New hopes for Africa emerging through Covid-19

If 2020 was a year of accelerated megatrends, 2021 will be a year of action and coexistence. But this will come with ongoing uncertainty and a mixed-bag of results, based on evolving Covid-19 related trends.

By the end of the first wave of the pandemic, Africa, home to 17% of the global population, recorded just 2% of confirmed Coronavirus cases. Despite doomsday warnings, African healthcare systems remained relatively unscathed; leaving many to question this early positive outcome. Subsequent waves are now revealing a vastly different picture across the continent. This will play out in 2021 and beyond.

Covid-19 has had an immediate and lasting economic impact on Africa. The continent is emerging from its first recession in 25 years, and, alongside Latin America, will suffer the most severe economic setback of any region in the world.

This unwelcome setback comes at a crucial time in Africa’s growth, development and global integration. The continent boasts some of the highest rates of population growth and urbanisation in the world, where we see a clear convergence of demographics and technology. It is also increasingly an integral part of global value chains.

Despite a prolonged period of economic growth since 2000, economic delivery and modernisation remains slow, inequality is rising and institutions are stubbornly weak and ineffective. Covid-19 has exposed pitfalls and a lack of progress in key sectors across the continent. Economic shocks have been amplified by a lack of reserves and institutional fragility that will further hamper recovery across the continent.

Despite these concerns and economic setbacks, Covid-19 has revealed important characteristics in the African socioeconomic landscape and, like any crisis, presents exciting opportunities. 

JBS invited three experts to share their thoughts on ‘new hopes’ and opportunities they believe have emerged in Africa through the pandemic. These will drive and redirect growth and development across the continent.

Bonang Mohale, the Chancellor of the University of the Free State, and Professor of Practice at the JBS, believes the vast potential Africa holds needs to be harnessed and geared towards innovation and growth.

Despite Africa being home to more than half of the 10 fastest growing economies in the world, Mohale notes that there are, disappointingly, no African countries that feature as one of Bloomberg’s “Most Innovative Economies in the World 2020”. This survey measures areas such as R&D spending, patent activity, value-added manufacturing, productivity and high-tech density.

This may soon change, as home-grown tech solutions demonstrate great capacity for innovation. While governments focus on health interventions to contain the spread of the pandemic, African innovators have been working on developing innovative solutions to complement their efforts. For example, apps have been created to educate people about the virus, assist with identifying infections, and to provide solutions for digitising medical records in underdeveloped countries.

Mohale believes 2021 will be a historical and defining moment for Africa, “As megatrends are fast-tracked, with soaring adoption rates for telemedicine, cloud computing, social media and digital entertainment; the future is firmly on Africa’s doorstep,” he says.

Looking at South Africa specifically, Mohale believes the country has a long journey ahead on its path to recovery. “In order to address the lowest levels of confidence, trust and hope seen since the Second World War, we must send some top state capture miscreants to prison; secure vaccines as a matter of life and death; execute on long promised deep systemic socio-economic reforms; reduce soaring government debt; fix the more than 740 state owned enterprises; increase our infrastructure spend; execute on the 10 year old spectrum auction; focus on GDP growth; create jobs in large numbers and fix the quality of our educational system,” he concludes.

According to Professor Lyal White, Research Associate at the Brenthurst Foundation, “Covid-19 has illustrated an important reality for the advancement of African economies and society at large: Africa needs to be open and connected to thrive. This runs contrary to public healthcare interventions like lockdowns. The blunt application of broad-based lockdowns carry severe trade-offs, and are poorly suited in the richly diverse African context. Smart lockdowns with a deeper contextual understanding are necessary for economic continuity,” he says.

“Emerging from recession, Africa is expected to enjoy 2.5-3% economic growth in 2021. But growth will depend largely on how open and connected it is internally – between African economies – and with the world, most notably China. China is expected to contribute 30% toward global growth in 2021, which bodes well for Africa-wide recovery through commodity exports."

White is optimistic that Covid-19 may provide the spark for long-delayed integration and structural reforms that will yield a competitive, modern and open economic landscape in Africa. But he does not believe that pathways to recovery and reform will be even across the continent. “Already we are seeing how some are using this as a ‘reset’ to modernise, while others are muddling their way through,” notes White.

Like Mohale, White also sees 2021 as a watershed moment for Africans to map and determine their own future. “This will hinge on a range of diverse but inter-related developments: From Afro-innovations that meet the challenges of Africans, ranging from service delivery to online education, to the functional implementation of the African Continental Free Trade Area (AfCFTA) that will drive connectivity through technology and home-grown enterprises, best suited to the African context,” he says.

For Dr Jackie Chimhanzi, CEO at the African Leadership Institute, the perfect storm of weaknesses in social service delivery, fragile regional integration, low investments in science and a stark digital divide - exacerbated by the pandemic - has exposed the desperate need for African countries to develop a new kind of agility and responsiveness.

“Africans were quick off the mark to develop Africa-specific knowledge. Nigeria’s demonstration of rapid genome sequencing was impressive, as was South Africa identifying a new variant. This signals a welcome shift from Africans being spectators to contributors and players in understanding infectious disease outbreaks and contributing to global knowledge,” she says.

On the trade front, while there has been a marked trend globally toward inward-looking isolationist policies, Africa has bucked the trend notes Chimhanzi. “It is ironic that as the United Kingdom pulled out of the European Union on 31 December 2020, the AfCFTA Agreement came into effect on 1 January 2021, despite the pandemic and other teething problems.”

Chimhanzi credits innovative Africans who rose to the challenges presented by social distancing and lockdowns in 2020 with an acceleration in disruption and digitisation in fintech, edutech and healthcare solutions. Yet barriers remain and data costs are high and exclusionary, cautions Chimhanzi. “In December 2020, African leaders under the Smart Africa Alliance committed to reduce the cost of data. This may well pave the way for African governments to start being more supportive of the private sector, recognizing that it is a crucial partner in development and service delivery,” she says.

Chimhanzi also highlights the importance of the recent US elections for Africa. “The new US administration does present a new hope for constructive engagement and, in engaging with the US Africa must not squander the opportunity to learn from the past, put its best foot forward and negotiate well and confidently to secure win/win outcomes,” she emphasizes.

There is no doubt that we are living through an exciting period of change, widely described as ‘the great reset’. And Africa is no exception.

While Covid-19 has highlighted Africa’s chronically underfunded health systems, weak institutions, unequal internet access, widespread corruption and fragile regional integration, with a renewed focus on these challenges and resolve to overcome them perhaps there is reason to hope the pandemic will provide the push the continent needs to move forward. During these times of uncertainty, with prevailing institutional fragility, Africa desperately needs to rise and not fall. Progressive and impactful thinking is key in overcoming these challenges. This is imperative in the minds of business and policy-makers alike, and a critical prerequisite for recovery, as we enter the roaring 20s of growth and global integration.

Liezl Rees is the Senior Manager at the Centre for African Business (CAB) at the Johannesburg Business School and Nikitta Hahn is a Researcher at the CAB.