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Coronavirus

COVID-19: Could Africa’s Awakening be the Silver Lining?

While the wealthy countries are mobilising hundreds of billions of dollars in stimulus packages, most of the world’s poor nations essentially do not have the fiscal space to do much besides hope and ask for relief.

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CBN, THE SILVER LININGS OF COVID-19

COVID-19 is a rude awakening for the world. It has catapulted us into a health and an economic crisis that is affecting not only the poor but also the rich. The inconvenient pandemic has laid bare for the world to see the underlying problems of the global economic paradigm. It highlights the unsustainability of the current systems and the need for change – from the US with the biggest economy, to the smallest most fragile economies in Africa.

Sadly, this is not news. It was not a secret that the current economic system was not working for the majority of the planet; the dominant paradigm was simply unquestionable. However, now faced with a shared crisis on a global scale, the impact – as with every other challenge – will be felt more by the majority poor. And while the pandemic has been problematic for all, it comes with the very real and frightening potential for a systemic meltdown in Africa. Indeed, as that Anon WhatsApp, that’s been doing the rounds says: we may be in the same storm, but we are not in the same boat.

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The good news is that questions are now a fair game about the system that has left a sizable share of the global population on their knees even in good times. A system that has also been choking our planet. And respected opinion-makers around the world – including Africans – have indeed been calling for change.
So now here we are. In response to the pandemic, many countries and international institutions have moved rapidly to adopt counter-cyclical measures to provide stimulus to the economy. The US approved two programs worth over 2.6 trillion dollars combined. International institutions are announcing programs for immediate relief and plans for additional financing that will help countries return back to scale.

READ MORE: Nigeria’s External Reserves plunge to $40.3 billion as devaluation concerns brew

While the wealthy countries are mobilising hundreds of billions of dollars in stimulus packages, most of the world’s poor nations essentially do not have the fiscal space to do much besides hope and ask for relief. The result is that many are now calling for a moratorium on debt repayments, but this is temporary relief. The debt will still have to be paid and for many African countries, more and more, the debts are owed to the private sector. While some are calling for increased aid, others are calling for China to pay reparations to African countries. Many intellectuals of African descent have signed a public letter calling for change with a focus on the need for African governments to invest in the people, end corruption and aim for second independence.

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Though these are all good ideas and will likely help, they are not enough. In essence, everyone is drawing from their usual arsenal of arguments and instruments to suggest the means to “recover” from this pandemic. It is a view of the epidemic as an interruption rather than as a surprise, even though gruesome, game changer. Even though we do not recognise this as the answer to the prayer we have been making on the need for transformation to deal with chronic poverty, the growing inequality, unsustainability and climate disaster, this pandemic might yet lead us towards positive economic transformation if there were such a thing. It could be the opportunity to confront our demons and perhaps shift trajectory; something we had come to believe is impossible because of our unbridled capitalist holy grail.

READ ALSO: COVID-19: Take-off of Africa Free Trade Zone “AFCFTA” Postponed

Our conviction is therefore that none of these well-meaning interventions is the long term solutions. Even if all the debts were magically cancelled, without changes in the underlying conditions (both global and national) our countries would likely just get into debt again soon. For example, Nigeria’s external debt stood at about $36 billion at the end of 2004. Negotiations with the Paris Club in 2005 yielded debt relief and with payments by the government, Nigeria’s external debt declined to about $3.5 billion in 2006. Today, Nigeria’s external debt has reached over $27.6 billion and debt service has become the biggest item in the budget, requiring over 50% of foreign earnings.

We are not arguing against aid or reparations; this is a time in which the developing world needs all the support and redress possible. However, we must view these as temporary and residual measures. They should happen, but they are not going to bring about the transformation humanity needs.
It is time to break out of this illusion of a box. The problem is not only African; it is a global challenge. No amount of tinkering at the edges without a fundamental shift will solve the underlying problems. After all, Africa was being hailed as rising! Yet just one virus and we are facing a potential economic collapse in Africa and many parts of the world? And the long lines in many US cities for free meals at food banks is an indication that precarity is not limited to the developing world. We cannot and must not continue to produce a few billionaires in return for millions living on the edge. The current economic system is and has been failing humanity.

