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West Africa A stocktake on the COVID-19 pandemic An indicative outlook on the impact and future potential Based on more than 40 interviews with experts from the West African region www.kas.de
Imprint Published by: Konrad-Adenauer-Stiftung e. V. 2021, Abuja This publication of the Konrad-Adenauer-Stiftung e. V. is solely intended for information purposes. It may not be used by political parties or by election cam- paigners or supporters for the purpose of election advertising. This applies to federal, state and local elections as well as elections to the European Parliament. Design and typesetting: yellow too Pasiek Horntrich GbR The print edition of this publication was climate-neutrally printed on FSC certified paper. Printed with financial support from the German Federal Government. This publication is published under a Creative Commons license: “Creative C ommons Attribution-Share Alike 4.0 international” (CC BY-SA 4.0), https://creativecommons.org/licenses/by-sa/4.0/legalcode. ISBN 978-978-991-313-8
West Africa A stocktake on the COVID-19 pandemic An indicative outlook on the impact and future potential Based on more than 40 interviews with experts from the West African region
At a glance › In sub-Saharan Africa, there were commonalities in the fight against the pandemic as well as differences, which stem from the varying socio-economic and political environments of the individual countries prior to the crisis. › The quick and often strict lockdown measures adopted after the first registered cases is a common characteristic that prevented many countries from higher infection rates at the beginning, which would have overburdened the respective health systems. › In almost all sectors, two main weaknesses have once again become apparent: On the one hand, the lack of added value in the country’s own local production and the associated dependence on imports. And on the other hand, the extremely high number of informal employment, which are immediately affected existen- tially by any economic setback. › In the coming years, it will be even more important for the West African region to create more regional integration and cooperation in order to grow as a region and avoid being divided into front-runners and outcasts. › In this context, the economic heavyweight Nigeria must also play an important role, or even be the growth engine. But in order to become the region’s economic powerhouse, it needs to resolve its great dependence on oil and tackle their inter- nal security problems. › Sub-Saharan Africa can and should play a more important role as a political part- ner for Europe in the discussion of topics such as the migration challenges, the dependencies from single countries such as China and the needed partnerships in the 21st Century. 3
Content Abbreviations 6 Introduction 1 8 Sub-Saharan Africa before and during the pandemic 2 12 2.1 Developments in recent years 13 2.2 COVID-19 in sub-Saharan Africa – an overview 17 3 Spotlight on West Africa and selected countries 20 3.1 West Africa 21 3.1.1 Economic development until COVID-19 crisis 21 3.1.2 Dealing with the challenges of the pandemic 24 3.1.3 A n indicative outlook on the impact of the COVID-19 crisis and future potential in selected areas 27 3.2 Côte d’Ivoire 30 3.2.1 Economic development until COVID-19 crisis 30 3.2.2 Dealing with the challenges of the pandemic 31 3.2.3 A n indicative outlook on the impact of the COVID-19 crisis and future potential in selected areas 33 3.3 Ghana 34 3.3.1 Economic development until COVID-19 crisis 34 3.3.2 Dealing with the challenges of the pandemic 36 3.3.3 A n indicative outlook on the impact of the COVID-19 crisis and future potential in selected areas 37 3.4 Mali 38 3.4.1 Economic development until COVID-19 crisis 39 3.4.2 Dealing with the challenges of the pandemic 40 3.4.3 A n indicative outlook on the impact of the COVID-19 crisis and future potential in selected areas 40 3.5 Senegal 41 3.5.1 Economic development until COVID-19 crisis 41 3.5.2 Dealing with the challenges of the pandemic 43 3.5.3 A n indicative outlook on the impact of the COVID-19 crisis and future potential in selected areas 44 4
Content 3.6 Nigeria 45 3.6.1 Economic development until COVID-19 crisis 45 3.6.2 Dealing with the challenges of the pandemic 49 3.6.3 An indicative outlook on the impact of the COVID-19 crisis and future potential in selected areas 52 4 Economic Community of West African States and African Continental Free Trade Area 60 4.1 Economic Community of West African States (ECOWAS) 61 4.2 African Continental Free Trade Area (AfCFTA) 63 5 Conclusion 66 5.1 West Africa and the pandemic 67 5.2 An outlook and optimistic appeal for sub-Saharan Africa 69 Interviewee 71 Sources 74 Authors 80 5
Content Abbreviations AfCFTA Africa Continental Free Trade Area BMZ Federal Ministry for Economic Cooperation and Development CEPI Coalition for Epidemic Preparedness Innovations COVAX COVID-19 Vaccines Global Access COVID-19 Corona Virus Disease 2019 DEG Deutsche Investitions- und Entwicklungsgesellschaft ECOWAS Economic Community of West African States e.g. Exempli gratia EUR Euro FDI Foreign Direct Investments G20 Group of 20 GAVI Global Alliance for Vaccines and Immunization GDP Gross Domestic Product HIV Human Immunodeficiency Virus 6
Abbreviations km² Square Kilometre KfW Kreditanstalt für Wiederaufbau NGN Naira NGO Non-governmental organisations UK United Kingdom USA United States of America USD US-Dollar WHO World Health Organisation % Percent 7
