The Day After COVID-19 - Overcoming The Novel Coronavirus Double Jeopardy In Central Africa

2 July 2020
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This was not a bad dream: It happened

This was not Steven Soderbergh 2011 movie “Contagion” or any sci-fi movie where a rogue character unleashes a biological warfare for profit maximization. It was not a bad dream, either! It happened.

In 2015, Bill Gates predicted it and indicated that the world would not be prepared for it. It wasn’t! A prophecy turned reality? A Nostradamus of the 21st Century?

Conspiracy theories aside, it touched rich and poor, developed and developing world, the old and the young, music icons and Prime Ministers alike and even a top virologist such as Peter Piot, Director of the London School of Hygiene & Tropical Medicine and one of the discoverers of the Ebola virus; in short, it touched all of us and in an apocalyptical way!

Draconian measures were taken. Member States declared national emergency, curfews were imposed, war cabinets were established, lockdowns became a norm and soldiers left barracks to come and enforce the confinement. It didn’t end there; borders were closed impairing the livelihoods of informal cross border traders, especially women, and creating havoc in landlocked developing countries such as Chad and Central African Republic.

Travel was interrupted, with many planes grounded. Two of my colleagues were left stranded in Brazzaville for a month or so, and, Inge, my daughter who was studying in South Africa, could not join us in Yaounde for the Easter holidays. Tragically, travel restrictions imposed that I and many others across the globe could not travel to join relatives to pay the last respect to loved ones who passed away during that period.

Deepened macro-economic instability

Oil prices plummeted to below US$20/barrel due to supply and demand dynamics as well as price wars between Russia and Saudi Arabia, deepening macro-economic instability in oil-exporting dependent countries. We have a couple of them in Central Africa, namely Angola, Chad, Congo, Gabon and Equatorial Guinea.

A Black Thursday we witnessed, a bear market we entered with stocks plunging nearly 30% below record highs. Businesses declared bankruptcies and massive bailouts reminded us of the 2008 global economic meltdown and financial crisis and the “too big to fail” narrative. Boeing needed billions of aid to survive. Some airlines collapsed, with IATA estimating airline industry losses of up to US$84 billion in 2020.

Factories closed, restaurants too. The entertainment and creative industry was hit hard as theatres, museums and concert halls closed. Sports were not spared either, a 3-month hiatus was followed by surreal games played behind closed doors with no fans, taking the example of the Everton-Liverpool Merseyside derby, which in a normal day would have attracted tens of thousands of spectators. To the dismay of many, because of the ban on alcohol sales during the lockdown period and lack of storage capacity, South African Breweries had to dump the equivalent of 400 million bottles of beer, as retailers stopped buying beer.

Jobs were lost everywhere, pushing many to the poverty line, especially in the informal sector. For the 2nd quarter of 2020, ILO estimated a drop in global working hours equivalent to 305 million full-time jobs. It also indicated that 1.6 billion informal economy workers would be significantly impacted by lockdown measures, especially in developing countries lacking appropriate safety nets. Gender-based violence increased and mental breakdowns alike.

Nations sink into a deeper financial hole

Global supply chains were disrupted, domestication of production and supply increased, leading analysts to indicate that the pace to deglobalisation was irreversible. As economies collapsed, debt restructuring topped the policy discourse as lack of financial liquidity risked sinking nations into an even deeper financial hole. Credit rating companies were on the spot with several countries weary that any precipitated debt restructuring move or a call to debt cancelation could lead to a “junk status” downgrading, closing access to markets!

Just as in 2008, the debate this time around also became alphabetical[1] with economists pondering whether the shape of the economic recovery would be a Z, U, V or a W, in other words, a spending spree and a brief boom after the end of the lockdowns followed by a growth trajectory at the same level as in the pre-pandemic period (Z); a slow downturn followed by a slow recovery (U); a dramatic tumble followed by a sharp upswing (V); or a recovery followed by another retraction and then a second rebound (W), respectively. Others, inspired by the Nike logo, talked of a” Nike swoosh” recovery, i.e. a quick but short dramatic surge at the end of the lockdowns followed by a long and slower rate of recovery.

