The President of the Republic of Ghana perfectly captured the rhetoric essential in the fight against the Coronavirus pandemic when he stated, “We know how to bring the economy back to life. What we do not know is how to bring people back to life.”
So how exactly will the economy look like after this difficult time? There’s never a predestined image of a post-crisis economy, only speculations, and eventually, celebrations of the most accurate economists.
Hyman Minsky’s financial instability hypothesis for instance. Minsky proposed theories on financial market fragility and predicted events that could become of them. But it was not until after his death that these events eventually occurred and his predictions came to fruition.
His theory, which received belated and revived attention during the 2007-08 financial crisis, argues that the accumulation of unfettered debt by the non-government sector is a key mechanism that could plunge the economy into a crisis. And further described how stability could be destabilizing, generating the term ‘Minsky Moment’ coined by later economists.
There is perhaps a lot of empirical data from noteworthy events that we can only presume, points us to an eventuation we may or may not like. Economists generally predict outcomes based on contemporary events, or in cases like Minsky’s, constructed scenarios.
Look back to post-9/11 and how it has continued to inconvenience us to this day, Arabs in particular, having been subjected to excessive and unnecessary scrutiny while traveling. Every Arab speaking bearded man was given a potential terrorist treatment. As was the case to some extent in Nigeria after Boko Haram, as regards to Northerners, or Africans during the Ebola pandemic.
This points to a potential world where the Chinese will be subjected to similar persecution under different circumstances as already evidenced in a few viral videos or perhaps remarkably Africans (Nigerians in particular) being the victims in China.
More scrutiny measures soon followed as countries began spying on citizens and other countries alike. This included monitoring of emails, phone calls, social media footprints, and even drawing feeds through device cameras to catch a glimpse of anything relating to terrorism. A post-COVID economy could also create an obsession for acquiring health-related information by governments, be it legal or illegal. With inferior sophistication and magnitude to that of post-9/11.
An inevitable effect should be the long-overdue increase in health sector expenditure, especially in countries with poor health facilities like Nigeria. It is however unfortunate as to the circumstances that may finally lead to this deferred action.
More health inspections could also be prompted, and not only in health facilities but also in restaurants and other businesses leading to a prevalence of hand sanitizers, and prolonged use of face masks. This could also lead to a lockdown of businesses deemed below health standards. Or a lack of patronage due to the public’s overcautiousness in matters relating to health.
With increased investment in healthcare, we may be accustomed to constant health-related advertisements on social media or upon visiting every other site on the internet. And speaking of the internet, a spike in virtual learning and the utilization of online courses in a prolonged practice of social distancing.
The 2007-08 financial crisis also had lasting effects on world economies which could similarly manifest in a post-COVID economy. Perhaps the most evident would be the rise in global debt and a fall in interest rates. The IMF and World Bank will naturally serve as sanctuaries for countries. But having had a somewhat negative effect in their push for neoliberal and globalization policies, most notably in Africa and South America, countries could be wary of the effects of their association with these organizations. It does, however, seem like an ideal time to revise these policies.
In a bid to stimulate the economy by both governments and financial institutions, after what can only be hoped to be a short-lived loss of confidence in stock markets and a fall in asset prices, market distortions and higher transaction costs may emerge. Prompting endless assessments by neoclassical economists using Harberger triangles to point out caveats as to its exacerbation and effects on the real economy. And discourse either on social media or news outlets constantly uttering the words ‘quantitative easing’, ‘palliatives’ or ‘relief funds’ accompanied by pictures of and words spoken by finance heads.
After several observations, scrutiny, and warnings the economy will eventually recover. And at a pace determined by leadership, may even boom, which may or may not be a boon.
And while some of these effects may prove lasting, others will prove to be merely manifests of our vivid memories which is where is left to be seen.
But for now, stay home and stay safe.
Skills Africa needs for sustainable development
Over a billion people with 5 official working languages – Arabic, English, French, Portuguese and Swahili , will again celebrate Africa Day this year.
From Addis Ababa to Durban, Lagos to Cairo, from the Sahara Dessert to the Nile River, over a billion people with 5 official working languages – Arabic, English, French, Portuguese and Swahili – will again celebrate Africa Day this year.
A day to remember, reminisce and celebrate successes recorded against the struggles for independence, freedom from apartheid and colonization. Although, with the new normal brought about by Coronavirus, the 2020 celebrations would be quite unlike previous years.
The Africa Union (Formerly OAU) has recorded good milestones in terms of political independence and self-governance. So now is a good time for Africa to reflect on our independence.
On reading the objectives of the Africa Union (AU), words like independence, territorial integrity, human rights, security, cooperation are splattered across the pages. Significantly, none of the AU objectives seeks economic autonomy for Africa or her member states. This is a fundamental flaw which speaks directly to Africa’s issue of having a large population without the requisite skills for growth.
Our education is largely dependent on the western curriculum and narrative. There is hardly any major infrastructure, industrial or development project in Africa with 100% African content in manpower, materials or capital.
It is now well established and more evident that political independence without economic independence is like a car without an engine. Economic empowerment is the nucleus of national development. No fewer than 14 West African countries currently use CFA Franc, with some having used the currency for at least 75 years. This goes beyond nameplate as the Bank of France holds half of those countries’ currency reserves. This is effectively cutting their growth capacity by 50%.