The question has often been asked what Africa may have to offer the world from her creativity, cultures and wisdom, partly because Africa has seemed less far gone, so to speak, in terms of being entrenched in global capitalism and hyperbole. Yet it has also been difficult to take Africa seriously when constantly on the backfoot – patronised and infantilised – in part because our leaders circle the globe with begging bowls and promises on one hand, while on the other hand, our elites are siphoning our commonwealth into private accounts overseas. But the times have become urgent, and the needs globally mutual.

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READ MORE: Nigeria considers request for debt relief as debt stock climbs

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For once, our underdevelopment and exclusion spell not only precarity but also opportunity. Our prevalence of and comfort with alternative and informal ways may not be simply dismissed as backwardness and fragility, but rather read as the seeds for resilience, new models, and better growth paths. Perhaps we finally have – albeit in strange costume – the level playing field in the realm of ideas about how to better organize our future economies.
And yes, Africa is willing and able to lead in finding ideas. In fact, we are proposing a project to do just that. We are launching a project on reimagining economies around the world, starting in Africa. The project boldly calls for a real reset and invites a much more radical, imaginative exploration of new economic foundations, principles, shapes, structures and systems. The goal is to design and propose to the world new socio-economic systems that are more inclusive, sustainable, and just.

There will be no investment in what has been, no holy cows. A venture of imagination to redefine and expand the economic menu is what is called for. We will explore multiple answers and approaches, pushing to think beyond the current paradigms, to imagine a new world with novel ethos. It will require new imaginaries, new processes of engagement, new institutional configurations and methods, new eco-logics, and boundless horizons. Will the world welcome and support this potential silver lining?

For us, it comes to this: It is time to break free from our limited appetites for new thinking and imaginations. The fact is “the time is never right”. But there is no better time than now. We are all finally humbled to the point of vulnerability. Nobody knows any better than the other. It is therefore crucial that we seize this opportunity to seek new thinking and new ideas. The world needs everyone to contribute their ideas and innovations. We might as well get started in Africa!

 

Article written by Olugbenga Adesida,  co-founder of The Africa Innovation Summit and co-founder of Bonako, a tech company based in Cabo Verde. and Geci Karuri-Sebina, co-founder of the Southern Africa Node of the Millennium Project and a visiting research fellow at the University of Witwatersrand in South Africa

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2 Comments

2 Comments

  1. Olawaleking

    May 13, 2020 at 12:23 am

    What Nigeria should now is to invest in Agriculture and the youth because we are the leads of tomorrow and Nigeria’s should stop valuing the valuing the White country. Government should look inward and do something different for Nigerians and God bless us.

  2. Kalu oji idika

    May 14, 2020 at 12:11 pm

    Erudite and well packaged write up but Africa need a new leadership breed who are conduit for internalisation of development. The lesson of the pandemic is do it yourself and do not depend on others instead of external help.

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Coronavirus

Covid-19 Update in Nigeria

On the 25th of May 2020, 229 new confirmed cases and 7 deaths were recorded in Nigeria bringing the total confirmed cases recorded in the country to 8,068.

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COVID-19: FCMB reschedule operations

The spread of novel Corona Virus Disease (COVID-19) in Nigeria has continued to rise rapidly as the latest statistics provided by the Nigeria Centre for Disease Control revealed Nigeria now has 8,068 confirmed cases.

On the 25th of May 2020, 229 new confirmed cases and 7 deaths were recorded in Nigeria.

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To date, 8068 cases have been confirmed, 2311 cases have been discharged and 233 deaths have been recorded in 34 states and the Federal Capital Territory having carried out 45,683 tests.

The 229 new cases were reported from 15 states- Lagos (90), Katsina (27), Imo (26), Kano (23), FCT (14), Plateau (12), Ogun (9), Delta (7), Borno (5), Rivers (5), Oyo (4), Gombe (3), Osun (2), Anambra (1), Bayelsa (1).

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

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In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4.

