By Ayo Akinfe
(1) I am not sure Africans are fully appreciating the economic consequences of this global pandemic but I can assure them that its effects will linger for at least another 10 years as global output must have at least halved over the last two months
(2) Just to put everything into context, the UK believes its economy will shrink by about 35% this year, while in Germany, it is estimated that the economic shutdown has cost the country about $150bn
(3) In the past, when Africa has had economic crises, her leaders have called for international support, demanding some sort of Marshal Plan to bail the continent out. Well, that is simply not an option right now as the rest of the world is also on recession, so is in no position to help anyone
(4) Yesterday, I read of how the World Bank is preparing a $510bn assistance package over three years for Africa. Now, I am not sure if this is a loan or a grant but even then, it only scratches the surface. Unless it is used to boost industrial capacity, after three years when the money finishes, we will be back to square one
(5) If you want a picture of how precarious Africa’s plight is, look at industrial figures pre-coronavirus. As a continent, we only accounted for 3% of world trade and I suspect that would have at least halved by now
(6) What makes African economies particularly vulnerable is that they are wholly dependent on exporting primary commodities. When nobody is interested in buying your crude oil, gold, diamonds, bauxite, palm oil, cocoa, cassava, tin, copper, gum arabic, uranium, cotton, etc, how do you recover? At the moment, there are huge stockpiles of all these commodities sitting idle and it will take maybe about two years to clear them
(7) Too many of Africa’s 54 countries are hopelessly incapacitated to even begin contemplating economic recovery. If Niger Republic cannot sell her uranium, she will starve to death. Likewise, if Benin Republic cannot sell her cotton, the bony hand of hunger will decimate her population
(8) The last time the world faced a crisis this severe was in 1929 when the Wall Street Crash paralysed the economies of Europe and the US. As we all know, this led to the rise of fascist regimes in countries like Germany and Italy, with Hitler and Mussolini dragging the world into a six year war. Make no mistake about it, with the impending crisis, extremist governments will fill the vacuum across Africa
(9) If you look back at how the 1929 Wall Street Crash paralysed the Japanese economy, you can see why they decided to colonise all their neighbours and plunder their resources. Africa has resources but no economy, so it is only logical that someone will plunder them post-coronavirus unless these economies are consolidated and protected by a strong government
(10) For me, Nigeria has got to lead the way with this African consolidation with the creation of an economic powerhouse. I want to see Nigeria merge with Benin Republic, Cameroon and Niger Republic to create a colossus called Songhai that will at least give us a fighting chance. All these pseudo economies with GDPs of $1bn simply have to give way for more competitive entities
