The Coronavirus pandemic came at a time when Africa’s capacity to bear those exogenous shocks had already been weakened by the 2008 global financial crisis: foreign exchange reserves were lower and the twin deficits, budgets and current accounts, were higher. It interrupted Africa’s return to the economic growth path that began in 2000 after almost two decades of stagnation. As a result, what the shape of the economic recovery will be is a subject of conjecture. Indeed, to properly situate the conversation of Africa’s recovery after covid, it might be helpful to go back into its recent and not so recent economic trajectory.
During, the period between 1960 and 1980, Africa enjoyed steady growth. However, for the two decades that followed, the continent suffered a steady decline in real per capita income that erased the gains of the previous two decades. As evidence shows, over the decade of the 1990s, Africa was poorer than it was in 1970.
The period between 1980 and 1990 was called “the lost decade” due to the steep decline in per capita GDP (adjusted to purchasing power parity). That period was so bad that even later a word “Afro-pessimism” was coined.” It wasn’t until 2000 that we returned to the path of steady growth. This is what led to the “Africa Rising” narrative, which was later tempered by the impact of the global financial crisis in 2008-2009.
In the 1990s, due to Africa’s loss of geo-strategic relevance after the cold war, access to resources was problematic, and the continent became too dependent on overseas development assistance. This was somewhat reversed at the turn of the millennium as China became a major player and key economic actor in Africa. At this point, as a result of the debt dynamics, one is uncertain which trajectory Chinese investment in Africa will take given the fact that much of the new infrastructure in Africa was China facilitated.
The 1980s and 1990s was a period dominated by neoliberal economic prescriptions. The neoliberal economic policies are controversial. But that is not the subject of this article. Suffice to say that they may have prolonged Africa’s sense of loss of policy space – in other words, Africa’s ability to make its own policies. In fact, the emergence of growth in regions of the world which did not espouse the neoliberal model began to demonstrate that there are other ways to grow the economy.
With the covid pandemic stalling Africa’s growth path, the question as to whether we might be entering another lost decade deserves great attention. Therefore, it is logical to anticipate variations with regard to recovery from the covid pandemic. In other words, the recovery path will not be uniform across Africa, a mosaic of many countries with significant variations and diversity. For one thing, the distance to cover won’t be the same for every country. For another, recovery will depend on the extent of pre-covid vulnerabilities and how much damage the pandemic has caused. Moreover, internal governance dynamics will factor in the recovery. Furthermore, strong growth will not suffice because what is needed is more resilient economies that are inclusive and meaningful in terms of transformation and job creation.
Dr Kaberuka’s article in the forthcoming Pan African Review magazine addresses in detail the synergies needed for Africa’s post-Covid19 economic recovery.