The latest numbers bring Lagos state total confirmed cases to 3595, followed by Kano (919), Abuja at 519, Katsina (335), Borno (255), Oyo (244), Jigawa (241), Ogun (240), Bauchi (232), Edo (191), Kaduna (189),  Gombe (148),  Rivers (121), Sokoto (116), Plateau (95).

Kwara State has recorded 79 cases, Zamfara (76), Yobe (47), Delta and Nasarawa (46), Osun (44), Ebonyi and Imo (33), Kebbi (32), Niger (28), Adamawa (27), Akwa Ibom (24), Ondo (23), Ekiti (20), Taraba and Enugu (18), Bayelsa (12), Anambra (10), Abia (7), while Benue state has recorded 5 cases.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

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DateConfirmed caseNew casesTotal deathsNew deathsTotal recoveryActive casesCritical cases
May 25, 202080682292337231155247
May 24, 202078393132265226353607
May 23, 202075262652210217451317
May 22, 2020726124522110200750337
May 21, 2020701633921111190748987
May 20, 202066772842008184046377
May 19, 202064012261921173444757
May 18, 202061752161919164443407
May 17, 202059593881826159441837
May 16, 202056211761765147239737
May 15, 202054452881713132039544
May 14, 202051621931683118038154
May 13, 202049711841646107037374
May 12, 20204787146158695936704
May 11, 202046412421521090235894
May 10, 202043992481421777834794
May 9, 202041512391271174532784
May 8, 202039123861181067931154
May 7, 20203526381108460128184
May 6, 20203145195104553425071
May 5, 2020295014899548123704
May 4, 2020280224594641722912
May 3, 2020255817088240020702
May 2, 20202388220861735119522
May 1, 20202170238691035117512
April 30, 2020193220459731715562
April 29, 2020172819652730713692
April 28, 2020153219545425512322
April 27, 20201337644102559942
April 26, 20201273914152399942
April 25, 20201182873632229252
April 24, 202010951143312088552
April 23, 20209811083231977532
April 22, 2020873912931976482
April 21, 20207821172631975602
April 20, 2020665382311884662
April 19, 2020627862221704362
April 18, 2020541482021663562
April 17, 2020493511841593172
April 16, 2020442351311522772
April 15, 2020407341211282672
April 14, 202037330111992632
April 13, 202034320100912422
April 12, 20203235100852282
April 11, 202031813103702382
April 10, 20203051770582402
April 9, 20202881471512302
April 8, 20202742260442262
April 7, 20202541661442042
April 6, 2020238650351982
April 5, 20202321851331942
April 4, 2020214540251850
April 3, 20202092542251800
April 2, 20201841020201620
April 1, 2020174352091630
March 31, 202013982091280
March 30, 2020131202181210
March 29, 2020111221031070
March 28, 20208919103850
March 27, 2020705103660
March 26, 20206514102620
March 25, 2020517102480
March 24, 2020444102410
March 23, 20204010112370
March 22, 2020308002280
March 21, 20202210001210
March 20, 2020124001110
March 19, 20208000170
March 18, 20208500170
March 17, 20203100030
March 16, 20202000020
March 15, 20202000020
March 14, 20202000020
March 13, 20202000020
March 12, 20202000020
March 11, 20202000020
March 10, 20202000020
March 9, 20202100020
March 8, 20201000010
March 7, 20201000010
March 6, 20201000010
March 5, 20201000010
March 4, 20201000010
March 3, 20201000010
March 2, 20201000010
March 1, 20201000010
February 29, 20201000010
February 28, 20201100010

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Julius Berger reduces dividend payout to prepare for COVID-19 hit

To prepare for the storm of the COVID-19 induced economic challenge, Julius Berger slashed its dividend to be paid, amongst other cost-cutting measures.

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Julius Berger, Lars Richter, Julius Berger reduces dividend payout to prepare for Covid-19 hit

The global pandemic being faced by the world as we know is set to have major operational implications on businesses across the world and possibly dovetail into a recession.

With predictions of an incoming recession, many businesses and individuals alike have put things in place to prepare for the trying times ahead.

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With the construction industry predicted to experience a major hit, given the halted state of activities, Julius Berger has taken cost-cutting measures to ensure its sustainability.

