The dilemma and prospects of Africa’s development under the new crown pneumonia epidemic

In the context of the global pandemic of the new crown pneumonia epidemic, although Africa is a late-onset region, it has attracted the attention of the international community due to its weak sanitary conditions and fragile public health security. After the first confirmed case in Africa appeared in Egypt on February 14, 2020, African governments attached great importance to it, and quickly seized the window of epidemic prevention and control, and adopted various epidemic prevention measures to push the peak of the epidemic backward. However, due to the fragile response capacity and poor coordination of the public health systems of African countries, and the moderate relaxation of epidemic prevention measures in some African countries, the epidemic has accelerated in Africa. As of the end of August, a total of more than 1.24 million confirmed cases in 54 countries in Africa, including South Africa, Egypt, Morocco, Nigeria, Ethiopia, Ghana, Algeria, Kenya, Cameroon, Côte d’Ivoire, Madagascar, Senegal, Libya, Sudan, Zambia, Congo ) There are more than 10,000 confirmed cases in 16 countries. In particular, South Africa is the most severely affected, with confirmed cases accounting for more than half of all cases in Africa. What is worrying is that the accelerated spread of the new crown pneumonia epidemic is superimposing various chronic diseases, which has a wide-ranging and profound impact on the economic and social development of poor and weak Africa.

New crown pneumonia epidemic impacts African economic recovery and integration process
In the 21st century, Africa’s economic growth has accelerated and has become an important pole of global economic growth. The economic structure of African countries is generally single, and their economic growth and structural transformation are greatly affected by the international economic environment. The global pandemic of the new crown pneumonia epidemic has severely affected African countries with prominent export-oriented economies.

1. The macroeconomic downturn is almost a foregone conclusion
On March 14, 2020, the United Nations Economic Commission for Africa reduced the economic growth rate of Africa in 2020 from 3.2% previously predicted to 1.8%. On April 6, the African Union issued a report stating that the economic growth rate of Africa in 2020 will be -0.9%. On April 9, the World Bank released a report stating that the epidemic has pushed Sub-Saharan Africa into its first economic recession in 25 years, and the region’s economy will shrink by 2.1%-5.1% in 2020. [1] Oil exporting countries will be hit hard. The economic growth of the two fastest-growing regions, the East African Community and the West African Economic and Monetary Union, will also slow down significantly. From a national perspective, the three major economies in Africa have been severely affected by the epidemic.

Nigeria, the largest economy and population in Africa, has reduced its foreign exchange income due to the decline in international oil prices. Insufficient foreign exchange reserves have exacerbated the depreciation of the local currency naira. The economic growth rate is expected to drop from 2.5% to -3.4%. [2] Affected by the new crown pneumonia epidemic, South Africa is facing the most difficult period of democratic transition in 25 years. The South African National Reserve Bank predicted in May that the South African economy may shrink by 7%. Angola is the African economy most affected by the new crown pneumonia epidemic. Not only has the pace of economic reforms been disrupted, but the sharp drop in oil prices has led to a cliff-like decline in the income of its oil industry. Capital Economics, an international economic analysis agency, predicts that the economic recession in Angola will expand from 1.5% to 3.5%. [3] In addition to the three major economies mentioned above, the African Finance Ministers’ Conference stated that the economic growth of most African economies is expected to be reduced by 2-3 percentage points or more.

2. The epidemic affects African economic growth through multiple channels
First, the new crown pneumonia epidemic has caused a decline in international demand, which has severely impacted the supply side of Africa. Affected by the superimposed impact of the international oil price war and the epidemic, the sharp drop in international oil prices and the drop in commodity prices will reduce Africa’s import and export trade by 35% year-on-year in 2020, with a loss of approximately US$270 billion, of which Nigeria, Angola, Algeria, Egypt and other oil exports The country’s income lost as much as 65 billion U.S. dollars; the export income of resource-based countries such as Congo (DRC) and Zambia was also hit hard. [4] Affected by suspension of flights and flight restrictions, African airlines including Royal Air Maroc and Egypt Air have lost a total of US$400 million. The African Aviation Association predicts that the African aviation industry will face losses of US$8.1 billion in 2020. With the decrease of tourists and foreign labor immigration to Africa, Africa’s tourism and catering services have also fallen into a downturn, and African remittance income has been greatly reduced. The African Union estimates that Africa’s tourism industry will lose 50 billion U.S. dollars in 2020. [5]