1 Introduction 1 Introduction Mauretania Mali Niger Chad Sudan Eritrea Djibouti Guinea Nigeria Guinea South Ethiopia Bissau Central afr. Sudan Republic The Gambia Benin Somalia Senegal Kenya Uganda Togo Democratic Gabon Republic of the Rwanda Ghana Congo Burkina Burundi Tanzania Faso Cameroon Côte d’Ivoire Equatorial Angola Guinea Liberia Zambia Republic of Sierra the Cogo Leone Zimbabwe Namibia Botswana Madagascar Mozambique South Africa Eswatini Lesotho 8
1 Introduction On 27 February 2020, the first COVID-19 case was recent years in some countries will potentially reported in sub-Saharan Africa in Nigeria, most become stagnant or will even lead to regression. likely as a result of travellers travelling to and Some countries will even face recession for the from already existing hotspots in Asia, Europe, or first time in a generation, due to falling oil and the USA. On 13 May 2020, the Kingdom of Leso- commodity prices, slumps in the tourism sec- tho recorded as the last of the sub-Saharan Afri- tor and the decline in foreign investment.2 These can countries its first COVID-19 case, bringing the externalities have unfortunately tended to be pandemic to the entire African continent in just exacerbated by the lockdown measures in the under three months. The pandemic hit many of the countries, and country-specific challenges, such sub-Saharan African countries on their path toward as social unrest, among others, have also contrib- growth and stabilisation, and like all other coun- uted to a worsening of the situation. At the begin- tries globally, they were completely unprepared. ning of the pandemic, with still comparatively low case numbers in most sub-Saharan African Beginning of July 2021, a total of 3,981,431 cases countries and little evidence regarding the impact of COVID-19 have been recorded in sub-Saharan of the crisis, there were overwhelming reports Africa, and 75,571 people have died with or and assessments that the pandemic would lead because of COVID-19. South Africa has by far the to a catastrophic socio-economic disaster in sub- most cases, with over 2 million, and is unfortu- Saharan Africa, with significant fatalities. It was nately also the source of a virus mutant causing speculated that individual countries would not be even more restrictions, in particular international able to deal with the pandemic due to the lack of traveller’s bans leaving the tourism sector in basic requirements in the health care systems, the South Africa in a challenging situation. Countries dysfunctionality of administrative processes, lack such as Ethiopia, Kenya, Nigeria and Zambia fol- of governmental willingness and misunderstand- low each with at least over 150.000 COVID-19 cas- ing and misconceptions of the greater public. es.1 On the date on publication of this study, the Unlike other diseases, such as Ebola, sub-Saharan pandemic will still be far from over, many coun- Africa had to deal with in the past, COVID-19 alleg- tries yet to experience the 3rd wave or are still in edly originated elsewhere in the world and was the midst of the 2nd wave and of course cannot yet brought to sub-Saharan Africa. The whole world assess the impact of the pandemic in its entirety. had to deal with the virus’s impact but with regard The volatility in the global environment due to to sub-Saharan Africa some media and institu- the COVID-19 pandemic and related measures, is tions predicted the continents’ handling of the cri- taking a heavy toll on human life, placing exces- sis immediately within the old, negative patterns sive pressure on health systems, and continuing of wars, diseases, and corruption. to negatively impact the economic prosperity and social stability of all countries. Interestingly, many of these reports and assess- ments came from outside sub-Saharan Africa In sub-Saharan Africa, the current impacts are and offered very little insight from the respec- immense. Among other things, they reduce agri- tive countries or experts on the ground and of cultural productivity, affect supply chains, reduce course, it was far too early to make any conclusive labour market opportunities in the formal sector statements. As the pandemic has progressed in and exacerbates the already vulnerable state of sub-Saharan Africa, some of the challenges associ- the informal sector. The restrictions on economic ated with the pandemic have also become appar- activities resulting from COVID-19 related govern- ent and even intensified. But this should not give ment lockdowns and macroeconomic instability rise to a general resurgence of “Africa pessimism” is increasing poverty and threatens livelihoods. but rather focus attention on the facts and “Africa Undoubtedly sub-Saharan Africa is facing major realism”, such as strict and fast measures or resil- economic and socio-political challenges. Due to ience which in many cases also forms the basis for expert’s opinion the positive developments in “Africa optimism”. terms of economic growth and governance in 9