The shape of all of these economic recovery trajectories depended, of course, on many factors including how intense the pandemic would be, how long it would last, whether we would have a second surge of infections and how effective the stimulus packages would be to accelerate the recovery. Many pundits agreed that economic recovery would mostly depend on how fast we would exit from our fears because those and not administrative measures would determine consumer confidence, whether we would sit in restaurants, travel, go on holiday or go to the barbershop.

Sadly, unlike in 2008, this crisis was different. COVID-19 was a unique and tragic health, economic, social and humanitarian crisis, with every country in the world affected, millions of people infected and hundreds of thousands dead, including Manu Dibango, whose 1972 hit single Soul Makossa filled dance floors across the globe. Not even druid Getafix’s magic potion would have saved Obelix from COVID-19 debilitating effects. Masks and sanitizers became the face of our fear and of the exponential danger we were all faced with.

Our habits and customs, were tested; e-commerce exploded and new apps hit the markets offering solutions to life in lockdown. We learned social distancing and to navigate between Microsoft Teams, Zoom, Webex, Bluejeans, Skype for Business and many other platforms as teleworking became pervasive. The future of work changed before our eyes, giving better expression to the concept that countries could leapfrog to a knowledge economy and a digital society, turning old practices obsolete.

We are resilient

Amidst the suffering and the havoc caused by COVID-19, we witnessed the best of mankind. Former enemies forgot old quarrels and came together for the common good, some sanctions were waived for humanitarian reasons and fighting stopped temporarily.

In the UK, 100-year old Captain Tom Moore, a WWII veteran, raised over 28 million pounds for charity, a world record in money raised for charity by an individual walking. WHO, Global Citizen and Lady Gaga’s mega virtual concert “Together at Home” raised US$128 million for WHO’s COVID-19 Solidarity Response Fund to help treat and fast-track vaccine development.

Billionaires from within and without provided aid to the less privileged. Factories retrofitted their operations to produce ventilators, masks, sanitizers, ventilators and other personal protection equipment (PPE). Seven Formula One Teams, one of my favourite sports, joined forces to produce ventilators.

The African fabric, kitenge, became a fashionable and personalised way to protect oneself giving colour to masks and, more importantly, jobs to informal, small and medium-scale enterprises (SMEs). Heru Tech, a start-up of young Senegalese invented Yessal Box, a disinfectant gantry, which enabled the spraying of disinfectant solutions associated with a hand sanitizer dispenser and a camera to measure temperature and check whether individuals were wearing masks, this just an example of the explosion of innovation triggered by the pandemic.

The race for a COVID-19 vaccine mobilized governments, universities, research institutions and the private sector in a symbiotic or competing relationship to produce the vaccine in 12-18 months or less rather than the usual four years cycle of research, preclinical and clinical trials, approval, manufacturing and distribution, required to produce and release an entirely new vaccine and make it available for the public. At a time, 95 COVID-19 related vaccines were being explored[2].

Work together to save lives

The UN came up strongly too, supporting governments with the health and socio-economic response at the global, regional and country level. The UN Secretary General urged the world to “work together to save lives, ease suffering and lessen the shattering economic and social consequences” of COVID-19. He called on countries to build back better so that the day after COVID-19 would be cleaner, greener, healthier, safer and more resilient.

African Ministers of Finance came together, steered by the Executive Secretary of ECA, Dr Vera Songwe, and informed by ECA’s seminal report titled “COVID-19 in Africa: Protecting Lives and Economies[3], which provided an early assessment of the socio-economic impacts of the pandemic on Africa and responses to it, to define measures for restoring growth and hope on the continent. These included a call for: US$100 billion for economic stimulus;  US$100 billion for the health response; a more resources frontloaded  budget support by the World Bank; improved access to IMF emergency disbursements through its Rapid Credit Facility window and other emergency facilities; a two-year debt stand still for all of Africa to provide fiscal space for governments suffering acute revenue losses; allocations of Special Drawing Rights (SDRs) as a means to providing additional liquidity for private sector development; and the establishment of a Special Purpose Vehicle (SPV) to manage Africa’s commercial debt. Ensuing conversations with the G20, Paris Club, IMF, World Bank, private lenders and rating agencies shaped the architecture of Africa’s financial response to the pandemic.