Second, the pandemic has led to a decline in attracting foreign direct investment in Africa. According to data from the UNCTAD World Investment Report 2020, as of April 2020, the number of cross-border M&A projects in Africa has fallen by 72% year-on-year, and the flow of foreign direct investment to Africa will fall by 25%-45%. At the same time, Africa is also facing problems such as capital flight, falling stock and asset prices, and high inflation. The measures of “closing the country” and “closing the city” of various countries have hindered African imports of goods, equipment and assembly parts, and the normal operation of enterprises and people’s lives has been deeply affected. With the shrinking of household consumption, the informal sector, which accounts for 85% of the employed population, has been severely impacted and hundreds of millions of jobs are under threat. The African Development Bank predicts that the pandemic will cause the loss of 30 million formal jobs in Africa, and the number of formal employment in Africa will drop to 740 million. [6]

Third, the fiscal deficits of African countries have soared and sovereign debt risks have increased. The United Nations Economic Commission for Africa and the African Union predict that African countries will have to increase public expenditures of at least US$100 billion and US$130 billion respectively in response to the urgent medical needs caused by the epidemic. [7] In fact, many African countries have introduced a series of fiscal measures involving central bank monetary policy adjustments, and the governments of South Africa, Kenya and other countries have introduced economic stimulus or social assistance programs. Most of the huge expenditures mentioned above are financed by borrowing new debts, which will lead to further expansion of African debt. At the same time, the decline in foreign exchange income has led to a general depreciation trend in the currency exchange rates of African countries, and the imbalance of international payments and falling exchange rates have weakened the solvency of African countries (see the table below for details). At present, more than 20 African countries have turned to the International Monetary Fund for emergency help to deal with the economic recession.

3. The process of the African Free Trade Area was forced to delay
On July 7, 2019, the African Union Special Summit announced the establishment of the African Continental Free Trade Area. According to estimates of population size and economic aggregates, the African Continental Free Trade Area will cover 1.3 billion people and US$3.4 trillion in 54 countries in Africa. With the largest number of countries and the largest coverage area, it will become the world’s largest free trade area since the establishment of the WTO. According to the African Union’s integration agenda, July 1, 2020 is the deadline for the implementation of the new tariff policy on goods and services in the African Continental Free Trade Zone. However, due to the sudden attack of the new crown pneumonia epidemic, the negotiations that have come to an end were forced to postpone their implementation. The date is postponed to at least January 1, 2021. The Secretary-General of the African Continental Free Trade Zone (Wamkele Mene) said that due to the outbreak and spread of the new crown pneumonia epidemic, governments of all countries have to make solving the public health crisis a priority. At present, 46 countries on the African continent have closed their borders. Due to the interruption of cross-border trade, the internal trade volume, which accounts for 16.6% of the total African trade, has dropped significantly. Although the negotiations on the first phase of the free trade agreement involving trade in goods and services have been completed, the epidemic will catalyze the increase in protectionism in African countries with a highly concentrated trade structure. Can the timetable for tariff concessions and non-tariff barrier removal be implemented on time? It remains to be seen. At the same time, the epidemic will also make the negotiations on investment, competition policy and intellectual property rights in the second phase of the free trade agreement more complicated and full of uncertainties. In addition, the epidemic restricts infrastructure construction in Africa and pushes up debt levels, which will also have a negative impact on the process of African integration.

Source: UNECA, COVID-2019 in Africa: Protecting Livesand Economics, Addis Ababa, Ethiopia, March 13, 2020, p.11.