1 Introduction The question is what kind of positive or negative in a fundamentally difficult economic situation developments in sub-Saharan African countries due to the 2015/2016 crisis and the renewed drop continue under the current COVID-19 pandemic. A in oil prices at the beginning of 2020 when the further question is how sub-Saharan African coun- coronavirus reached the country. tries will respond to the COVID-19 crisis as well as its probable medium- to long-term impacts. These Based on the above-described objective of the questions have led to this study at hand, which is study and the chosen approach, the following not intended to take an “external view”, but rather core building blocks have been defined in addition to include those experts’ knowledge who have to this introduction (Chapter 1): been able to follow the developments in their respective countries over the past few years and › An overview to developments in recent years are now therefore better positioned to evaluate in sub-Saharan Africa and the current COVID- the impacts of the COVID-19 crisis. This study is 19 pandemic situation (Chapter 2); based on more than 40 expert interviews, which were enriched with corresponding research on › A focus on West Africa as a region, including data and facts. spotlights on Côte d’Ivoire, Ghana, Mali, and Senegal and a focus on Nigeria as the largest The diversity of the sub-Saharan African countries economy, including more details on recent does not allow the study to be carried out in a developments and some sector specific generalised manner for all countries but requires impacts (Chapter 3); a focus on a region and even more a focus on some countries in this region in order to discuss, › An overview on the “Economic Community of compare and include further details. West African States (ECOWAS)” as an insti- tution, including the Economic Partnership For many reasons the focus of this study is on Agreement efforts with the European Union West Africa. On the one hand, to highlight the and the new “African Continental Free Trade increased economic strength of the region in Area (AfCFTA)”. (Chapter 4); recent years and take a close look under the chal- lenges of the COVID-19 pandemic. But also, on › The conclusions presented for West Africa the other hand, to further consider the increased and an outlook and optimistic appeal for interest and support from Germany and Europe sub-Saharan Africa (Chapter 5). for this region and to support this interest with current facts and views on the mid to long-term The qualitative, expert interview-based study developments. German foreign policy in particu- design also includes a high-level overview of the lar has increasingly focused its engagement on economic developments and trends in the region West Africa in recent years and has entered into and the respective countries prior to the COVID-19 a variety of partnerships and supported develop- crisis in order to better understand the measures ments in the countries of West Africa. Also, from and impacts caused by the pandemic. This relates the perspective of the European Union the region in particular to the more general developmental and its Economic Community of West African aspects of the study as additional insights from States (ECOWAS) is of importance due to its tasks previous years are required in order to develop for economic development, and for stabilising the a more holistic perspective and understanding of security situation. the country-specific insights and analysis. Nigeria, by far the largest economy in sub-Saha- ran Africa, naturally occupies a prominent role in the study. Not only because the COVID-19 pan- demic is a major challenge for Africa’s most popu- lous country, but also because Nigeria found itself 10
1 Introduction 1 WHO Coronavirus Disease (COVID-19) Dashboard: 2 Afrika Verein der deutschen Wirtschaft e. V.: Investitions- https://covid19.who.int/ (04.07.2021) und Handelsförderung Post-Corona: https://www.afrikav- erein.de/fileadmin/user_upload/PP_Investitions-_und_Han- delsfoerderung_Post-Corona.pdf (15.12.2020) 11
2 Sub-Saharan Africa before and during the pandemic 2 Sub-Saharan Africa before and during the pandemic 12
2 Sub-Saharan Africa before and during the pandemic 2.1 Developments in recent years 2.1 Developments in recent years General developments – an overview great the potential is if the current challenges Before the outbreak of the COVID-19 virus, and problems that still exist (also independent of sub-Saharan Africa could refer back to years of COVID-19) were to be solved. positive economic development with a promising outlook for the future. Sub-Saharan Africa was Many countries in sub-Saharan Africa have sus- taking its first slow steps toward becoming a more tained their growth over years and some of these important player for the world economy. These countries belong to the Top10 economies regard- developments have built a valuable basis, which ing Gross Domestic Product (GDP) growth in also offers the potential support in overcoming recent years. Improved economic growth across the current crisis, and can counteract p andemic sub-Saharan Africa has been broad, with varia- related negative developments. It is therefore tion across economies, sectors, and regions. The worth taking a more detailed look at these eco- success stories of various countries over the past nomic trends in the context of this study to under- few years showcase the potential and the growth stand the prerequisites for recovering from the sub-Saharan Africa has to offer. COVID-19 crisis. And above all, to understand how 16% 14% 12% 10% 8% 6% 4.03 4.41 4.38 4.35 4% 3.22 3.09 3.27 3.15 3.08 2% 1.50 0% 2015 2016 2017 2018 2019 2020* 2021* 2022* 2023* 2024* 2025* −2% −4% −3.04 −6% Sub-Saharan Africa: Growth rate of real gross domestic product (GDP) from 2015 to 2025 – Source: https://www.statista.com/statistics/805560/gross-domestic-product-gdp-growth-rate-in-sub-saharan-africa/ (* Forecast) (last accessed: 17 March 2021) 13
