COVID-19 PANDEMIC: REBOOTING THE ECONOMY
By Okofu Ubaka
Given the 12 month duration of the 1918 pandemic which killed over 21 million persons globally including those in Lagos, Ilorin, Onitsha, Bida, Kano, Windhoek, Addis Abba, Port Louis and other cities of the world, it is expected that Covid-19 would not go beyond 2021. This may be particularly so in Africa where cases of the pandemic are being recorded in yet insignificant figures.
Indeed, the figures are insignificant because the number of persons infected and those who had died from the disease in the United States, Europe and other hotbeds of the mortal plague far surpass the recorded cases of the virus in Africa.
Like the 1918 pandemic, Covid-19 is exogenous. This means that the virus did not originate in Africa, but in Wuhan. There is no gainsaying that this information is vital. Perhaps, the reason so many lives were lost in the 1918 pandemic was due to the slow means of disseminating information at that time. Today, we are far from the analog captured zeitgeist of the 18th Century, and African leaders have shown clear intention to maximize the platform of the social media in rising up to the challenges of containing Covid-19. It’s worthy of note that perhaps over 78% of the population in Africa is aware and conscious of the lethal health consequences of catching the virus. It will therefore be incorrect to equate the non compliance of wearing face masks and hand gloves as ignorance on the part of an African population that is essentially dominated by the poor.
Instructively, the 1918 pandemic did not kill Africans as much as it dealt a debilitating blow on the economy of the continent. In the same vein, the economic backlash of the Covid-19 pandemic cannot be wished away. The economy of the African continent during the outbreak of the immediate past pandemic was agriculture based. The cultivation of cash crops and the exploration of solid minerals were the economy mainstay of the continent. As soon as the epidemic broke out, both sectors were paralysed. One account posited that over 4% of the population of Addis Abba, Port Louis, Windhoek, Ilorin, Sekondi and Bloemfontein were paralysed, which led to an increase in the number of orphans. Further, this also signalled the beginning of child labour in the continent.
In addition, from the ensuing prognosis, it may already suffice to say that the economic effects of the 1918 pandemic may not indeed be as devastating as we wait to see the incoming effects of Covid-19 on the economy of the continent. Here, we may note that the present economy of Africa is not as volatile as it was in 1918 where the GDP growth was steady, and with very minimal foreign debt indices. Also, the population of the respective countries were still sparse. Today, the population of the continent has far surpassed that of 1918, and the United Nations and other international bodies are increasingly worried about how the people of the continent would be affected.
In less than a month of recorded cases of the pandemic in the continent, economies of most Africa countries had began to shrink. In response to the economic concerns of the pandemic, African countries have started rolling out a wide range relief measures to cushion, if not tame the effects of the pandemic in the months and years to come. One of such impressive economic plans seems to be the one from Nana Akufo-Addo, the President of the Republic of Ghana who stated that the “government of Ghana in collaboration with The National Board for Small Scale Industries, (NBSSI), business and trade association, and selected commercial banks will roll out a soft loan scheme of up to a total of Six Hundred Million Ghana Cedis, which will have a one year moratorium and two years repayment period for micro, small scale and medium scale businesses”. In addition to the above, the President also announced free water supply to all homes by the Ghana Water Corporation.
The government of South Africa, Africa’s second largest economy, has also announced that more than R2 billion will be made available through the Debt Relief Fund to assist small and medium businesses, as well as offer four months tax holiday to businesses in South Africa. Not much has been heard from the Nigerian government. However, the Central Bank of Nigeria has announced a slash in the interest rate on loans from its own portfolio from 9% to 5% for 1 year while the Ministry of Finance says it is still consulting with stakeholders on possible fiscal intervention measures. A reported plan to give free electricity to subscribers appears to have been bogged down.
Significantly, Ghana and South Africa’s economic strategies in a post Covid-19 economy take cognizance of the small and medium scale businesses where lie the survival of the continent.
While the world undertakes a clinical prognosis in preparation for a vaccine, big economies are preparing to cut short the lockdown. On this bandwagon are Germany and the United States. The German Chancellor opined that the world must learn to live with the virus than wreck world economy. Donald Trump is considering unlocking the US economy on May 1st. But the World Health Organisation has warned that the way up was far more dangerous than the way down.