Africa is challenged to achieve inclusive growth under the new crown pneumonia epidemic
Food security is related to national stability and people’s livelihood, but in 2020 the African continent frequently raises food shortage alarms. Droughts and locust plagues caused by abnormal climate have swept across the African continent and caused a wide-scale food crisis. The new crown pneumonia epidemic has not only increased the food gap but also affected the exports of the world’s major food producing countries, making it more difficult for African countries to obtain external assistance. At the same time, unemployment caused by the epidemic has aggravated poverty and made epidemic prevention more difficult. Road closures have also affected conventional aid projects and increased the risk of outbreaks of infectious diseases such as Ebola and AIDS.

1. The superimposed drought and locust plague caused African people to face the food crisis
First, drought has exacerbated food shortages in Africa. Climate change has caused frequent extreme weather. Southern African countries continue to suffer from climatic disasters such as droughts and floods, and food production has been severely reduced. Currently, among the 16 member states of the Southern African Development Community, about 45 million people are facing famine on an unprecedented scale and may deteriorate in the future. Among them, the economic collapse of Zimbabwe, coupled with the poor harvest in the first half of 2020, has caused increasingly serious food shortages, and the number of hungry people has reached the highest point in a decade. In addition, the food needs of millions of people in the Congo (Kinshasa), South Sudan and the central Sahel are also facing severe challenges, and the international community is in urgent need of assistance.

Second, the locust plague highlights hidden concerns about food security. At the beginning of 2020, a desert locust plague ravaged the Horn of Africa. Ethiopia, Djibouti, and Somalia suffered the worst locust plague in 25 years, while Kenya is experiencing the worst locust plague in 70 years. [8] This desert locust plague disrupted the normal agricultural production rhythm of the affected countries and to a certain extent broke the balance of food supply and demand in the severely affected areas. According to statistics from the Ethiopian Ministry of Agriculture, about 65,000 hectares of crops have been affected in the country, and the food shortage problem of more than 22 million people has become more severe; of the 1,700 farms and pastures in Djibouti, more than 80% have been infested by locusts, and nearly 30% of the population is facing famine. [9] What is worrying is that during the COVID-19 pandemic, the locusts in the Horn of Africa are still reproducing and are forming larger swarms of locusts and once again invading Eastern African countries, which will contribute to food security and livelihoods in the region. Cause an unprecedented threat. As the locust disaster spreads, the UN Food and Agriculture Organization has called for emergency assistance of US$153 million to Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Uganda and Tanzania to control the threat of desert locusts. According to statistics from the Food and Agriculture Organization of the United Nations, as of the end of March 2020, about 107 million US dollars have been pledged or received, and there is a gap of 46 million US dollars that needs to be filled urgently. [10]

Third, the new crown pneumonia epidemic has exacerbated the food crisis. In 2019, there was a gap of 24.79 million tons of wheat and 14.60 million tons of rice in sub-Saharan Africa. Africa needs to rely on food imports to make up for the gap in production and demand. After the outbreak, local prevention and control measures in Africa affected agricultural production and caused a sharp drop in food production. The World Bank predicts that sub-Saharan Africa’s agricultural production may shrink by 2.6% to 7% in 2020; due to rising transaction costs and rising food prices due to currency depreciation, regional countries’ food imports will drop sharply by 23% to 25% between. [11] At the same time, large agricultural countries such as Vietnam, Thailand, India, Russia, and Kazakhstan have successively suspended or banned some food exports in the international market. The food shortage caused by the cut-off of supply has made some African countries that rely on food imports even worse. A research report issued by the Southern African Development Community on July 28, 2020 shows that a total of 45 million people in southern Africa face the threat of famine, of which 8.4 million children face severe malnutrition. As a perennial food exporter, South Africa has also experienced food shortages. Affected by the ban, 20% of the 5.5 million people in Johannesburg, the economic center of South Africa, lack food security, and about 1 million families need food assistance. [12] As the epidemic spreads, the food crisis in southern Africa may worsen.

The global pandemic of the new crown pneumonia epidemic has caused significant impacts on the tourism, air transportation and petroleum industries of African countries. Foreign exchange earnings and foreign capital inflows have declined, fiscal deficits have increased, and debt risks have increased. African free trade zone negotiations have been blocked, and African economic recovery and integration The process is delayed. The picture shows passengers queuing to buy tickets at the bus terminal in Kigali, the capital of Rwanda, to maintain a safe social distance on June 3, 2020.

