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A better normal for Africa

Jul 11,2021 - Last updated at Jul 11,2021

ADDIS ABABA — Despite incurring high costs in terms of lost and foregone social and economic progress during the COVID-19 pandemic, Africa has so far avoided the kind of health and economic calamity that some anticipated when the crisis began. Like any crisis, the pandemic could represent an opportunity to lay the groundwork for a better future. But it won’t be easy.

First and foremost, the continent must get COVID-19 under control, which requires ensuring equitable access to vaccines. As it stands, some advanced economies are on track to achieve widespread vaccination within months. Yet Africa is struggling to secure the 90 million doses it needs to inoculate the highest-priority 3% of its population, including health-care workers and the most vulnerable groups.

This is clearly a humanitarian disaster in the making: every day those most at risk are denied access to COVID-19 vaccines is a day when more people die needlessly. But it is also an economic disaster: according to a National Bureau of Economic Research study, if the advanced economies continue to hoard vaccine doses, the global economy would suffer losses of more than $9 trillion in 2021.

There is some promising news. US President Joe Biden’s administration recently pledged to join the 100 other countries seeking a temporary COVID-19 waiver of the World Trade Organisation intellectual-property rules. Allowing countries to manufacture generic versions should, one hopes, facilitate the rapid scale-up of vaccine production, thereby enabling all countries to immunise their populations soon.

But ending the pandemic is only the first step. Africa must also strengthen the resilience of its health systems and supply chains. Success will depend largely on countries’ commitments to the kind of collaboration and solidarity that characterised the pandemic response.

Africa was nowhere near prepared for COVID-19. Before the pandemic, the continent’s annual healthcare financing gap already stood at $66 billion, while 550 million people lacked legal identity, making it extremely difficult for health authorities to test, treat, and identify priority groups for vaccination.

Moreover, Africa-based manufacturers could meet only 2 per cent of the continent’s needs for medicine, and 1 per cent for vaccines. In 2018, nearly 96 per cent of African countries’ pharmaceutical imports were from outside the continent. Food supply chains are similarly vulnerable: imports were from outside Africa in 2018.

The combination of trade disruptions and protectionist policies during the pandemic proved just how vulnerable such “optimised” global supply chains can be. That is why, in addition to boosting investment in healthcare systems, Africa must work to diversify its supply chains in strategic industries and develop regional value chains.

This must include strengthening local capacity to manufacture vaccines, diagnostics, and therapeutics. To aid this effort, governments should ratify the Treaty for the Establishment of the African Medicines Agency and begin collaborating on common regulatory and quality standards.

Beyond supply chains, African countries, many of which remain highly dependent on oil, commodities, and tourism, must make economic diversification a top priority. Here, the African Continental Free Trade Area can play a central role.

The AfCFTA investment protocol soon to be adopted will enable Africa to attract funds that can be channelled towards more productive sectors, including transport infrastructure and logistics, thereby facilitating greater intra-African trade. More broadly, by creating a single market of 1.2 billion consumers, worth $2.5 trillion, the AfCFTA can facilitate industrialisation, enabling African economies to ascend the value-added ladder.

Yet Africans can and must go further and reimagine our economies, so that they are inclusive, green, and digital. The COVID-19 pandemic has disproportionately affected women, young people, slum dwellers, and informal workers.

These groups must be at the centre of the pandemic recovery. Governments must ensure equitable provision of services, such as healthcare and education. They must devise effective policies to unlock employment and business opportunities for underserved populations. And they need to emphasise long-term returns by allocating resources toward high-impact projects in areas that can crowd in private investment.

A good example of a project that brings together Africa’s private sector, regulators, and governments is the Africa Communication and Information Platform. The ACIP is an interactive mobile-based menu system that enhances African governments’ ability to communicate and interact with the citizenry in mitigating and managing the socioeconomic impact of COVID-19. Using artificial intelligence and mobile data analytics, the ACIP turns user-generated survey data into actionable health and economic insights to inform the pandemic response.

Investments in sectors such as renewable energy, climate-smart agriculture, and sustainable public transport also meet the requirements of durable returns, leading to significantly more job creation and value added than fossil-fuel-based investment. In South Africa, for example, green projects could deliver up to 250 per cent more jobs and 420 per cent more value added, compared to fossil-fuel alternatives.

To fund a green pandemic recovery, African governments should take advantage of carbon offsets and innovative sources of finance, including green and blue bonds and debt-for-climate or debt-for-nature swaps. Governments will also need to create incentives for the shift from resource-intensive to sustainable models of production and consumption.

Finally, Africa must invest in its digital economy. The pandemic has shifted a significant share of work and consumption online. Moreover, grassroots innovation is already happening across the continent. The value of e-commerce on the continent could reach $500 billion in 2030.

The public sector must encourage and facilitate these developments. To achieve the African Union’s vision of “continental ownership” in the digital space, countries must fulfill their commitment to raise gross expenditure on research and development to 1 per cent of GDP. At the same time, they must invest in the relevant hard infrastructure, such as electricity and broadband, and soft infrastructure (consumer protection, privacy and data regulations, and digital skills).

The United Nations’ Economic Commission for Africa will continue to support member states. That means using our convening power and technical expertise to drive progress in critical areas, including fiscal policy, domestic resource mobilization, macro-structural reforms, trade, investment, green growth, intellectual property, digitalisation, debt management, sustainability and AfCFTA negotiations and implementation.

When the history of the coronavirus crisis is written, policymakers will be assessed not only by how they coped with the pandemic, but also by what they made of it. If Africa emerges with old inequalities unaddressed and new opportunities unrealised, we will have missed a window. We must recognise that a better normal is possible, and act boldly to make it a reality, thereby transforming the crisis into an opportunity.

 

Vera songwe is United Nations Undersecretary General and Executive Secretary of the UN’s Economic Commission for Africa. Copyright: Project Syndicate, 2021. 

www.project-syndicate.org

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