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27.04.2020

Covid-19: an opportunity that must be seized

Faten Aggad, an Algerian pan-Africanist, highlights the opportunities created by the Corona crisis.

Bild: von Salomon Djidjoho Is Covid-19 an opportunity to diversify African value chains? Lorries in Benin with raw cotton ready for export.

SARS-Cov-2 was dubbed the “great equalizer.” Humanity needed a submicroscopic organism to realize that we may, after all, not have individual destinies that are shaped by the perceived strength of our respective economies. But beyond its immediate effects, the pandemic will mold the world order in which we will be living long after it is gone. It will act as a catalyst to the transformation that has in fact already began fueled by shifts in the global values system and the rise of isolationism, greater inequality and discontent, the rise of non-state actors and the climate emergency. 

It is not often that such tectonic shifts happen – it’s a once in a century kind of opportunity. Whether countries and regions emerge better or worse off depends on how our collective response will allow countries to adapt to the requirements of an interconnected world where economic and financial models need reviewing to reduce vulnerabilities to threats that are increasingly unconventional and that in a way that does not exacerbate the inequalities created by the system currently in place.       

In this process, Africa can benefit but it can also become further marginalized. The solutions being negotiated today will determine which outcome the continent will face. The United Nations Economic Commission for Africa estimates that at least US$ 100 billion will need to be injected in African economies to help them weather the crisis. It is clear that traditional measures, notably aid, will not be sufficient to fill this immediate need. Even the European Union, Africa’s main development assistance provider was not able to mobilize new resources. Instead it opted to reallocate existing development funds from their initial purpose to be able to mobilise 3.2 billion Euros for the continent (excluding guarantees and European Investment Bank resources).

It is therefore not surprising that the first call emerging from Africa did not focus on aid but on debt relief to allow countries to create fiscal space to respond to multifaceted needs. Some African countries pay up to 20% of their revenue servicing debt. They are allocating a fraction of that to recovery plans so-far announced (with the exception of South Africa which announced that it will dedicate 10% of its GDP for recovery).

The continent was quick in articulating its ask signaling a departure from previous approaches – notably reliance on aid. International solidarity will therefore be critical to give the continent a fair start in the recovery journey. After all we learned from this crisis that no region is an island. But even with a blanket waiver of interest payments on debt for 2020 for the continent, estimated to represent US$44 billion (a fraction of the multi-trillion recovery funds launched in the global north) to complement the resources mobilized by multilateral institutions, notably by the International Monetary Fund, the challenge for Africa after 2020 will remain significant. That is unless the continent seizes the opportunity to invest in its transformation.  

The nature of the threats and challenges of the future mean that soloists are unlikely to survive. Regional cooperation will be a critical enabler. Luckily, responses to the current pandemic within Africa are cause for optimism. Conscious of weak domestic capacity, members of the African Union opted for coordinated action, notably relying on the African Centre for Disease Control, an agency of the African Union, to design response strategies, to mobilize resources and to strengthen the capacity of countries to test (in January, Africa had three laboratories that could test Covid-19 – South Africa, Senegal and Egypt – but by the end of March, 44 countries had domestic capacity to test). The agreement reached in early April to opt for pooled procurement of diagnostics and other medical commodities as well as coordinated international lobbying efforts on debt reduction are other key illustrations.            

But such regional approach needs to go beyond the immediate response. The crisis has further exposed African vulnerability in areas such as productive and manufacturing capacity. Strengthening regional approaches to create greater autonomy by promoting regional value and supply chains will be important. In this respect, the African Continental Free Trade Area is an important springboard. Such capability will also allow Africa to position itself globally. And there are opportunities for the continent. One case in point is the opportunity presented by a likely demand for a diversification of supply chains.

In his famous novel “The Plague”, Albert Camus wrote: "the habit of despair is worse than despair itself." The equalizer effect of SARS-Cov-2 and the changes it is likely to trigger should not lead to despair. With every change comes opportunity and it is how the continent will learn from this experience and engages, hopefully with a sense of confidence, that will determine its place in a new world order.


Faten Aggad, Algerian, is Senior Advisor to the High Representative of the African Union, Carlos Lopes. She works as an international consultant and is Business Associate of the Maendeleo Group, Cape Town, South Africa.

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