The IMF report of June 2020 on Sub-Sahara Africa (SSA), has revealed a 3,2 percent contraction of economies in SSA for the period 2020-2021 a serious hike from the 1,6 percent projection estimated in April 2020.
The containment measures ranging from lockdowns to closure of borders reduced economic activity in countries negatively affecting economies of Sub Sahara Africa.
Remittances mainly from Europe and US to Africa have drastically been disrupted. World Tourism Council revealed that in 2018 alone, Africa received inflows amounting to US$194,2 billion representing 8,5 percent of the continent’s GDP.
The IMF report reveals that US$47 billion inflow of remittances was recorded in the year 2019. However, in the period under review remittances will decline by 20 percent. It is important to note that remittances inflow to the Sub Sahara Africa are a major source of foreign currency exceeding FDI and other official sources of foreign currency says the report.
The tourism sector is one of the sectors that has been worst affected resulting in massive jobs losses within the hospitality industry.
The situation has been further exacerbated by the looming threat of the return of the coronavirus as countries try to recover from the effects of the pandemic.
While the resurgence of the virus is real, it has not stopped countries to focus beyond Covid-19 period. To mitigate against debilitating economies due to the pandemic, most countries in Sub-Saharan Africa are easing Covid-19 restrictions cautiously with the aim to stimulate domestic demand ahead of other strategies to revive the economies.
Most economies in Africa cannot sustain lockdowns any longer due to the economic statuses that prevailed before the onset of Covid-19. Africa’s economies have been weakened by several factors ranging from drought to endemic disease like malaria, HIV and Ebola.
The postponement of the AfCFTA presents Africa with a window period to retool and embrace economic reforms that will turnaround the economies for the better.
Covid-19 has undoubtedly made certain skills redundant and enhanced the uptake of technology and the use of it as the new normal.
The new normal that Africa faces will be to scale up Africa intra-regional trade. Trade will dovetail with the Fourth Industrial Revolution leading to new business models.
The Fourth Industrial Revolution, while crucial will not take off without a supportive ecosystem.
The ecosystem should comprise MSME, private sector, and academia to address the inherent disconnect between supply and demand. The new skills must be able to feed into industries.
On the onset of Covid-19, Zimbabwe mobilised funds for universities to spearhead the manufacturing of sanitisers and face masks. This initiative fostered innovation an attribute that will be sorted post Covid-19.
Furthermore, the role of technical vocational education and training cannot over emphasise in creating new skills that the new normal will demand of countries.
The IMF has postulated that the pandemic will wipe out 10 years of socio- economic development.
It means the advancement towards gender equality will be reversed with more women being engulfed by poverty.
Statistics and recent literature has revealed of how severely Covid-19 affected the informal sector. Notwithstanding the acceleration of its infections, the informal sector should be enabled to grow beyond the survival strategy and be the centre of economic transformation.
Innovation is commonly found within this sector. It therefore requires proper regulation and protection from governments. Regulation will result in the creation of increased productive economic activity especially in the context of AfCFTA, inclusive economic growth and an enlarged tax base enabling government provision of public goods.
Finally, for countries to embrace the new normal, wide multi-stakeholders’ consultation will be highly valuable.
These consultations should lead to a social contract that will see governments, businesses and citizenry move as a single entity in embracing the new normal.