8 of those 14 countries will relinquish the CFA franc for the new ECOWAS currency, ECO (to be launched in July 2020). However, there is no indication that the affected African leaders would ask France for compensation for the years of economic sabotage to their countries. The introduction of the ECO was to bring a ray of hope, but we hope the real difference would not just be in the colour of the currency. This is because the ECO will not be autonomous but would be pegged against the Euro.
France is not alone in the economic sabotage of Africa, they are in the good company of the United Kingdom, the US and Belgium, to mention a few. However, are these foreign countries to blame? Africa got her independence, but African leaders refuse to be independent and the dependent mentality is also enshrined in the AU objectives.
One of the AU objectives states “to work with relevant international partners in the eradication of preventable diseases and the promotion of good health on the continent.” The statement looks good superficially, but it is enlaced with aid orientation, the lack of drive for self-reliance, and a beggarly mindset.
Let us educate Africa to pursue the development of its people, with core skills that are necessary to deliver the quality of the progress and growth that Africans desire. African construction companies should make African infrastructure and 100% African content should be the target in automobile engineering, healthcare, information technology,
Necessity is said to be the mother of invention. The need for Africans to lead Africa out of poverty, tyranny and underdevelopment is a matter of great importance, far beyond just necessity. Every African must desire to get skilled, and not just education, as we currently have it. We must have the competence to develop our agriculture system, mine Africa’s natural resources and add value by processing them locally.
Africa Day would only be truly worthy of celebration when African people and countries are skilled enough to accomplish our dreams of self-reliance and economic independence.
Article written by Olatunde Akintola. Olatunde is a Fellow of the Institute of Chartered Accountant of Nigeria and alumni of Manchester Business School. He writes from Lagos.
Tiktok’s In-App revenue surges amid lockdown
ByteDance Ltd’s brainchild, TikTok, together with Douyin ranking tops globally on mobile apps with the highest revenue generated for the month of April.
The meme-making business has proven to be worth all the fuss, with TikTok, as well as its Chinese twin app, Douyin, ranking tops globally on mobile apps with the highest revenue generated for the month of April.
Sensor Tower, notes that just in the first quarter of this year, ByteDance Ltd’s brainchild, TikTok, together with Douyin which caters to the Chinese market, generated 315 million downloads globally, from the 187 million it had just a year earlier.
The ranking, which was based on their in-app purchases, reveal a tenfold increase, as the companies garnered a whopping $78 million in revenue. The Chinese market is said to have contributed 86.6% of Douyin’s revenue, followed by the U.S market which contributed 8.2%.
This places them ahead of older names like Netflix & YouTube. As opposed to using subscriptions like these established brands, TikTok and Douyin allow users to purchase virtual currency to spend on their favorite content creators.
(READ MORE: Does YouTube stand a chance against TikTok?)
While ByteDance is exploring the world of online commerce, it continues to rely on advertising as its primary income source. However, Emarketer projects that more than 75 million US social network users will make at least one purchase from a social channel in the year 2020.
Sanwo-Olu to virtually inaugurate projects as he presents scorecard of first year in office
Some of the projects to be commissioned will be done virtually, while a few will be done on-site.
Lagos state governor, Babajide Sanwo-Olu, will virtually inaugurate housing, education, and road projects on May 29, as part of activities to mark his first year in office.
According to a report by NAN, the projects are part of the government’s efforts to renew infrastructure in critical sectors and to make the commercial centre a smart city.
Some of the projects to be commissioned will be done virtually, while a few will be done on-site.
Lagos state Commissioner for Information and Strategy, Mr Gbenga Omotoso, listed some of the projects in an official statement. He said:
”In the education sector, Sanwo-Olu will conduct virtual inauguration of completed classroom blocks in Maya Secondary School, Ikorodu; Eva Adelaja Junior School, Bariga; and Saviour Primary School, Ifako-Ijaiye, among others.
“Virtual inauguration of completed works such as the Concrete Jetty in Baiyeku, Ikorodu, Aradagun-Ajido- Epeme Road in Badagry, and the Maryland Signalisation project also form part of the itinerary to commemorate the anniversary.”
Omotoso also stated that the Governor would inaugurate the 360-unit Lagos Homes in Ikorodu, and then visit Igbogbo Baiyeku IIB Estate, Lekki, and the Courtland Villas on Femi Okunnu Estate during the week.
Plans for celebrating Children’s Day
In a related development, Governor Sanwo-Olu will deliver an address on Wednesday May 27 to mark the children’s day celebration, and the 53rd anniversary of Lagos state.
Omotoso, however, noted that all celebrations would be kept on the low in reflection of the current challenges and realities of the COVID-19 pandemic.
Presenting one-year scorecards
The activities for the week are expected to begin with press briefings at J.J.T Park in Alausa on May 27, where members of the State Executive Council will present their scorecards in line with the six pillars of the state’s T.H.E.M.E.S Agenda.
According to the information commissioner, there will be two sessions of press briefings daily from May 27 to June 3, as the Governor considers it expedient to render a stewardship account of the last one year.
“Three special publications highlighting the achievements of the Babajide Sanwo-Olu administration and testimonies of beneficiaries of various initiatives of the government are slated for presentation to the public by the governor and his Deputy, Dr Obafemi Hamzat,” he added.