By Ayo Akinfe
(1) As the global lockdown continues, I am trying to count the economic cost. This shutdown will simply be devastating on mankind because we are consuming and not producing goods at the same rate. This is simply not sustainable for any lengthy period of time. It reminds me of the Great Depression that followed the 1929 Wall Street Crash
(2) When I look at the number of hotels, restaurants, airlines, holiday resorts, banqueting halls, sports companies, retail outlets, etc that will have to downsize and lay off staff, I shudder. Many of them will simply have to fold as recovering from this will be impossible. Is anyone thinking of the unemployment rate we will witness at the end of all this?
(3) African economies will be particularly hard hit because they rely on selling primary products. At the moment, the price of raw materials like crude oil, bauxite, tin, gold, diamonds, uranium, cocoa, palm oil, plantain, etc is at rock bottom. With industry not working, supply has exceeded demand, leading to the growth of huge stockpiles, in turn leading to a resultant price crash
(4) African economies are not like the US that has already signed a $2.2trn stimulus package. In the UK Prime Minister Boris Johnson has signed a coronavirus stimulus package worth $66bn. Even Malaysia has announced a $57bn stimulus package, while in South Korea, theirs is worth $80bn.
(5) Africa’s total gross domestic product (GDP) is only $2.5trn and very few countries have any significant foreign reserves they can fall back on. I am scratching my head asking how these economies are going to get back off their knees when this whole thing blows over
(6) Nigeria’s foreign reserves stand at a mere $37.5bn while those of Egypt are $45bn, South Africa $54bn, Algeria $65bn and Morocco $24bn. African nations will have to totally deplete their foreign reserves just to fund their 2020 budgets
(7) Even if these African nations get by during the course of 2020, next year will be arguably tougher as nobody will be buying their raw materials. Even if they find buyers, these goods will be purchased at bargain basement prices, in many cases below production costs
(8) Now is the time for African leaders to tell the rest of the world that they are bearing the economic brunt of this pandemic and they have a special case for a new Marshall Plan similar to what Europe got after World War Two. When you have 20% of the world’s population but account for less than 3% of global output, your case is different. Any stimulus package has got to be geared towards making you more productive
(9) I want to see an African Post-Coronavirus Stimulus Plan that compels companies to invest on our continent, is committed to the creation of at least 200m new jobs and is centred around ensuring Africa accounts for about 20% of global industrial production in line with her population ratio
(10) Things simply cannot return to normal after this crisis. Coronavirus has shown that African economies are on the fringes of global production. Maybe as a starting point the world can commit to locating all new facemask, ventilator, sanitiser and anti-coronavirus drug factories in Africa