2 Sub-Saharan Africa before and during the pandemic 2.1 Developments in recent years Purposeful to this development is that in some security situation is difficult. Democracy is under countries political systems are slowly but contin- increasing pressure in a number of African coun- uously stabilizing and the way of doing business tries and authoritarian tendencies are on the rise. is becoming progressively professionalized. Legal Some of the recent elections were far from fair systems and award enforceability is becoming and democratic. slowly structured and aligned with international standards in legal systems. In many sub-Saha- Sub-Saharan Africa’s population had reached ran African countries, bureaucracy has been the 1.1 billion mark in 2020 and is projected to reformed in recent years thereby making it easier increase to 2.12 billion by 2050, which means a for domestic and foreign companies to enter the weekly increase of 653,000 people (linearized). By market and to improve the business climate. In the end of the century, sub-Saharan Africa’s pop- the World Bank’s “Doing Business Report”, five ulation will increase once again to up to 3.7 billion sub-Saharan African countries are among the top people. Most economic, political, or socio-eco- 10 reform countries in the category of “Starting a nomic developments and challenges are directly Business”.3 or indirectly related to this population growth. In terms of working population, sub-Saharan Africa Despite the many positive developments and indi- will be the world’s largest workforce (340 million cators, it must not be forgotten that unfortunately people) by 2035, rising to 850 million by 2050 there are still corrupt elites in some countries, (nearly one in four workers worldwide). some governments are highly inefficient, and the Year 1950 2020 2050 2100 Global 2,5 7,8 9,7 10,8 in billion Sub-Saharan Africa 0,17 1,1 2,12 3,7 in billion Percentage 7% 14% 22% 35% Source: Illustration by Africa Advisors, data from: United Nations – Department of Economic and Social Affairs Population Dynamics: https://population.un.org/wpp/DataQuery/ (last accessed: 2 January 2021) But this growth does not only hold opportunities It is anticipated that cities like Lagos in N igeria for a young population, but is also characterised (currently 21 million people), Kinshasa in the by risks, such as food security, access to educa- Democratic Republic of Congo (currently 12 mil- tion and jobs, as well as security in the countries. lion people) and Dar Es Salam in Tanzania (cur- A demographic dividend is still not in sight for the rently 6 million people) will become Giga Cities vast majority of the sub-Saharan countries. by the end of this century with close to 100 mil- lion people living in these metropolitan areas. Most of the population is living in rural areas but These urbanization processes will force struc- are becoming closer to global markets through tural changes and accelerate the developments in off grid solutions, mobile phone technologies and these areas and the steady growth of the middle improved infrastructure. Simultaneously, urban- class will guarantee an increased demand for a ization processes will accelerate 80% of sub- variety of consumer goods and related services. Saharan Africa’s population growth over the next The respective consumer spending is projected to 20 years. This will lead to approximately 50 totally double within the next 30 years. new cities with populations of over 1 million each. 14
2 Sub-Saharan Africa before and during the pandemic 2.1 Developments in recent years The continent owns approximately 60% of the the approximately 400 companies in Africa with world’s arable4 land and with its huge domes- already annual revenues of USD 1 billion or more, tic market, abundance of labour resources and the AfCFTA will create additional opportunities favourable climate in most parts, new indus- and options for further growth.5 As these factors tries around the important agricultural sector create attractivity and opportunities, sub-Saha- will emerge and offer massive opportunities for ran Africa is set to become increasingly visual on growth. With innovation and development, these the radar of investors, corporates, entrepreneurs, significant agricultural resources have the poten- policymakers as well as Africa related institutions. tial to feed all the people living there. Hunger and Companies who have already achieved market malnutrition could be overcome (in a best-case entry are sharing their success stories and are scenario) within a decade. But here, too, the gen- planning to expand further in sub-Saharan Africa. eral potential is closely linked to growing chal- lenges or even conflicts, as is particularly evident Snapshot on important sectors and in climate change, which is already having a dis- related developments proportionately strong impact on the countries in Economic development in many sectors is the fuel the Sahel region and is significantly affecting the of growth and the basis for further success. Since general climate, agricultural cultivation conditions most sub-Saharan African countries still have the and the availability of drinking water. Sub-Saha- status of developing countries, there is growth