Following a very good 2019 financial year, Julius Berger had announced a dividend pay-out of ₦2.75K per 50K share for the financial year ended December 31, 2019 and a bonus of 1 (one) new share for every existing 5 (five) shares held.

However, in an attempt to brace itself for the impending challenges, the board of the company withdrew its previously announced final cash dividend payment of ₦2.75K per 50K share, and instead recommended a final cash dividend pay-out of ₦2.00K per 50k share.

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In a corporate action announcement, it revealed that the Board had “carefully considered the emerging social, operational, financial and economic impact of the COVID 19 pandemic, the outlook for Nigeria for the financial year 2020, and the impact on the business and cash flows of the Group.”

It is the company’s way of protecting its liquidity and ensuring long-term sustainability, while balancing the need for returns to shareholders.

The savings it obtains from the reduced cash dividend of ₦2.00K, as well as its diverse measures to reduce operational and capex costs is to be retained within the business to protect its growth.

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Businesses are, at this time, taking necessary actions to ensure business continuity and this is what the company has done. The Group’s financial position is still strong, however, as its Q1 results revealed.

Consequently, the board remains confident about its future, post-Covid-19.

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Coronavirus

New normal for the informal sector

Africa is the world’s last frontier in the fight against extreme poverty where one in three Africans−422 million people−live below the global poverty line.

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Post COVID-19 and Africa's informal sector: Africa and Nigeria "The new normal"

The outbreak of the novel Coronavirus disease (COVID-19) in China has extremely changed the world, as it has turned into a major pandemic and affected millions of people around the world regardless of geographical location, age, race, gender, etc.

While this crisis is first and foremost a public health issue, which has claimed the lives of thousands of people worldwide and still counting, the economic fallouts will no doubt be overwhelming and will likely lead to major economic meltdowns; both in the formal and informal sectors.

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READ ALSO: FIRS moves to stop tax evasion with newly launched intelligence system 

According to Brookings Institute, Africa is the world’s last frontier in the fight against extreme poverty where one in three Africans−422 million people−live below the global poverty line. This fact brings to fore, the alarming consequences of COVID-19 in the economic sectors which will increase the income gap backward rather than reduce the number of people living below the global poverty line.

The informal sector arguably constitutes the largest employer of labor in Africa. The International Labour Organisation estimates that more than 66% of total employment in Sub-Saharan African is in the informal sector. With a pervasive informal sector, city governments have been struggling with how best to respond to the COVID-19 pandemic. Furthermore, informal enterprises are typically characterized by low wages and non-exportable goods and services. This sector provides crucial livelihoods to the most vulnerable of the urban poor.

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(READ MORE: Recalibrating Job creation within COVID-19 realities )

The spread of COVID 19 poses a big threat to small scale businesses which serve as a major source of livelihood for many Africans. It is important that, just as Africa is working towards combating the spread of the virus, the government should help to support this vital, yet often excluded segment of the economy.

Post COVID-19 and Africa's informal sector: Africa and Nigeria "The new normal"

The informal sector is very much essential for the welfare of the people living in the local communities and for the expansion of the economy at large. As Africa’s informal sector provides about 80% of employment and contributes over 50% GDP, it is reason enough to save this crucial sector from jeopardy.

Taking Nigeria to be the case study, the wave of the pandemic is showing no sign of reduction unless a permanent solution is found.

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However, looking on the bright side, there is a possibility that a vaccine could be found sooner or later to counter this unpleasant enemy. But until then, how will we as a country adjust to the “new normal”, that is life after COVID-19, as the experts who used this terminology explained that life, as it was before, will not come back to normal for some time to come. Let’s take a few instances.

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One major normal, which is of general importance with a massive impact on our livelihood, is the loss of jobs. Yes, our means of making ends meet have been threatened. Many people will be rendered jobless as all economic activities the world over, have slowed down.

Those who will be hit the hardest are, as already mentioned, small-scale businesses that may find it challenging to adapt to the new normal of doing business via virtual means, etc. The small-scale businesses are also employers of labor, so going down means their employees will suffer the same loss with them. Amongst the unemployed, the hardest hit is the daily wage workers whose livelihoods are based on their daily incomes.