2. The epidemic will increase poverty and disease epidemics in Africa
There are 413 million extremely poor people living in sub-Saharan Africa, accounting for more than half of the world’s total extremely poor people, and 60 million of them are malnourished. There are 565 million people in the region without sanitation facilities and 330 million people without clean drinking water. [13] Most of the new coronaviruses in Africa this time are imported from European and American countries, and the spread is spreading from big cities to rural areas, making the fight against the epidemic difficult. There is a huge informal labor market in African countries, and most of its employees are daily or weekly wage workers. The epidemic has caused many small and medium-sized enterprises to close down, and the number of unemployed people has increased sharply. The informal settlements where the low-level people gather and live lack safe water and Health facilities, people in isolation are threatened by both epidemic and famine. In addition, the new crown pneumonia epidemic has triggered a series of humanitarian crises in Africa. Due to the suspension of aid projects such as food delivery, drinking water, and vaccination, the prevention and control of infectious diseases such as malaria, AIDS, Ebola, and hepatitis have also been affected, and the survival of about 76 million people has been threatened. [14] The United Nations Economic Commission for Africa pointed out that the new crown pneumonia epidemic may cause at least 300,000 deaths in Africa, and the worst case is estimated to be 3.3 million deaths and 29 million people into extreme poverty. The African Development Bank predicts that the epidemic will plunge 49.2 million people into extreme poverty. [15] The increase in the poor population will exacerbate social unrest. For this reason, UN Secretary-General Guterres stated: “Although the epidemic is not caused by Africa, Africa may suffer the most serious consequences. Only when the fight against the epidemic on the African continent is triumphed can the global epidemic be completely ended.” [16]

Epidemic increases political and security instability in Africa
Electoral politics, social unrest, and security issues have always adversely affected the socio-economic development of some African countries. The occurrence and spread of the new crown pneumonia epidemic has brought further severe challenges to the politics and security of African countries.

1. The epidemic may exacerbate political risks in African countries
The Center for Strategic and International Studies (CSIS) reported that the new crown pneumonia epidemic is not only a public health emergency for countries in sub-Saharan Africa, it may also evolve into a political crisis. [17] First of all, the spread of the epidemic has put 23 countries (11 of which are presidential elections) expected to hold elections in 2020 into a dilemma: the scheduled elections may encourage the spread of the virus; postpone the elections and worry about triggering a political crisis. On March 22, Guinean President Alfa Conte insisted on holding a referendum on a new constitution after two confirmed cases of new coronary pneumonia in the country, triggering protests and riots, resulting in at least 10 deaths. The Ethiopian government decided to postpone the federal parliamentary elections originally scheduled to be held in August, but the opposition parties resolutely boycotted them. Ethiopia’s internal political situation is highly tense. Second, the epidemic has intensified political confrontation between opposition parties and the ruling party in some countries. In South Africa, the main opposition Democratic Alliance and the white political party Freedom Front both took the Ramaphosa government to court and questioned the legitimacy of the government’s formulation and promulgation of national disaster management measures. In Nigeria, the opposition People’s Democratic Party criticized President Buhari for ignoring the impact of the epidemic, calling it a “complete leadership failure”. Opposition parties in Gabon, Mozambique, South Africa, and Zambia have also taken advantage of the situation to put forward their own policy propositions to prevent and control the epidemic, constantly impacting the ruling party’s epidemic prevention and control policy. Third, some governments have used the epidemic to achieve their own political goals, such as postponing elections and banning crowd demonstrations. In Uganda, the government is proposing to postpone the 2021 presidential election for five years until the government can effectively control the epidemic. If approved, the current President Museveni will benefit from it. The French Foreign Ministry’s Center for Analysis, Forecasting and Strategic Studies (CAPS) predicts that some fragile African countries may experience government downfall under the epidemic. [18] In mid-to-late August, the coup in Mali, a West African country, was the accumulation and outbreak of social and political crises.

