Today's trillion-dollar question is: What will the post-Covid-19 world look like? Will the world indeed deglobalise, will supply chains shorten and what will all of this mean for Africa's many already-fragile economies?
Over the last few weeks, there has been a multitude of predictions on the size and scope of the economic upset caused by Covid-19. The International Monetary Fund (IMF) predicts the global economy will contract by 3% in 2020, making the "great lockdown the worst recession since the Great Depression, and far worse than the Global Financial Crisis".
McKinsey, for example, finds that in the absence of significant fiscal stimulus, Africa will experience a three to eight percentage point cut to GDP growth, up to a $200-billion decline, notwithstanding the effects of currency devaluations, inflationary pressure, or declining credit ratings, all of which could further worsen the economic outlook.
Economists are usually more cautious to predict good things. However, a global reset does not have to be a bad thing for Africa if it can use this crisis as an opportunity for much-needed economic reform, and in so doing reposition itself to take advantage of a changed global order.
The first step, as pointed out, is thus to...