ran Africa’s young population are gradually bet- potential in many sectors6 although the challenges ter educated and know how to find their place in and problems that still exist must not be ignored. the digitally driven world of work. This affinity for digital solutions is also slowly producing entre- Industry and Manufacturing preneurs and start-ups that solve the daily chal- Sub-Saharan Africa has slowly started to substi- lenges of many people in Africa with their prod- tute its imports through local production to the ucts and services and write success stories. Of growing demand and to reduce dependencies course, experts point out that this development from foreign countries. Highlighted by experts is only happening as fast as access to the inter- this process has the potential to accelerate the net and mobile devices is available and afforda- industrialization processes and it is estimated that ble. In many cases, the use of the new technol- sub-Saharan African industries can nearly double ogy still needs to be practised, which is true even production within a decade to become another for university graduates. In a few sectors a key manufacturing center in and for the world. In fact, characteristic of these developments is “leapfrog- some countries have already started to develop a ging”, the skipping of technological steps, as has diversified manufacturing base and have shown already been demonstrated in the area of mobile a realistic potential to compete in the global payment or other financial services. However, the economy with products from sub-Saharan Africa. successes, especially in the FinTech sector, should Experts predict that key industries could include not obscure the fact that most industries do not in the future automotive (e-mobility), chemicals, have the prerequisites for these technological information and communication technology, food leaps. Also, in sub-Saharan Africa leapfrogging processing, electronics, clothing, textiles, footwear, usually only takes place when international inves- wood products, paper, petroleum, and plastic tors are involved, or individual sectors receive products. But there is still a long way to go to real- special funding. ize this potential. The implementation of the Africa Continental Free Resources Trade Area (AfCFTA) commenced on 1 January Sub-Saharan Africa has always had an abundance 2021, with the aim of harnessing the continent’s of both agricultural and mineral resources and ability to unify and create economic power, com- still a major part of these is untapped or undevel- bining an anticipated GDP of over USD 2.5 tril- oped. It is highly likely that in the following years, lion (see also chapter 4 for more details). For 15
2 Sub-Saharan Africa before and during the pandemic 2.1 Developments in recent years innovations and investments drive the continent Highlighted by experts a more and more digital towards unlocking these resources and to benefit sub-Saharan Africa also creates a market for dig- from it. ital business process outsourcing, especially for German and European companies. Agriculture Farming is and will continue to be the most Tourism important part of the sub-Saharan African econ- Sub-Saharan Africa had a fast-growing tourism omy, with a huge amount of the population being industry, recognizing tourism as a very profitable directly or indirectly dependent on agriculture business with immense growth potential. In some for their employment and income. In various of the sub-Saharan African countries, this s ector countries, governments established supporting directly ranks second to the agricultural sector. Sub- programs for commercially oriented small-scale Saharan Africa’s tourism is only expected to grow farming. Related industries which are also getting because of its geographic scenery, natural beauty, a lot of attention are food-processing, freshwater rich biodiversity, cultural diversity, and a reputation aquaculture and maricultural, and various types for delivering value for money experiences. of meats, nuts, herbs, and fruit. Drone technology is also becoming increasingly popular for seeding Finance Services or effective pesticide control. Many countries in sub-Saharan Africa are tak- ing several measures to strengthen their finan- Infrastructure cial foundations and institutions. Many domestic Infrastructure is the key to unlocking further and foreign institutions have been established growth. Millions of citizens in sub-Saharan Africa throughout the continent, which are providing still have no access to electricity, clean drinking a wide range of services from commercial and water and sanitation systems, a functioning health retail to merchant banking, lending, and invest- system, pharmaceuticals, education, public trans- ments. This includes microfinance institutions port or road and rail infrastructure. Many gov- and businesses with complementary financial ser- ernments have recognized the problems and are vices. For example, South Africa has developed closing the gaps, also with the support of interna- a regulated banking system with a Central Bank, tional partners. The growth potential in this sector some large financially strong banks, and several is tremendous, as the demand will also be contin- smaller banks. Nigeria, on the other hand, consol- uous as the population grows. idated 89 banks to 25 banks to unlock its sector’s potential.7 A strong financial sector will also lead Digitization