2. The superposition of the epidemic and economic dilemmas has made Africa face greater security threats
As the new crown pneumonia epidemic spreads to the African continent, conflicts and wars are still raging in many countries. On March 8, 2020, two villages in Burkina Faso were attacked by armed forces, killing 43 people. In late May, Ituri province in the northeastern part of the Congo (DRC) was repeatedly attacked by the Ugandan rebel “Allied Democrats”, resulting in the deaths of more than 50 people. In some countries and regions, strict measures such as lockdowns, isolation, and social restrictions to combat the new crown pneumonia epidemic have caused riots and conflicts and aggravated regional security threats due to the superimposition of the economic downturn. On March 17, dozens of people in Senegal ignored the authorities’ ban and clashed with security forces when they assembled. On March 23, after the authorities in Niger closed the mosque and arrested a prestigious priest who violated the ban on religious ceremonies, riots broke out there. In South Africa and Kenya, taxi drivers have protested against the blockade measures affecting their livelihoods. Beginning in late May, the epidemic in some African countries has been in the outbreak stage, the medical system is overwhelmed, the domestic famine is serious, and people’s livelihood problems have become prominent. Many countries are facing the dilemma of epidemic prevention and economic recovery. Some countries have also increased frequent switching of epidemic prevention models. The risk of domestic unrest. In addition, the accelerating spread of the new crown pneumonia epidemic has increased public anxiety, panic and xenophobia, and cases of harassment and intimidation of foreigners have occurred from time to time. Ethiopia, Uganda, Kenya and Zambia have also seen violence against foreign citizens who are considered to be spreaders of the virus, and the security situation has deteriorated. It is worth noting that the Horn of Africa, the Sahel and the Great Lakes region are barometers of the safety of the African continent. During the epidemic, many African countries used military and other armed forces to implement blockades and travel restrictions and other prevention and control measures, and redeployed security forces to allow extremist organizations and rebel militants to breathe and take the opportunity to cause chaos. Islamic militant organizations also took the opportunity to expand, increasing the number of African countries. The hidden danger of security turbulence.

Prospects for Africa’s development in the post-epidemic era
At present, the new crown pneumonia epidemic is still spreading rapidly in Africa, and the fragile public health systems of African countries are overwhelmed. In addition, the various negative effects brought by the new crown pneumonia epidemic have superimposed effects, making the fight against the epidemic in Africa doomed to be a tough and protracted battle. . There are still many uncertainties when Africa will end the epidemic and return to its normal development track. But what is certain is that with the great help of the international community and the tenacious efforts of African countries, the development of Africa is still full of hope.

1. The new crown pneumonia epidemic provides an opportunity for Africa to reshape the social and economic structure
The rapid spread of the new crown pneumonia epidemic in Africa has exposed the deep structural problems in Africa’s economic and social development model. On the one hand, the African economy has long adopted a resource-export-driven growth model, over-reliant on the external world, and it is difficult to withstand external shocks; on the other hand, the African economy has “growth but no development” or “growth but little development”, and social distribution is uneven As a result, the middle and upper classes are separated from the bottom people, and there are hidden social dangers. Facing the impact of the epidemic, intellectuals in African countries began to reflect on the economic and social development model of Africa. On April 17, a hundred eminent personalities in Africa jointly signed the “Moment for Action: An Open Letter to African Leaders on the Crisis of the New Coronary Pneumonia Epidemic”, urging the leaders of the African continent to take the epidemic as an opportunity to face deep-seated structural issues. According to Africa itself Features Fundamentally accumulate internal resources, adopt an inclusive governance framework and endogenous development model, and create unique values ​​in Africa to reduce systemic dependence and truly realize “Africa’s second independence.” In early April, the African Union released the report “The Impact of the New Coronary Pneumonia Epidemic on the African Economy”, stating that the new coronary pneumonia epidemic should be used as an opportunity to change the development model of Africa, especially to transform the trade model with Europe, the United States, China and other emerging countries. Transform the policy recommendations on productive transformation put forward in “African Development Momentum: Achieving Productive Transformation (2019)” into practical actions to build an economy that can withstand external shocks and achieve sustainable development. It can be seen that although the epidemic has brought many challenges and pressures to Africa’s economic, political, and social development, these challenges and pressures will also become the driving force for the leaders of African countries to deepen reforms. It can be expected that African countries in the post-epidemic era will inevitably accelerate the pace of economic restructuring, and achieve diversification through measures such as the development of private economy, agriculture and food production, autonomous manufacturing, digital economy, and free trade zone construction; through Strengthen the implementation of health and social protection systems in African countries to meet the minimum needs for the health and survival of the people at the bottom.

