. In return, the leaders pledged to build and strengthen systems to fight corruption, and to enhance predictability, transparency and accountability of flows so finance ministers can plan effectively and civil society stakeholders can help track funds flows to ensure these reach those most in need expeditiously.
Subsequently, the African Union Chair, South African President Cyril Ramaphosa, appointed four eminent Africans (Ngozi Okonjo-Iweala, Donald Kaberuka, Tidjane Thiam and Trevor Manuel) as the African Union Special Envoys to lead the mobilisation of international support for Africa’s efforts to address the health and economic fallout of the pandemic. Three of these envoys were signatories to an April 9 op-ed in Project Syndicate that argued Africa’s urgent need for immediate support. Similarly, the recent World Bank’s Africa’s Pulse report (Spring 2020) has called for additional financial assistance from Africa’s bilateral and multilateral development partners, including a debt service stand still with official bilateral creditors.
The exceptional vulnerability of African countries is undeniable. For a majority of Africans, livelihoods remain very fragile. Sub-Saharan Africa has less than 15 per cent of the global population, yet it accounts for more than half of the number of people globally who below the poverty line of less than US$1.90 a day. More than one-third of employed workers in sub-Saharan Africa live in this condition of extreme poverty. Two-thirds of the world’s maternal deaths occur in sub-Saharan Africa. The proportion of people with access to safely managed sources of drinking water in sub-Saharan Africa is about 28 per cent. Thirty-four per cent of sub-Saharan Africans live in slums or informal settlements, accounting for almost one quarter of the global slum population. At the best of times, their situation is precarious.
Even these dreary numbers hide the depth of misery and the existential fragility of the poor and extremely poor African, and the feeling of hopelessness of millions of unemployed youth. Poverty and unemployment will increase with the COVID-19 crisis. This precarious situation, compounded by the pandemic, highlights the need for immediate attention in light of the greater health and food security imperatives brought on by the coronavirus.
The response of African leaders to the crisis is eminently sensible. Africa needs help. However, it is impossible to ignore an agonising sense of déjà vu. A decade ago, in the context of the global financial and economic crisis, the same sorts of calls were made on behalf of the continent.
In a submission to the April 2009 G20 Summit, African leaders described the measures they were taking to mitigate the impacts of the crisis. They were providing fiscal stimulus packages, revising budget expenditures to target key sectors, and strengthening banking regulation. They argued that Africa simply did not have the ability to preserve the foundations of its growth over the next few years. They estimated that the continent would require an additional $100bn in the next two years just to maintain pre-crisis levels of growth. Their plea, then as now, to the G20 leaders was to deliver on their previous commitments to increase aid to Africa and to unlock “new and additional resources”, then in light of global economic crisis, and now in light of the COVID-19 pandemic.
The deeper question here is how long can African leaders continue to ignore the structural roots of Africa’s perpetual crisis. Neither the fiscal and monetary policy measures taken in 2008-2009 to mitigate the impacts of the financial crisis, nor current emergency strengthening of Africa’s health systems and expanding safety nets, go to the root question of structural change and economic diversification. This crisis should focus African countries on the question of what must be done to avoid carrying a begging bowl each time there is an exogenous shock, or because of weak progress on the SDGs, which is true at the best of times. Let us begin with the low hanging fruits.
All African leaders are committed to the elimination of corruption. This crisis is the moment to intensify efforts to eliminate waste, theft and inefficiencies from governance and procurement systems and install anticorruption systems and mechanisms that may have been thwarted in the past by powerful interests.
This crisis should be an occasion to embrace the imperative of speedy implementation of the African Continental Free Trade Area strategy. Africans know that Africa is not one country. Africa is 55 sovereign states, but many are small economies in global terms, even recognising the three largest economies of Nigeria, South Africa and Angola. Harnessing economies of scale, and the scalability of new technologies, is an obvious policy imperative for our small economies. The pandemic highlights the urgency of local production of medical supplies and equipment and indeed the urgency of local resilience. The COVID-19 pandemic will not be the last global disease outbreak, or the only thing to disrupt global supply lines. The SDGs require local resilience.
The importance of a responding to this crisis at the level of production reforms merely tells us that we can longer avoid the vigorous management of Africa’s position in the international economic system. We must confront the fact that our problem lies in the absence of an organic link between our pattern of domestic resource use and our pattern of domestic demand.
Many Africans of my generation will recall the plea, in our glory days in the 70s, to match our production and our resource use to the basic needs of people and build up our nascent industries to reduce our extreme dependence on imports for everything. Unfortunately, we have allowed a select few to benefit from the exploitation of its natural resources with the result of widespread poverty and extreme import dependence. Africa has taken the wrong lessons from the economists’ theory of comparative advantage.
There will be time enough to expand on this. But suffice it to say that Africa must absolutely recapture much of the local production of basic industrial goods. Much can and has been written about industrialising Africa. The real impediment has been the will and commitment of our leadership. There are, of course, several good examples of the leaders that Africa needs at a time like this, and it is essential that we hold our leaders fully accountable to their responsibilities in governance and the formulation and implementation of good policies.
The African leader needs to engage the African people, and give them agency, in the search for the structural solutions. To break out of Africa’s poverty trap requires that African leaders recognise, as eminent leaders from Cardoso to Mandela recognised, that in today’s world, the legitimacy of the leader derives neither from divine authority or from tradition, nor from the fact of having been elected. Legitimacy derives from the fulfilment of a social contract, from the delivery of what an engaged citizenry wants.
Africans want to no longer be the world’s whipping boy with a begging bowl, and to not have to cry out to the gods of other countries to provide our daily bread. This time, let the cry not be of pain, but let the cry be for leadership and for engagement and agency for all. Our common future depends on this.
Ohiorhenuan, an economist and former Director at the United Nations Development Programme, is a Distinguished Service Fellow at the Department of Economics of the University of Ibadan