In The Fortunes of Africa, author Martin Meredith describes a Dutch sailing ship that dropped off a load of laundry for the Khoikhoi, the local inhabitants of the southwestern cape of Africa whom Europeans called Hottentots. The year was 1713. The Khoikhoi washed the laundry and were duly paid, but it was carrying smallpox. Over the next year, the community was laid to waste. Nine out of 10 Khoikhoi died, and the tribe eventually disappeared from the Cape.
Once again, a foreign pathogen is threatening Africa.
The full impact of COVID-19 would be felt there later than in the rest of the world, but the financial markets have already exacted their toll. Even before the virus has made much headway on the continent, African currencies, sovereign debt and public equities have fallen dramatically, in many cases experiencing losses far greater than in developed or other developing and emerging markets.
The impact on African equity markets has already been worse than in the depths of the global financial crisis.
However, if managed properly, the pandemic might prove to be a loud hiccup on the way to realizing the “African century.” As an investor and philanthropist in Africa for more than a decade, I have been focused on the unparalleled opportunity that the continent represents.
As former South African president Thabo Mbeki put it in his 1999 victory speech: “The people of our country have given an unequivocal directive that we must work together for the African renaissance, for the emergence of the 21st century as the African century.”
Strong underlying growth, attractive demographic trends, improved governance, stability and transparency imply enormous opportunity over the long run, with the potential for tens of millions to be lifted out of poverty.
Africa’s population, growing at 2.5 percent per year (about twice the pace of India), is expected almost to double within the next 30 years. By the end of this century, Africa would surpass Asia in the number of working-age adults.
With this growth come challenges. Millions of able-bodied African young people require education, jobs, housing, healthcare and other social goods that their countries today are largely unable to provide.
While the coming youth bulge holds great promise, it could jeopardize geopolitical stability if it is mishandled. A generation of undereducated, underemployed and economically frustrated youth is a powder keg that could disrupt societies not just in Africa, but across the globe.
COVID-19 would interrupt the African century in the short term. Lockdown enforcement might cause social unrest. Already, there have been protests and near-riots in Nairobi, Johannesburg and elsewhere.
Lockdowns in large African cities are not the same as in China, Italy or the US. Housing settlements are informal and population densities are higher. Food and other essentials must be bought and consumed daily — often from open-air markets and kiosks, with cash earned the same day.
Social distancing is impossible when five or more household members are sleeping in a single, poorly ventilated room. Washing hands frequently is difficult when water has to be fetched from an unprotected community source down the road.
Hunger speaks louder than government edicts. Most African workers are involved in primary agriculture and must be able to plant, harvest and process their crops. After all, there is no point in living now only to starve later.
African leaders would continue to look abroad for support. Many African governments, having tilted easily and early to the Chinese sphere of influence, have begun seeking alternatives elsewhere. However, China would seek to capitalize on the crisis.
For example, China would offer financial, medical and other assistance, as it has with Italy. China’s aggressive and decisive actions to combat the pandemic at home would be seen by many as a paradigm for Africa, given Europe and the US’ disjointed and inept responses so far.
Yet, Africa could emerge from the pandemic with less lasting damage than many fear. Leaders have learned important lessons from epidemics, notably Ebola.
Warm climates, a mostly young and rural population, and lower rates of regional travel might slow the spread of the virus and hold down its mortality rate.
African institutions are too frail and under-resourced to cope with the pandemic and its economic fallout, and the continent’s medical systems are woefully unprepared.
Still, financial and institutional support from Europe and the US would help mitigate the harm, particularly if solutions focus on delivering much-needed education, supplies and infrastructure to where the needs are greatest.
In order to realize the promise of the African century in the not-too-distant future, African countries cannot do it alone. As Ghanaian Minister of Finance Ken Ofori-Atta recently told the Financial Times, this is “a break the glass moment” for the continent — an emergency in which international actors need to take drastic action if the world’s poorest region is to avoid a human and economic catastrophe.
Recognizing Africa’s unique population, circumstances and geopolitical significance is essential.
The world cannot permit COVID-19 to halt Africa’s progress. The continent’s leaders and its developed-country partners can and must contain the pandemic. The Khoikhoi’s fate is a warning. It must not become a prologue.
Michael Wilkerson is chief executive of Fairfax Africa Holdings Corp and board chairman of Atlas Mara.
Copyright: Project Syndicate
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