In partnership with the Alibaba group, ECA also facilitated access of African SMEs to the Electronic World Trade Platform (eWTP) enabling them to reach new markets through efficient and rapid business-to-consumer (B2C) sales.  This action enabled small brands and distinct products from the continent such as the world acclaimed white pepper from Penja, Cameroon or the shear butter from Mali and vanilla from the Comoros Islands or Madagascar to quickly recover from the pandemic on the strength of the increased volume of sales enabled by the platform. The platform also offered training and support in areas such as e-commerce, logistics, financing, cloud computing and mobile payments

A double jeopardy for sure

In September 2017, Central African member States adopted the Douala Consensus on economic diversification (through resource-driven and trade-induced industrialisation) and the Made in Central Africa agenda, frameworks ECA developed as a response to the macro-economic instability created by the 2014 drop of commodity prices. By building resilient and structurally transformed economies in the sub-region, Central Africa would finally break the vicious cycles of booms and busts associated with its excessive dependence on the export of raw materials. COVID-19 made this imperative more evident and urgent.

ECA forecast anticipated that in a worst-case scenario, Africa’s economy would contract from the 3.2% GDP growth projected for 2020 to -2.6%, wiping two decades of gains driven by sustained reforms and positive growth. African oil exporting countries alone were expected to lose US$65 billion in 2020.

COVID-19 frapped Central Africa hard mostly through the commodity and tourism transmission channels and contraction of domestic demand. The pandemic triggered disruptions in international trade and slowdown of global economic activity with significant drop in demand for goods and services, including tourism. Our projections showed that the countries of the sub-region would collectively lose 4.1% of their previously forecasted GDP.

The sub-region exported most of its goods to Asia (53%) and Europe (29%), two of the four COVID-19 most affected regions. Slower growth in the rest of the world, particularly in China, had resulted in reduced demand for many of Central Africa's export products. This had impacted negatively on Central Africa’s exports and revenue as the prices of oil, minerals, cocoa and other commodities plummeted and tourism arrivals dropped. For countries such as Angola, Chad, Congo, Equatorial Guinea and Gabon, oil represents more than 50% of total exports and oil rents share of GDP exceeds 20%.

With a drop of more than 50% in the price of oil caused by COVID-19, the fiscal position of these countries weakened abruptly limiting their possibility of deploying adequate resources to respond to the health pandemic or provide stimulus to the economy, a case of a double jeopardy! The negative impacts of COVID 19 on Central Africa were not limited to oil producing and exporting countries. Travel restrictions in Europe shrunk revenues on tourism-dependent Sao Tome and Principe and slowed down economic activity causing a 34.2% drop on the GDP, the highest in Central Africa and almost twice the percentage drop (18.5%) in GDP experienced by oil-producing and exporting Equatorial Guinea, the second worst reduction in GDP in the sub-region.

Unlike China, Europe or the US, the sub-region had a low health space/capacity and inadequate financial means to immediately deal with a pandemic as massive as COVID-19. This was the epidemiological jeopardy. Moreover, the sub region’s overly-tight fiscal space inherited from the 2014 crisis limited the means available to bail out the productive sector and stimulate the economy. In 2020, the fiscal stimulus as a share GDP of France, US and UK were 11.8%, 11.7%, and 6.7%, respectively, as compared to an average of less than 1% in Central Africa. Herein was the financial jeopardy.

Central Africa countries announced various stimulus packages to alleviate the impact of the crisis on the population and on the economy. However, those measures had only redistributive impacts in the very short term, without significant effect on the overall production level.