2. The process of African integration in the post-epidemic era may improve quality and efficiency
The new crown pneumonia epidemic has highlighted the importance of developing a digital economy. The digital economy will become an important content of the second phase of negotiations on the African continent’s free trade agreement. From the three levels of the African Union, African subregional organizations, and African countries in response to the epidemic, it is not difficult to find that the digitalization process and digital industry development on the African continent have entered the “fast lane”, market integration and regional cooperation have accelerated, and local manufacturing Development, the standardization of small and micro enterprises, and the upgrading of urban infrastructure provide important opportunities. [19] It also planted the seeds of hope for reshaping the social and economic structure of Africa in the future. Kalingi, Director of the Regional Integration and Trade Division of the United Nations Economic Commission for Africa, said that the postponement of the implementation of the African Continental Free Trade Agreement will buy time for the re-allocation of resources on the African continent and the re-architecting of the free trade area to ensure that the African continent better responds to future climate The impact of public health issues. Strengthening intra-African trade will become a stimulus plan for job creation, guarantee of foreign exchange income, and realization of industrial and economic growth, and will help African economies recover from the impact of the new crown pneumonia epidemic. [20] The World Bank predicts that if the African Continental Free Trade Agreement is fully implemented, by 2035, the African region’s income will increase by US$445 billion, intraregional trade will increase by 81%, and 30 million people are expected to escape extreme poverty. [twenty one]

3. Africa will continue its development strategy that emphasizes both independence and international coordination
At present, economic globalization is suffering from a double impact. One is the promotion of unilateralism and trade protectionism in some countries represented by the United States, which has a profound impact on the globalization process; the second is that the new crown pneumonia epidemic has caused a serious impact on the global industrial chain supply chain, and has exacerbated the trend of anti-globalization. In this context, African countries on the edge of economic globalization can hardly stay aloof. In the post-epidemic era, African countries will promote the construction of regional value chains and supply chains within the African continent by accelerating the arrangements for economic integration in Africa when the global value chain is reshaping, thereby enhancing the capacity for independent development. On July 24, South Africa’s Minister of Trade and Industry, Ebrahim Patel, pointed out at the 10th BRICS Trade Ministers’ Meeting: “If we are only exporters of raw materials and imports of medicines, medical equipment and other key commodities Business, then we will not be able to protect citizens in this critical moment. Africa must establish a flexible and diversified supply chain, in which the improvement of domestic manufacturing capacity should become part of a new and inclusive supply chain, that is, the diversified manufacturing capacity of each country South Africa and the African continent have opportunities to expand existing product lines and new product development.”[22] However, they are troubled by a single economic structure, shortage of development funds, debt-ridden, lack of science and technology, frequent wars and regional conflicts. African countries at the low end of the global value chain will find it difficult to establish an independent industrial chain and industrial system in the short term. The inward development of the African industrial chain will be a gradual and long process, and it is also inseparable from the support and cooperation of international development partners. As Patel pointed out, “African countries’ construction of new diversified supply chains and industrial chains does not mean that they must be separated from global trade, investment and cooperation. They are still an important source of growth and development in Africa, and Africa needs to strengthen international Cooperation.” [23] In short, in the post-epidemic era, African countries will pay more attention to improving endogenous development and the construction of intra-regional cycles, while continuing to seek to establish a positive interaction external cycle development pattern with countries outside the region. History will prove that Africa can only embark on a path of sustainable development if internally and externally work together to form a synergy.