(READ MORE: 7 common money mistakes I made and why you should avoid them)

Therefore, a lot of people will suffer unemployment in this time, and paying bills such as house rent bills, food bills, school bills will become near impossible.

Post COVID-19 and Africa's informal sector: Africa and Nigeria "The new normal"

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Another new normal is that, classes and lessons will have to be done online, and this could be the pattern for some time to come. This will pose major challenges for parents who do not have the resources to acquire gadgets or even buy the data required for their wards/children to participate in online classes. This new normal is also applicable to post-secondary students, who have a higher need for gadgets and data to participate in online classes.

By this time in the old normal, schools would have begun a new term. Being the third term in which promotional exams are done, both parents and pupils will be up and doing to ensure preparations in order to secure promotions. Most especially those preparing to take examinations to secure admission into the universities.

The question posed here is, how can the government help in reducing the burden of both the parents and the students who are on lockdown right now and can’t make ends meet talk less of spending the little resources being managed this period to acquire required gadgets or even data? As we are all aware the data rate in our country is high, unlike in most countries where data is cheap or even free. Can the government help in reducing the data rates in order to reduce the burden on parents and students?

(READ MORE: Rethinking Inclusive Education: COVID-19 realities, post implications on education)

With the wave of the pandemic being on the rise, so many countries have moved away from multilateralism and have retreated into fending for themselves with several measures to protect their own people and economies, regardless of the effects on the rest of the world which has led to certain restrictions.

Post COVID-19 and Africa's informal sector: Africa and Nigeria "The new normal"

This restriction could also be the new normal, as we are left with the questions of what if? What if the COVID 19 pandemic continues in a second wave, with borders still shut, food importation restricted, what if we can no longer travel out for medical attention and must rely on our hospitals here? Talk less of education, what if we can no longer travel out to study abroad and must rely on our educational system here?  We can no longer be dependent on the world for everything.

READ ALSO: COVID-19: The ‘New Normal’ for Nigerian aviation industry

For a country of over 200 million people, we cannot continue to keep ignoring the dangers that lie ahead if we do not begin to depend largely on what we produce locally, because the security and well-being of our nation is solely based on building a productive and well-diversified economy.

We have no clear vision of what the world will look like after the pandemic is over, therefore as a nation, we need to seize the opportunities of the “new normal” and make the best out of them. As much as all these new developments seem troubling, it is a clear opportunity to work things out for a better future ahead.

We must look inwards as a nation and guarantee food security, high quality and affordable healthcare for all social classes, and pioneering education for our people. We can transform Nigeria into a modern, sophisticated and self-sufficient economy in which we don’t have to be dependent on other countries for everything and can thrive on our own, protecting the poor and vulnerable and being able to compete with other strategic sectors internationally.

(READ MORE: Gold prices surge by 17.4% in 2 months due to global economic crisis)

To achieve this goal, what needs to be done include:

  • Supporting both the smallholder and large-scale agriculture production.
  • Creating a better educational system that will enable creativity and reasoning in order to prepare our children for the world tomorrow.
  • Creating more factories, storages, and logistics companies which also serve as a way of creating job opportunities for the youths.
  • Developing initiatives programmed to help support or promote youths who want to acquire skills and take them up as professions.
  • Providing security for the poor and vulnerable, and developing the policies that bring financial services to them.
  • Developing a standard and trusted health care system to keep Nigerians healthy irrespective of social class.
  • Creating easy access to cheap and long-term credit for SMEs and large corporates.
  • Creating a reliable power supply that can engender industrial activities.
  • Developing venture capitalists for nurturing new ideas and propagate Nigerian businesses to compete globally.

This is the opportunity to create a better Nigeria and do the needful to become a better country.

COVID-19 may have thrown us all into a crisis of unprecedented proportions but we can still make the best out of it. However, mismanagement of the challenges could leave us to suffer untold hardships for some time to come.


Written by Abraham John Onojaa

abrahamjonoja@gmail.com

+2348164208130

 

 

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