and Mobile Access to growth in other sectors and be able to act as a Sub-Saharan Africa is on its way to slowly unlock backbone for them. its potential to become a digital and mobile con- tinent. In a global comparison, Internet access Retail and Apparel and a reliable power supply is still lacking behind. Nearly all experts confirmed that due to the Nevertheless, access to digital infrastructure consistently growing population in sub-Saharan is in some countries already better than tradi- Africa, retail is guaranteed to become a long-term tional infrastructure and the roll-out has just growth parameter in the region. This affluent and commenced. The increase in mobile phone use important sector includes textiles, clothes, hard- enables access to digital products, especially in ware, household goods, general stores, phar- the financial sector, service sector or even in the maceuticals, and food and drinks. The industry leisure sector, such as streaming services and is also a significant employer and can become a social networks. Through these digital opportuni- successful export sector for sub-Saharan Afri- ties, the already mentioned opportunity of leap- can brands and products. This development can frogging in some sectors will continue to increase, already be mapped with young African designers and to solve everyday challenges, people will opening Pop Up Stores in Germany and else- respond directly with digital products and services. where in Europe. 16
2 Sub-Saharan Africa before and during the pandemic 2.2 COVID-19 in sub-Saharan Africa – an overview 2.2 C OVID-19 in sub-Saharan Africa – an overview After demonstrating its strong resilience dur- people work in the informal sector, for example in ing the Ebola outbreak and the global financial traditional markets, where strict lockdown meas- crisis, sub-Saharan Africa is once again facing a ures could not be enforced as people depend on severe test of its strength and resilience in light daily sales for basic consumption purposes. of the COVID-19 pandemic.8 An African prov- erb says, “However long the night, the dawn The number of reported cases through test cen- will break”. This advice rings true for the global tres is comparatively very low in most sub-Saha- struggle against the COVID-19 pandemic. Until ran African countries, especially since more than today, the huge catastrophe predicted by many half of all cases are in South Africa alone, and well for the sub-Saharan African region, in relation to behind the figures from European, American, or the COVID-19 disease itself, has fortunately not Asian countries. Another positive aspect is that become reality although people in cities like Lagos the mortality rate is also comparatively lower in or Dakar are living in poverty and in high density sub-Saharan Africa. areas with unhygienic conditions. Moreover, most 04.07.2021 First Case Recorded Cases Death Sub-Saharan Africa 27th February 2020 3,981,431 93,526 South Africa 5th March 2020 2,046,311 61,507 Ethiopia 13 March 2020 th 276,368 4,330 Kenya 13th March 2020 185,591 3,671 Nigeria 27 February 2020 th 167,803 2,121 Zambia 15th March 2020 162,487 2,397 Ghana 12th March 2020 96,067 796 Namibia 11th March 2020 94,047 1,626 Uganda 21st March 2020 83,637 1,193 Cameroon 6th March 2020 80,858 1,324 Mozambique 22nd March 2020 79,213 897 Source: 10 Most affected countries in sub-Saharan Africa – WHO Corona Virus Disease (COVID-19) Dashboard 9 But, the lack of testing capacity makes it extremely can only be reliably named after the end of the difficult to determine how much of an impact the pandemic with more data and insights from the pandemic will actually have on the populations health systems, research and studies, but there of African countries. The reasons for the compar- are certainly some indications: atively low numbers are certainly complex and 17
2 Sub-Saharan Africa before and during the pandemic 2.2 COVID-19 in sub-Saharan Africa – an overview › Many sub-Saharan African countries took Also, for the economies in sub-Saharan Africa swift measures after the first cases became the resulting impacts of the pandemic could be a known and, in some cases, implemented strict caesura for businesses going forward – business lockdown protocols; trade and practices, supply chains, strategies and assumptions will change. This does not only apply › International airports closing very quickly and to all businesses but also to all countries. Even preventing crossing of country borders; before the COVID-19 crisis the growth of African economies has often been lower than the popula- › Outside the large urban centres, there is also tion growth. The pandemic could have an acceler- very limited cross-regional mobility, as there ating effct and thus result in further challenges. In is often simply no transport available; addition, negative economic developments out- side sub-Saharan Africa could also pose a threat. › The rapid response is also based on many countries’ experience with other infectious Due to expert’s opinion the pandemic has also diseases such as Ebola and Lassa fever, and ruthlessly exposed weaknesses and sub-Saharan has likely led to a slower spread of infection; African countries are well advised to further and quicken their positive developments, solve exist- › On average, the population in sub-Saharan ing challenges and problems. The existing level of Africa is below 20 years10 old and the low developments make now