Prof Soludo is a professional colleague that I have a lot of tremendous respect for. He is very brilliant, deeply knowledgeable and smart.
I took time to read this piece from him. I believe the erudite Professor is just concerned and rightly thinking loud of the Economic consequences of the Lockdown in Africa due to the pardemic. There is absolutely no doubt that the Professor is very correct in his postulations. The African country economies were at the edge prior to the severely damaging and unpredicted pardemic. From any perspective you may want to examine this current issue, Africa fragile economies cannot collectively or individually afford to sustain the economic consequences of this unprecedented crises.
While you may tend to agree with the Professor regarding a copycat approaches by Africa leaders to address the pardemic, there is no doubt that Africa countries collectively lacked the financial strength to tackle the economic downfall of the current approach to fighting the pardemic.
We have seen the major power launching billions and trillions in stimulus packages, the oil gulf countries were not left out. Some South American countries are following suit. It is perhaps only in Africa as Professor Soludo had correctly stated that we are left with no choice than ask for debt forgiveness, grant and more loans that will most likely not solve the problem but compound the problems.
Professor Soludo sighted several other challenges that we have faced and successfully succumbed in Africa without lock-downs, we may perhaps conclude that African Governments probably took panicky measures or measures that were not generally reflective of their peculiar circumstances but that which was dictated by “follow follow” strategies of the worse hit countries.
For some reason, somebody may have created this virus and then follow up by creating a panicky gimmick that indicate that lockdown could stem the spread of the virus or it is a possible solution for tackling the problem. Like Prof stated, there was no lockdown during the Ebola epidemic . We however need to be very careful and mindful of how we approach this issue especially when human lives are involved.
The Prof. is definitely arguing in favor and actually concluded by asking African Governments to immediately open up their economies because the lockdown is not sustainable.
He gave some heart breaking facts to justify his call and this can be true really. One thing that Analysts have stated is that a major Economic recession that will hard hit African countries cannot be inevitable anyway.
The tragedy with that is perhaps what I have identified in my initial write up some weeks back when this pardemic just started to wear its ugly faces. That is the fact that a major global recession is inevitable. It will surely occur, no amount of stimulus incentives can stop that. Now with African countries, it will be double tragedy of back to back recession it some economies in Africa do not even see outright depression.
The reason for a double recession in Africa is simply due to the total dislocation of fragile palliatives created for most economies in Africa that were pre-existing conditions or issues prior to now, which has been projected to slow down Africa’s growth rate despite the commencement of AFCTA. Couple with the unavoidable global recession, it will be extremely detrimental to Africa’s economies at least in the next 3 to 4 years to come. With a growth rate projection of 4% at the start of 2020, and now downgraded to negative growth of -3%, it will be very challenging and tough times in Africa.
I had private discussion with some professionals around here in the US, they are painting a gloomy pictures in the next coming ethos in Africa. Bloomberg News wire last week ran a full features on African and it was short of calling for a major intervention to avoid a catastrophe greater than Coronavirus. My conclusion is that it is time for Africa to come together and declare an Economic disaster region of the world and follow that up with the creation of “Comprehensive Marshall Plan” Economic Pacakage that will leave no country behind in Africa. When Europe and Asia got devastated by the WW11 damages and economic woes, it was the Marshall Plan carefully created and guided by the World Bank ( then Bretton Wood Bank for the Reconstruction and Redevelopment of Europe and Americas that brought the magic that resuscitated the Economies of Europe and other similar countries.
Perhaps, this is about time to create the parallel of Marshall Plan for Africa. We must be strong as a continent to demand full and unwavering support for the Plan by all the superpowers especially the G8 and the G20 groups. Africa must demand less. We didnot create Coronovirus palavar but we are most likely going to be at the worse receiving end of the economic woes that this pardemic will create globally. We cannot afford a double recession or depression in Africa and everything is pointing to its inevitability as we speak.
Perhaps, one important missing link in Prof Soludo delivery on the pardemic is that he didnot really offer a cognate ,poignant and direct solution other than reopening the system across Africa. Even with about 4 or 5 weeks lockdown, the African economies have depreciated to less than 1% in growth rate. Once the aftermath effect of the pardemic start to surface in real micro and macro economies spheres, the reality will be dawn and we would suddenly see a deep cut in the growth rate leading to obviously a negative growth rate in Africa continent’s economies. Forget whatever IMF may say, the African Economies will surely see negative growths in the next 3 years.
