Time to activate Africa’s idle magnetic force (5)
Dr. Oyeleye, a consultant, journalist and policy analyst, can be reached via:
August 3, 2020920 views0 comments
THE COINAGE ‘NEW NORMAL’ has gained a global currency during this global Coronavirus pandemic more than at any other time since its emergence in a period of over a decade. It is an expression that, in the present circumstance, was meant to convey a contemporary and futuristic idea of the sea change expected to be prevalent after the dust of the pandemic has settled. The “new normal,” which began to filter into public discourse was given expression by Mohamed El-Erian, who chaired President Obama’s Global Development Council, and is now the chief economic adviser at Allianz, an international financial services provider. It was construed as a state to which an economy or society settles following an emergency, when the new one varies from what prevailed before the onset of the emergency. The term arose from a concern that economic pundits and policy experts might give misleading reassurance that industrial economies would return to pre-2007/2008 status after the financial crisis.
El-Erian, who was not convinced that the status quo would return, had to emphasise that a new normal would emerge. This time, his new normal was different from the one envisioned by Paul Glover, an activist who had earlier enunciated “new normals” in the context of anticipated positive changes in community development. El-Erian, in a 2010 Per Jacobsson lecture, titled “Navigating the New Normal in Industrial Countries,” had stated that the use of the term under that circumstance “was an attempt to move the discussion beyond the notion that the crisis was a mere flesh wound,” but rather to emphasise that “the crisis cut to the bone,” in this case manifesting as “anything but normal.” The relevance of the new normal for Africa is consistent with the views El-Erian expressed some days ago about small businesses in the wake of Coronavirus pandemic. What applies to one country applies to others within this purview. According to him, the downtime on the door of a small business is obvious as the pain and suffering for employees of small businesses are intense.
Although African countries share common denominators of poor economies, de-industrialisation, foreign exchange challenges and infrastructural challenges that hamper economic recovery and resilience, differences in country experiences would warrant a robust platform for knowledge sharing to help countries overcome the challenges posed by the Coronavirus. While most African countries’ economies depend on commodities exports, the variations in the types of commodities and the challenges of immediate resumption in export trade necessitate a broad-based platform for helping countries to stabilise. Bearing in mind the additional crises some countries have had to go through, every needed support must come in handy and early. The East African countries that had the combined tragedy of locust invasion and flooding need to be assisted to get back to business in agriculture and food production.
Ghana, Cote d’Ivoire and Cameroon, three countries from Western/Central Africa, are major banana exporters into the European market. The Coronavirus-inspired lockdown had dealt a terrible blow to their prospects of exporting bananas due to supply chain disruption that is yet to be fully restored. This reality began unfolding while the disruptive impacts of Brexit on Africa’s commodity exports into Europe were being contemplated. Kenya’s tea and fresh flowers are other victims of such disruptions, with revenue losses in the order of millions of dollars and the impacts on organised farm jobs. The African Union (AU) through New Partnership for Africa’s Development (NEPAD), African Continental Free Trade Agreement or any other Pan-African socio-economic or political platform will be just as relevant in promoting the projects of economic revival across the continent at this critical time.
It is remarkable that Africa remains so backward when other countries of the world make headway at the expense of the continent. France, one of the leading nations in the energy sector, depends so much on the impoverished Niger Republic for much of the uranium for generating the nuclear energy, which provides France about 60 per cent of its total energy needs. Yet, Niger buys electricity from neighbouring Nigeria. Elegant cell phones and trendy electric cars are becoming near ubiquitous, and seen as products capable of great wealth creation. Electric cars are praised for their environmental friendliness and potential for slowing down climate change. But they run on main components, coming mainly from Africa. Half of the world’s cobalt comes from the Democratic Republic of Congo. Yet people and environment are paying heavily for this exponential tech growth as thousands of adults and children working in cobalt mines in DR Congo receive less than $2 daily wage.
The new normal will widen the existing gaps between the industrialised countries and those dependent on commodity exchange. Increasingly, the latter may operate at greater disadvantage and weak bargaining position except and until something significant is done to correct the anomaly. Economies that thrive on ‘capitalism without capital’ (borrowing the term of Stian Westlake and Jonathan Haskel) will continue to grow exponentially while those driven by commodities will continue on incremental basis. Africa needs to change this in the new normal. Narratives on ‘green economies’ will need to give prominence to the predicaments of weaker stakeholders in the value chains involved and protocols for protecting them from continued loss at the expense of end product manufacturers. With particular reference to extractive industries in the ‘green economy’ value chains, a “Congo Strategy” needs to evolve. This is not necessarily restricted to the DR Congo experience, but using DR Congo as an archetype.
The $100 billion dollars chocolate industry is mostly European, but the source of most of the raw materials is African, holding the short end of the stick, with revenues that are just a fraction of the earnings from the final products. Cocoa is mainly traded on London and New York’s stock markets. Yet, no less than 70 per cent of the world’s cocoa beans come from four West African countries of Cameroon, Ghana, Cote d’Ivoire and Nigeria, with Cote d’Ivoire and Ghana producing more than half of the world´s cocoa. In an opaque business dominated by a cartel at the end market, the future of Africa’s cocoa hangs precariously in the balance as the primary producers still remain short-changed in the distribution of wealth from the cocoa business. Producer countries of Africa and South America have not been able to agree on a formidable common front to press their case on the global front. The entire industry has been mostly steered by stakeholders from outside Africa and South America. A case was once made in Nigeria for COPEC, an acronym for Cocoa Producing and Exporting Countries – an equivalent of the global petroleum cartel. If all the African producer countries have agreed on terms, perhaps this would have been a game changer for the continent’s cocoa industry.
This sort of leadership transformation in Africa may become the beginning of Africa’s liberation and economic freedom. It makes no moral sense for a continent to remain at the bottom of the ladder while providing a springboard for other economies to grow and thrive. African solutions must begin to be provided for Africa’s problems in ways that would provide for competitiveness, innovativeness and sustainable economies. These must create conducive environments for the achievement of all the Sustainable Development Goals of the global 2030 Agenda. Some forms of regional specialisations have evolved globally. The US, UK and Hong Kong have emerged as the global financial hubs. China and Dubai have emerged as global Maritime hubs. Spain and many Caribbean countries have become veritable tourism hubs. It is time to determine what African countries are good at becoming. It is time to expand the tourism frontiers of Africa beyond Kenya, Morocco, Senegal and South Africa, and modify the modus operandi to suit the new normal for relevance and profitability. Other sectors where Africa can be big players need to be urgently developed for job creation and economic development.
The continent has to move at speeds hitherto unprecedented. As the new normal will make countries and continents of the world to look more inwards, Africa cannot afford to be an exception. Everything that the continent needs has been provided. Africa has natural and human resources in abundance. It is time to tap into them for the good of the continent. Africa can become one of the leading economies of the world post-COVID-19, depending on how the barometers are set and what directions the countries of the continent are led. The new normal will produce winners and losers. What becomes of Africa henceforth will be determined by the continent’s handling of the new normal now and in the near future. Countries outside Africa may try some handholding, but that will achieve little if Africa is not ready to move forward. So, the change that would move Africa forward must originate from within. The new normal has provided the basis upon which appropriate responses must be based. Let the work begin without delay. Africa must become first among equals in the coming years. The future starts now.