even more their defi- infection figures could also be related to the cits visible to the youth and the next generation. low average age – young people are more The vulnerability towards pandemics is frighten- likely to be asymptomatic and because they ing. But active industry policies can be accelera- do not get noticeably ill, they are less likely to tors to combatting against poverty and to creat- get tested; and ing a healthy, inclusive society with sustainable economic growth. And as good times return and › It is increasingly suspected that the immune economies stabilise, it should become a priority system is shaped not only by genetics but also to make the economies more robust against any by environmental factors, such as exposure to potential exogenous shocks. But, since national microorganisms and parasites. This trains the economies are always interdependent in a global immune system to protect itself against invad- structure, this can only succeed for the developing ing pathogens.11 countries in sub-Saharan Africa if the countries are also willing to shape the financial resources, As positive as these indications are, one must be offer government incentives and subsidies as well sensitized to the risk arising from the indirect con- as framework conditions in such a way that this sequences of the pandemic. Firstly, the potential efficient economy can also emerge. collateral damage to health from drug shortages or their limited distribution, as well as a defer- ral of treatment for other diseases (including HIV, tuberculosis, Malaria), could be much more acute in some countries than the virus itself. 18
2 Sub-Saharan Africa before and during the pandemic 3 The World Bank Group: Doing Business 2019: https://www. 8 African Development Bank: Post COVID-19: Rebuilding doingbusiness.org/content/dam/doingBusiness/media/ Africa and strengthening its resilience against future eco- Annual-Reports/English/DB2019-report_web-version.pdf nomic shocks: https://www.afdb.org/en/news-and-events/ (22.12.2020) post-covid-19-rebuilding-africa-and-strengthening-its-resi- 4 GROWAFRICA: 60% OF ARABLE LAND IS IN AFRICA AND IT lience-against-future-economic-shocks-37467 (15.12.2020) HAS BILLIONS IN INVESTMENT POTENTIAL: https://www. 9 WHO Coronavirus Disease (COVID-19) Dashboard: growafrica.com/news/60-arable-land-africa-and-it-has-bil- https://covid19.who.int/ (19.03.2021) lions-investment-potential (23.11.2020) 10 United Nations – Department of Economic and Social 5 McKinsey Quarterly: Africa’s overlooked business revolu- Affairs Population Dynamics: https://population.un.org/ tion: https://www.mckinsey.com/featured-insights/mid- wpp/DataQuery/ (02.01.2021); Worldometer: https://www. dle-east-and-africa/africas-overlooked-business-revolution worldometers.info/world-population/africa-population/ (23.11.2020) (02.01.2021) 6 The African Exponent: The Fastest Growing Industries in 11 Deutsche Welle: COVID-19 in Afrika: Pandemie weni- the Booming African Economy: https://www.africanexpo- ger schlimm als erwartet: https://www.dw.com/de/ nent.com/post/7200-the-fastest-growing-industries-in-the- covid-19-in-afrika-pandemie-weniger-schlimm-als-er- booming-african-economy (02.01.2021) wartet/a-54800418 (02.01.2021) 7 The World Bank Group – Research Paper: Financial Intermediation in the Pre-Consolidated Banking Sector in Nigeria: http://documents1.worldbank.org/curated/ en/785541468288988450/pdf/wps4267.pdf (22.12.2020) 19
3 Spotlight on West Africa and selected countries Mauretania Mali Niger Senegal Gambia Burkina Faso Guinea Guinea Nigeria Bissau Côte Ghana d’Ivoire Sierra Leone Benin Liberia Togo 3 Spotlight on West Africa and selected countries 20
3 Spotlight on West Africa and selected countries 3.1 West Africa After the brief and aggregated overview of devel- nomic development of the West African countries, opments in the whole of Sub-Saharan Africa in but also included security policy aspects. In order chapter 2, the West African region will now be to take these aspects into account in the study, discussed in more detail. In this region, there is three countries that are economically prosper- not only a field of tension between the strongly ing – Côte d’Ivoire, Ghana, and Senegal – were emerging economies and the extremely poor included on the one hand. And on the other hand, countries of the Sahel region, but it is also home Nigeria, as an economic heavyweight, should not to sub-Saharan Africa’s largest economy, with its be missing in the assessment of developments. very own dynamics and challenges. It is therefore In Mali, both the strong economic development not surprising that West Africa has increasingly need and the security policy aspect are reflected come into focus from a German and European and is therefore included in the countries of perspective in recent years. The partnerships and detailed consideration. the commitment were not only related to the eco- 3.1 West Africa 3.1.1 Economic development until West Africa is home to some of the fastest grow- COVID-19 crisis ing countries in the world (e.g., Ghana, Senegal, Côte d’Ivoire), but also to some of the poorest According to the definition of the United Nations, and underdeveloped countries in the world (e.g., West Africa as a region includes a total of 16 Niger, Mali in the Sahel region). Beside this gap, countries – Benin, Burkina Faso, Cabo Verde, Côte the categorisation into francophone and anglo- d’Ivoire, Ghana, Guinea, Guinea-Bissau, Liberia, phone countries is another characteristic for the Mali, Mauritania, Niger, Nigeria, Senegal, Sierra region, dating back to the colonial era. The differ- Leone, The Gambia, and Togo. With a population ent language background also results in another of more than 350 million people, West Africa is distinction in terms of society, economy and doing one of the growth regions in Africa and deals with business. all growth-related demographic challenges, with cultural and ethnic diversity, and varying geo- According to the African Development Bank, graphic and political conditions for prosperous West African countries can be classified into four development. groups in relation to their growth in recent years. The following table summarizes the characteris- tics per group.12 21