The most ideal solution is to make the developed worlds the G8 and G20 pay for the *Africa Marshall Plan * to save 1.6 billion people in the continent from serious economic degradation. The resultant effect will be child’s play to the actrocities caused by the Cononavirus. There will be deep increase in poverty, hunger and more diseases may be inevitable more terrible than Coronovirus might even surface.
The world must be compelled to use this opportunity to actually take Africa seriously. We Africans too must bring forth some of our best brains to create this * African Marshall Plan.* The G8 and G20 world powers will never do it for us. They will never give us the magic to create that plan. We must harnest our best brains from within and in the Diaspora to create this Marshall Plan and dump the plan at the table or laps of the World superpowers to fund and finance. If they decline to accept it, AU must and should instigate a collective pull-out of all African countries from the United Nations. We must take those drastic action and equally declare all foreign loans from those G8 and G20 inconsequential and automatic defaults in repayment. We have to have a bargingjng power to instigate a full support for the African Marshall Plan . It must not be Loans, it must not be Debts, it must be strong bargaining to engage in Economic emancipation plans for Africa. I am not calling for Africa to become beggar nations, We are not asking for grant here but strong economic investment. It is the same Western Europe and Americas continues that invested heavily in China that brouhht it to the level of the second largest economy in the world. I am looking for a collective bargain Economic strategies that will help open up Africa Economies and save the calamity of the predicted double recession or even possible depression looming ahead.
Before I conclude, I strongly support the suggestion by Prof Soludo to look inward in Africa for the solution to the Coronovirus. We have herbs in Africa everywhere in our neighborhoods and the big western pharmaceutical companies are at the forefront to kill those efforts and growth of those alternative medicines. We surely can find and promote local herbs treatment for Coronovirus. We can get creative by making that a central focus of the fight against the virus. We must however be weary of the tough fight from the giant drug and pharmaceutical companies littered all over Africa. India today is perhaps the world’s largest producers of pharmaceutical products. Recently indian Government announced the achievement of almost 55% in local components sourcing in the manufacturing of drugs and vaccines by Indian Pharmaceutical manufacturing companies. These are local herbs and derivatives grown and produced in India. We can invest in such researches and I am sure most of our Universities and Colleges have those researches just gathering dusts in their respective laboratories across Africa. We can copy whatever India has done to achieve this milestones.
China that perhaps generated this Coronavirus is reputable to rely on herbs and traditional medications and derivatives to keep its citizens healthy especially most of the huge population living in the rural China and sub metro cities. Herbs perhaps constitute more than 40% of medication and treatment of all health related issues in China.
We cannot be ashamed of what we have. We may probably find local African alternatives to the vaccines to be generated by the Western pharmaceutical companies just as Prof Soludo alluded to.
Finally, due to the fact that some of us resides right in the epicenter of this pardemic in US and Europe where this Virus had been worse hit, one will be very reluctant to support Prof Soludo call for an immediate cancellation of all lockdown on Africa. I am not sure we should do it in that fashion. We have to be very systematic about it. This virus is really very dangerous and very deadly unlike whatever we may have seen before. Yes, we would be quick to talk about Ebola, but we must remember that Ebola killed million people in Africa probably. And wanton lost of lifes must be protected at all times. Ebola will be child’s play to this Coronovirus from all indication. Ebola is easily contained if necessary precautions are taken. Coronavirus is not like that. It is killing patients and killing the caregivers at the same time. Ebola never kills caregivers like Conona. We just cannot afford to allow this virus spread in Africa. It will be disaster.
We can conduct a systematic open up of the Economies on Africa with careful studies and strategies to contain the spread but an outright opening of the system across the Board will be very dangerous and we may end up paying more for doing that.