If, as ECA had been advocating for decades, Central African countries had meticulously invested in the economic diversification and structural transformation of their economies, especially through resourced-driven and trade-induced industrialisation, the sub-region would have simply been among the most advanced bloc in Africa, with the fiscal space to deal with such eventualities as COVID-19. In the day after COVID-19, Central Africa ought to have started to build back better, with a greener economy and jobs, making the most of the Congo Basin’s natural capital and ecological services to the world through smart monetization of that asset class and attraction of innovative finance in the form of green bonds and other impact investments.

We insisted: Diversify and pursue Made in Central Africa

So, more than ever and in line with the Douala Consensus, the pathways to post COVID-19 recovery had to be centred on economic diversification, a call we made again on 17 June 2020 when together with the President of the CEMAC Commission and the ECCAS Deputy-Secretary General (in charge of physical, economic and market integration) ECA launched the process towards the harmonisation and consolidation of the CEMAC and ECCAS strategies on industrial development and economic diversification into one single integrated blueprint, the regional industrial development and economic diversification master plan (Regional PDIDE). The webinar was attended by about 100 representatives of governments, private sector, CSO, UN agencies, media and other stakeholders of Central Africa.

We supported countries to seize the opportunities created by COVID-19 to lock-in and roll-out the economic diversification and industrialisation masterplans which member States of the region had framed or were framing. This included national AfCFTA strategies.

We assisted Chad excel in solar energy production and industrial value-addition in beef products, rivalling Botswana;  Congo became the fertilizer hub of Central Africa transforming its trillions of  dollars of in situ vale of potash into fertilizers which made Africa a net food exporter rather than importer, as was the case during COVID-19; Cameroon became a regional leader in agribusiness and the digital economy; Equatorial Guinea ramped-up gains in services provision, R&D in tropical medicine, e-education and logistics, based on the strength of its excellent infrastructure;  Gabon became a world-class wood furniture supplier thanks to its break from a recent past where only raw timber was exported; the Democratic Republic of the Congo dazzled the world with local transformation of cobalt into lithium-ion batteries for electric cars championing the electrification of transport systems in Africa; and Sao Tome and Principe transformed its unparalleled blue economy endowments to become a preferred destination for sustainable tourism and a centre of excellence on fisheries and marine development.

An inward-looking investment and development approach anchored on the African Continental Free Trade, propelled the Made in Central Africa label to become a household reference of quality and high standard. To support economic diversification in Central Africa, we ushered a skills revolution, efficiently matching investments in human capital development to market and societal needs.

This is what fostering intergenerational equity meant. This is what we in Central Africa had to do so that our children and grandchildren and their generations thereafter would live in a much better world. Unlike what Bill Gates predicated in 2015, the sub-region made investments that more than prepared it to address systemic crisis of economic and health challenges. A better Central Africa was built.

COVID-19 was a bruising, humbling and deep-learning experience with no parallel in humanity’s recent history!

Nobel Peace Prize and Person of the Year

You may say, this is quite an unrelated and abrupt ending, but I couldn’t resist to add it.

At the Day After COVID-19, the Nobel Committee will face a dilemma to choose the winner of the Nobel Peace Prize. Nurses, doctors and other first respondents will be amongst the people’s favourites with the WHO amongst the contenders. Later in January, Time magazine editors will equally struggle to pick their final choice of Person of the Year juggling between their own views and the results of the reader’s choice poll.

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*Antonio Pedro is the Director of the Subregional Office for Central Africa of the United Nations Economic Commission for Africa (ECA).



[1] https://www.weforum.org/agenda/2020/05/z-u-or-nike-swoosh-what-shape-will-our-covid-19-recovery-take/

[2] https://www.nytimes.com/interactive/2020/04/30/opinion/coronavirus-covid-vaccine.html

[3] https://www.uneca.org/sites/default/files/PublicationFiles/eca_covid_report_en_24apr_web1.pdf

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