Rising from dark times to bright aspirations.
Recovery, the greatest goal for the struggling Sub-Saharan African economies. While in some nations more than 50 percent of the population has been fully vaccinated, in this region only 6 percent are inoculated, the lowest vaccination rate in the world at the moment. A disparity that speaks volumes about the very limited resources in various African countries, funds that can make a difference when it comes to addressing COVID-19 and its many ongoing variants.
Vulnerable to new strains of the virus, this poses a great threat to any future recovery plans. So it’s time for Africa to learn from past mistakes and embrace innovative solutions on all fronts, a mindset that is now well-positioned but badly executed.
A new outlook
Despite all the aggressive challenges, we saw outstanding examples at the start of the year; like South Africa, in which private consumption, commercial and industrial sectors showed a “faster-than expected” recovery, fostering feelings of hope that were already lost in the difficulties of the year.
But there are lots of hurdles ahead, the Delta variant derailed most of the projections, and the authorities had to raise lockdown measures to levels of higher restriction for the whole population. On the other hand, the government doubled down on the Temporary Employee/Employer Relief Scheme, negotiating wages leading to more positive directions.
In the case of Rwanda, the government is trying every measure within reach to boost the pace of immunization as industrial production dropped to 14 percent. “We totally understand that vaccines do not provide a hundred percent immunity against COVID, but it helps to prevent the severe symptoms in groundbreaking ways”, said the health minister.
With more than 10 million doses administered to 30 percent of Rwanda’s population, the country has one of the highest vaccination rates in the continent, walking steadily to the path of faster recovery.
Positive outcomes
According to experts at the World Bank, the Sub-Saharan African economy will emerge from recession to levels of growth at 3.3 percent in 2021, all due to serious ongoing
expansions within the industrial and services sector.Tremendous gains in private consumption are also expected as foreign investment will play a leading role in satisfying new demands.
A rapid pace of vaccination is needed at this very moment in order to foster any possibilities of major recovery. Those efforts are the main reason why some developed nations are enjoying high levels of growth, openness and success against the different variants of COVID-19 throughout 2021.
Ghana has managed to keep the virus from spreading lately, while providing the necessary support to the most affected households. Its exports in agriculture and heavy industry brought crucial gains to the country at the start of 2021, as it managed to serve the international demand with outstanding performance.
As oil prices surged, the same happened to Chad, Gabon and Cameroon, nations that benefited greatly from petroleum exports and the digitalization of tax and custom processes, generating more public revenue that can then be used by governments in the ambitious task of containing COVID within their borders.
Restructuring debt
The levels of public debt in Africa have increased in record breaking ways, but the scenario was very similar pre-COVID. On average, gross debt will climb up to 71 percent of the GDP across the region during 2021, a difference of 30 points in less than 10 years. Here’s when $9 billion dollars in Eurobonds come into place, with Ghana being the largest issuer of them all at $3 billion.
There’s no lie, the pandemic has been a catalyst of vulnerability in the region, more than any other factor in the last 5 years; governments and businesses know this and are working to overturn this whole situation.
One of the most critical assignments is to improve and restructure debt and the transparency of handling it, according to experts at the World Bank this will be an integral step in trying to close the wide gaps of execution and reporting. While progress is slow we can see how bilateral agreements are functioning as planned, steering the wheel towards reconstruction just like Chad did last June.
Nigerian leadership is key
When its economy grew at 5 percent during Q2 of 2021, Nigeria managed to defy expectations and surprise many skeptics. This is not only a great example of resilience and outstanding management to other African nations but also the world, as the agriculture sector grew 6.7 percent, and the service sector had an impressive boost of 9.27 percent.
The main factor behind all these impressive achievements is the integration and aggressive adoption of digital technologies to boost productivity, fostering employment opportunities for young women as the workforce gets more diversified with talent.
Recent reports indicate that economic activity in Africa will surely strengthen as more countries find innovative ways to combat the pandemic. With projections that range from 2.3 to 3.4 percent, the international community will surely have their eyes fixated upon any possible scenario for 2022, as demand for products and services will rise in parallel with peculiar investment opportunities. The ones who are willing to face the risks are taking action right now.
