African economies set to boom post COVID-19
By Emmanuel Allottey
African economies are rigorously implementing various interventions to mitigate the devastating impact of COVID-19 on the economy. These economic stimulus packages over time are expected to unleash economic recovery and transformation. COVID-19 protocols introduced such as movement restriction, extreme social distancing, lockdowns amongst others, are starting to ease off giving way to some semblance of normalised activity in the economy.
Recent World Bank reports indicate that economic activity in Sub Saharan Africa is on course to contract by 2.8% in 2020. This is an aggregated average, with sharper deterioration in individual African states. The extent of the downturn could effectively erode the years of progress made towards achievement of national development goals. The negative impact of COVID 19 are short-term with expectations of return to economic growth in 2021.
Monetary and fiscal policies introduced such as reduction in lending rates to stimulate spending will translate to increased affordability for those who survive business collapse, redundancy and unemployment relating to COVID-19. Increased affordability for Businesses will create room for expansionary spending such as new distribution outlets, new jobs, increased stock levels, empowering the business ecosystem both upstream and downstream.
Greater collaboration between the public & private sectors is set to continue post COVID-19. Public private partnerships is a key strategic lever that drives the required synergy to create sustainable and innovative economic growth. The increased contribution from private sector to the achievement of national development goals will hasten the return to national competitiveness and output growth.
Essential services, local businesses, high growth industries and sectors of the economy that were facing a decline are now being resuscitated. Local manufacturing that drives organic growth in a nation is set to become a major beneficiary of capital injection by government. Government focus on unemployment particularly facing the youth will lead to the required interventions to facilitate an innovative entrepreneurship mindset among the upcoming generation. the impact of COVID-19 on international trade, tourism and other sectors of the economy have led to nations reviewing their economic diversification strategy and levers for national growth.
African nations are developing coordinated strategic and in-depth approaches to human development, regional integration, digitalization, industrialization, economic diversification, fiscal and monetary policies, and international solidarity. In short, they are rethinking the causes of the continent’s underdevelopment and coming up with feasible solutions. The outcomes will undoubtedly be good for Africa and for all humanity.