Despite grim forecasts, pandemic could spell opportunity for change in Africa
By María Rodríguez and Irene Escudero
Dakar/Nairobi, May 14 (efe-epa).- African economies have been hammered by the coronavirus pandemic and both the World Bank and International Monetary Fund predict a recession and an unprecedented crisis.
Despite the gloomy outlook several African economists think this is a unique opportunity to face the debt the continent is mired in and challenge the policies imposed by the WB and IMF which have crippled economies.
The WB predicts a 2.1 to 5.1 percent decline in 2020 and Africa’s first recession in the last 25 years.
The IMF has warned the continent will face an unprecedented economic and health crisis with a 1.6 percent drop this year.
According to Senegalese economist Ndongo Samba Sylla, the IMF has made very optimistic forecasts given “nobody knows what may happen”.
Of the 30 fastest growing economies in the world 16 are African and half of the continent’s population lives in a country where the economy grew above five percent, according to the IMF.
This growth has been fuelled by the price of raw materials and relative political stability since the early 2000s but many experts say the wealth is not being adequately distributed.
“Even in a country with six percent growth since 2012 the majority of the population does not live well and surveys show that 52 percent of households do not have access to either water or soap,” Sylla says about Senegal.
Kenyan economist Crystal Simeoni warns Efe: “Our GDP has been rising in tandem with our inequality.
“So it begins to bring up questions around growth for who? People definitely find it harder and harder to put food on the table to survive.”
Africa’s growth will inevitably slow as it is highly dependent on exports of raw materials like minerals, cocoa, coffee and oil.
Nigeria, Africa’s number one oil producer, has registered an 80 percent loss in crude oil revenue as a result of a drop in demand and slump in prices.
Carlos Lopes, high representative of the African Union for Europe, tells Efe: “There are 35 African countries that are in the ‘highly dependent on raw materials’ category.
“That means that at least 80 percent of their exports come from raw materials.
“They are going to see a brutal reduction in export earnings.”
The crisis will batter the continent more than other parts of the world because Africa cannot determine its monetary policies.
“When there is a crisis in Europe, the European Central Bank can decide that interest rates are zero percent or negative. Africans do not have this luxury,” the Guinean expert adds.
Among measures put forward by the WB and IMF to lessen the economic shock is the immediate debt relief of bilateral creditors.
But the debt interest moratorium only applies to 19 African countries.