The situation we have with the potential economic downfall is not going to be different anyway even if we decide to throw open all the doors and allow people to go back business as if nothing has happen or Coronavirus does not exist anymore. As we speak, it will take miracle to save Africa countries from the tragedy that their economies will face once the world is able to successfully battle the Coronavirus. The damage is already inevitable. Why are we going to risk losing tons of our Africa citizens now by just opening up the system. I am very positive if Prof Soludo is located in New York, New Jersey, Spain, Italy and any of the other hot bed locations of this Coronavirus, he will never advise and call for an Immediate and unconditional opening up of the African economies. While I partially support his argument about the unsustainability of the African Economies to a continued lockdown, the situation is still very dangerous to take such a step Immediately. A systematic approach will be better advised. This virus is extremely dangerous period!. We cannot just joke with it even if we have to sacrifice collectively to fight it. Again, weather we return back to work in Africa or endure for a little more time to contain and wipe out the possible impact the virus could unleash on African continent, the damage is already done and we must be focusing on a comprehensive solution at the time instead. This is why I an concluding that we must be looking towards a solution to the health issues on a comprehensive level and a Master Plan to fix the economic damages from the current global financial and economic problems. We need an AFRICAN MARSHALL PLAN as a matter of urgency. It must be home grown and it must be compelled on the rest of the world ( G8, G20 and all other world multilateral organizations and their gangs ) . No one want to talk about reparations for the barbaric African Slave Trade treatments and yet, a comprehensive reparations was invoked and created for Europe and Ametica to rebuild after the WW11.
There is no doubts that the world will be plagued by serious recession in the next couple of months. The current situation is generally unprecedented. I have tried to conduct and analytical comparison of similar global economic challenges but none is probably comparable to this. The great global depression was occasion by sudden instigation of changes created by the industrial revolution and series of changes in the system especially among the major world players at that time. The 1930 s global recession was the results of the emergence of new world orders with dethroning of several economic system by hardcore thinkers and that was part of what led to the our of the WW11 between 1939 and 1945. Of course, another quick global recession followed thereafter.
The most recent global recession was occasioned by the emergence of the unexpected structural changes in global economic dynamism by the advent of and creation of internet and high tech revolution that started in the 1990s. It was definitely inevitable for the global economy to readjust and reboot kind of and this is why that recession only generated serious financial mismatch that needs serious adjustment and correction. At that time, the global economy was on top gear, production arr stepped up, growth were decimated but not badly damaged, there were no lockdowns and complete shut down of any economy. In fact, most of the stimulus packages them, were directed towards increasing production and consumption at the same time to stem the effect of the global bullish in the financial system.
With Cononavirus, it is completely a different ball game. All known global economic records have been shattered and broken, stock market, labor and employment markets, industrial and manufacturing shutdown globally, service industries and tourism completely grounded and may take years to resuscitate, growth numbers have been rendered meaningless at huge negatives across the board, Countries, States and Governments are at the brinks of declaring bankruptcies and failure, treasures and vaults at drying, commodities markets have been badly damaged with no clue how to revamp it, growing frustrated and global poverty index will soon shatter all known records and perhaps Guinness Book of World Records will have to go back to restart with most records being broken in the negative side.
Some Economists are already working on hypothesis to qualify and quantitative address the current global economic problem, it is nothing most of them have seen, read or even predicted even as latest as January 2020.
Some Analysts working to include a new hypothesis in the dynamics of economic problems called ECONOMIC TSUNAMI. We have economic recession, we have economic depression and Economic failure ( failed Economy) . Now we might see a new encyclopedia in terms of Global Economic TSUNAMI arising from this devastating consequences of the Coronavirus. Africa must be prepare for this and we must be fully armed and ready. The G8 and G20 are already gearing up to raise trillions in dollars to help each other. Africa must negotiate to be part and parcel of that deal. We cannot be left with the crumps.!!!
We can also note that I have personally tracked the meetings of G8 for past 15 years. Within that period of time, they have equivocally and collectively call for and inserted development funding for the Less Developed Countries LDC mostly in Africa in their plans. They have over the past 15 years promised to invest over $8 trillion dollars in LDC. But it is not certain if up to $1 trillion has been invested to date out of that pledges. This is a fact. This is why I opted and advised that Africans must demand participation from the G8 and G20 as MUST …… this is not negotiable. They must be reminded that it is time to honor those promises and pledges to support Africa’s development efforts. Let us see them release those promised $8 trillion dollars in the next 10 years to Africa.
Dr. Kazeem Bello is a Global Development Economist; Professional Investment Banker; Private Equity Manager; Risk Manager; Project Manager. He is currently the CEO/Principal Partner with Afrique Capital and Equity Funds Ltd based in New York; Chairman of the proposed Nigeria Federal Credit Union, USA; The President of NIDO America New Jersey and a member of the NIDOAmericas Board of Trustees.