- March 20, 2023
- Posted by: AITRC 2
- Categories: News, Blog, Report
WEEKLY TRADE POLL FOR AFRICAN COUNTRIES
MARCH 2023
The COVID-19 pandemic has caused an unprecedented global health, social, and economic meltdown. The pandemic hit African countries hard, and the severe economic impact has increased the number of people living in extreme poverty and caused an economic recession in most of Sub-Saharan Africa in 2020, according to the African Union (AU) study, which reveals that about 20 million jobs were lost on the continent as a result of the impact of the coronavirus pandemic[1]. These massive disruptions affected the education system, healthcare, travel, logistics, and other critical services. However, the effect of COVID-19 varies from nation to nation across Africa because Africa is not a homogeneous continent. Most African economies shrank due to the pandemic due to worsened macroeconomic conditions. While most regions of the world have loosened their fiscal restrictions to provide their populations and businesses with funding to support their recovery policies, most African countries are said to lack the political will, resources and tools to make such a policy decision.
However, some African economy is showing signs of recovery, and it has not fully recovered from the effects of COVID-19. According to the African Development Bank (AfDB), flagship publication African Economic Outlook 2022- Africa’s gross domestic product grew by an estimated 6.9% in 2021[2]. This is after the pandemic-induced contraction of 1.6% in 2020[3].
The report found that rising oil prices and global demand have generally helped improve Africa’s macroeconomic fundamentals. But growth could decelerate to 4.1% in 2022, and remain stuck there in 2023, because of the lingering pandemic and inflationary pressures caused by the Russia-Ukraine war. Nevertheless, this growth is fragile, and many factors could slow down or even reverse the recovery. Now, Africa requires long-term, sustainable strategies. It should evaluate its top priority areas and launch a coordinated, sustainable economic recovery plan.[4]
WEEKLY AFRICA TRADE POLLS (THIRD WEEK MARCH, 2023)
This set of references has led Africa International Trade and Commerce Research (AITCR) to conduct a weekly trade poll for African countries to evaluate public opinion and generate responses on the impact of Covid-19 on trade and the African economy. Finding from the polls, reveals that 6 percent of the respondents assert that the African economy has “fully” recovered from the effects of Covid-19, 39 percent opined that the African economy has only “moderately” recovered from the effects of the Covid-19 while 55 percent averred that African economy has “not recovered” recovered from the effects of the Covid-19. Thus, the poll verified that the continent has not yet fully recovered from the devastating effects of the Covid-19 pandemic. Furthermore, the survey highlights that plans must be matched with adequate actions to sustain the recovery rate to a significant point. On this note, we proposed the following policy recommendations:
The implications of the health tragedy on the economy are still being felt. As already noted, no area, sector, or company has been spared from the disruptive effect of Covid-19. Consequently, collaboration and partnerships between the public and private sectors have become even more crucial and integral components of African economic recovery plans. In light of the findings of this study, AITCR recommends regional cooperation among African nations to hasten the pace of pandemic recovery, as there are several policy decisions that African governments and international development partners can implement are thus the following:
1. Vaccine Access: Access to vaccines is crucial to the resumption of economic activity. African governments should work with international organizations to ensure vaccines are available to all Africans. The African Union has launched the Africa Vaccine Acquisition Task Team (AVATT) to ensure vaccines are available to all African countries. Governments should also invest in vaccine production capabilities to reduce reliance on imports.
2. Debt Relief: African countries face a debt crisis, hindering economic recovery. International organizations should provide debt relief to African countries, especially those with high debt-to-GDP ratios. Debt relief should be conditional on implementing economic reforms to promote growth and development.
3. Economic Reforms: African governments should implement economic reforms to promote growth and development. This includes investing in infrastructure, promoting private sector development, and improving the business environment. Governments should also promote regional integration to increase trade and investment within Africa.
4. Investment in Healthcare: The pandemic has highlighted the importance of investing in healthcare in Africa. African governments should invest in healthcare infrastructure and human resources to ensure that the continent is prepared for future pandemics. This includes improving all Africans’ healthcare access and investing in research and development to develop new treatments and vaccines.
5. Support for the Informal Sector: The informal sector employs a large percentage of the African population, and the pandemic particularly hard hit it. African governments should provide support to the informal sector, including access to finance and business training. Governments should also implement policies to formalize the informal sector, providing better access to social protection programs and improving productivity.
6. Investment in Education: Education is crucial for economic development, and African governments should invest in education to improve human capital. This includes improving access to education and promoting the use of technology in education. Governments should also invest in vocational training programs to improve skills and promote entrepreneurship.
7. Green Growth: African countries should embrace green growth to promote sustainable economic development. This includes investing in renewable energy, promoting sustainable agriculture, and reducing carbon emissions. African countries should also promote circular economy models, reducing waste and increasing resource efficiency.
8. Digitalization: The pandemic has highlighted the importance of digitalization in promoting economic development. African governments should invest in digital infrastructure, including broadband networks and digital payment systems. This will promote digital entrepreneurship and increase access to digital services, including education and healthcare.
Conclusion
The African economy has not fully recovered from the effects of COVID-19, and several challenges need to be addressed to support economic recovery. To support economic recovery in Africa, there is a need for increased investment in healthcare, education, and infrastructure. African governments should also implement economic reforms to promote growth and development, and multilateral lending partners should provide debt relief and support for vaccine access. By implementing these policies, Africa can recover from the effects of COVID-19 and build a more resilient and sustainable economy. Also, it will enhance the competitiveness of African goods and services, creating opportunities for global export and developing new export markets within the continent; facilitating trade between African countries through policy harmonization will promote business and social change.
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[1] https://www.africanews.com/2020/04/09/au-report-projects-20-million-job-loses-in-africa-due-to-coronavirus//
[2] https://www.afdb.org/en/news-and-events/press-releases/african-economic-outlook-2022-africas-2021-economic-rebound-impacted-lingering-covid-19-pandemic-and-russia-ukraine-war-51865
[3] ibid
[4] Long-term strategies for an African recovery from COVID-19: A CEO’s perspective (brookings.edu)
