Tuesday 21 April 2020

The Economic Battleground Of The Coronavirus War In Africa


















On the front-line, in the fight against the corona virus in Africa, many health-care givers have been infected with the virus and some have paid the ultimate price of death in the defense of the African hinterland against an invincible enemy which we have been made to believe is vicious and lethal. This has been the same story in other parts of the world, and I would like to join humanity to express my immense gratitude to all health workers risking their lives and working around the clock at these crucial and challenging times in the history of mankind.

However we need to give accolades to additional combatant units also engaging this atrocious virus and the vicious invincible enemy which has taking mankind by the jugular, without plans of letting go. As we battle the virus we are also fighting fear, despair and cruel despots; men who are taking advantage of our collective misery to expand their individual gains and unreasonable aspirations.

In Africa, the lock-down of major cities persists and economic activities have been crippled to enormous extents. Majority of the African population have been pushed into an economic warfare and a race for survival. The sources of income of most people in urban and rural areas in Africa are closed and the individual financial responsibilities are creating concerns as they continue without any reasonable palliative or subsidies from government.

A great percentage of the African hinterland is a subsistence economy of farmers, artisans and small scale producers. The informal economic sectors are way larger than the formal economy. Even though in the last two decades  positive advances in financial inclusions and growth of the formal economic sectors, the informal economic sector accounts for over 75% of all employment on the continent.

The priorities of African governments and policy makers of the global community should be methodologies to cushion the effects of the extensive economic lock-downs. It is the responsibilities of African governments to protect the vulnerable from the absolute impact of the crisis and also to offer basic services to people who are quarantined.
  
It is obvious that African countries do not have equal financial capacities compared with more developed countries in Europe, Asia and America to offer extensive financial and economic palliatives to alleviate the impact of the pandemic. The wealthier countries have a wider range of policy options for allocating palliatives and income substitution to residents of their countries. However since most African countries do not have the financial muscle to substitute lost incomes, there must be an alternative option to alleviate living conditions of vulnerable people from government imposed economic and social restrictions.

The majority of Africans live in pseudo - urban and unadorned rural settlements that are deprived of basic amenities like access to portable water, constant electricity, basic healthcare and many facilities and amenities for a suitable standard of living. It is therefore obvious that in normal times most of African communities are already in a broken state and therefore it would be cruel to lock-down this communities without making a functional plan for some forms of income substitution and social protection programs.   
     
Sadly the main tool for the enforcement of the lock-down in most parts of Africa is the use of brutal force. This approach is the cheapest but with very heavy costs. The risks of this approach are very high as we have seen in many instances across the continent. For example Nigeria has lost more people to police brutality while enforcing the lock-down than it has from the coronavirus. 

The South African police are investigating at least 50 cases of unlawful police action during this lock-down season which includes at least 10 deaths. Kenya police have killed more than 12 people by direct actions of brutality while enforcing restrictions. Much more have died as a result of the curfew and the fear that the police force pedals.

The response to social welfare and stimulus to coronavirus related restrictions and lock-downs across different places in Africa has been wide-ranging and diverse. It has been exemplary in some countries and in other countries it’s been deplorable. In Rwanda a social protection plan is been implemented which includes food delivery to over 20 thousand households. Even though this is not enough to adequately compensate people for the interruption of their regular economic activities and tackle food insecurity during this coronavirus lock-down.
  
It is commendable as a positive action that can grow further. In Tunisia the government is distributing 450 million dinars, about 155 million US dollars in financial aid to poor families and Tunisians who have lost their jobs due to the corona virus pandemic. Ghana who is the first African country to loosen economic and social restrictions has deployed 1.2 billion Ghanaian Cedis, about 210 million US dollars to cushion the effects of the virus on households and businesses, out of which 280 million Ghanaian Cedis, about 49 million US dollars is been used to provide food and water. The Ghanaian government is also subsidizing electricity bills by as much as 50% in some cases.

There have also been massive donations by individuals, corporate organizations, and Churches to governments and sometimes directly to the vulnerable and the mostly affected by the economic and social restrictions that is common with the corona virus pandemic. These donations raise another set of concerns especially in cases where it was donated through governments. There are suspicions that most of these donations have been transferred to private wallets and cronies of political office holders. 

These suspicions could be assumptions in a lot of cases and it could also have some grounds of proof as we saw in the case of a Nigerian Senator who alleged that the committee set-up to distribute palliatives to Nigerians was only distributing the relief funds amongst themselves. The authorities have denied these allegations and even called the senator a discontented politician. However the burden of proof lies with the Nigerian authorities to explain how 100 billion Naira, about 263 million US dollars was distributed through a method where receipts of funds cannot be verified.    
  
It’s an act of irresponsibility for any government to impose economic and social restrictions without making provisions to absorb a fraction of the impact the restrictions would have on the residents. African governments should have been proactive to initiate palliative regimes that would have stopped rents, interest, penalties and utility bill payments to cushion the effects of the lock-down. 

The major concerns of our collective humanity in times of great agony are essentials of life such as food, water and medicine and in times like this any demands from creditors of payments of interests or penalties and rents is also a great concern to our humanity. It’s an issue of great concern that demands from creditors are not going on holiday when economic activities are stalled

No comments:

Post a Comment

Where Are African Currencies Headed After The Coronavirus Pandemic?

I n modern times, the different waves of economic crisis have blown similar torrents. Initially, the crisis begins with huge uncertain...