3 Spotlight on West Africa and selected countries 3.1 West Africa Group 1 Overall, West Africa has seen positive impulses Benin, Burkina Faso, Côte d’Ivoire, Ghana, in recent years and the increasing political sta- Guinea, Niger, and Senegal bility has also had an attractive effect on foreign investors and partnerships at all levels. Prior to This group has consistently shown an annual the outbreak of the COVID-19 pandemic, the West average growth rate of more than 5% between Africa region was projected to grow by around 4% 2017–2018 – defining the growth engines with in 2020. With this growth, however, West Africa 26% contribution to the regions overall GDP ranks only third behind East Africa and North prior to COVID-19 pandemic. Africa, although individual countries have grown Group 2 significantly, and the average growth was positive. Liberia and Nigeria The reason for this is to be found in the economic Countries in this group still suffer from their heavyweight of the region, Nigeria, which had recessions in 2016. For the West African region been slow to return to growth after the crisis in in particular, Nigeria’s weakness and the lower 2015/2016 and unfortunately was unable to act GDP growth directly translates into a lower as the region’s growth engine during this period.13 growth for the region. On the other hand, Nigeria’s economic weakness in terms of regional GDP is reinforced by the fact Group 3 that West Africa is home to some of the world’s Cabo Verde, The Gambia, and Togo poorest, economically weakest, and terror-threat- Countries in this group significantly improved ened countries, such as Mali or Chad. their growth since 2017 and are getting close to 5% or more growth. However, despite the good growth, they only contribute very little to the regions GDP growth. Group 4 Guinea Bissau, Mali, and Sierra Leone These countries are characterized by fluctuat- ing growth rates with little contribution to the regions GDP growth. The reasons for this vol- atility are in particular the political situation of the countries and the associated uncertainties and risks. 22
3 Spotlight on West Africa and selected countries 3.1 West Africa 7 6 5 4 3 2 1 0 2014 2015 2017 2018 2019 −1 −2 Group 1 Group 2 Group 3 Group 4 Contribution to regional output growth in West Africa (percent), 2014–2019.14 From an industry perspective, based on experts’ point out that the further industrialization of the insights past growth in the service sector has West African countries was off to a good start, made it the fastest growing sector in West Africa, particularly in the manufacturing industry, and exceeding manufacturing, and agriculture. With should form the basis for the region’s compet- the positive developments in the service sector, itiveness as it continues to expand. However, it is responsible for almost 50% of GDP growth in even further diversification would be important most West African countries. In countries such as for this, in order to produce a wide range of Senegal, Ghana, or Côte d’Ivoire a huge propor- intermediate and end products or to create sus- tion in the service sector comes from the tourism tainable jobs. industry and the related services, which are key sources for domestic revenues and jobs. Another important growth driver has been strong household consumption, which has also contrib- Contributions to growth from agriculture and uted to macroeconomic stability through a grow- industry have either declined or stagnated rel- ing middle class. Potential for economic growth atively strongly. Structural change continues in also emerged from rising demand for digital West Africa, as proved by the slow transition services. The associated digital economy has the from agriculture to services. Although there is still potential to transform the region’s labour market huge potential in commercial, professionalized, and bring people out of informal jobs. However, and mechanized agriculture, which at the same at present, all countries are at a good technologi- time still provides the most (informal) jobs or is cal level but there is still low internet penetration characterized by subsistence farming. Experts in some places. 23
3 Spotlight on West Africa and selected countries 3.1 West Africa 3.1.2 Dealing with the challenges of the pandemic 04.07.2021 First Case Recorded Cases Death ECOWAS 27th February 2020 488,464 6,472 Benin 16th March 2020 8,199 104 Burkina Faso 09th March 2020 13,494 168 Cabo Verde 24 March 2020 th 32,705 287 Côte d’Ivoire 11th March 2020 48,513 315 Ghana 12th March 2020 96,067 796 Guinea 13th March 2020 23,807 172 Guinea-Bissau 24th March 2020 3,881 69 Liberia 16th March 2020 4,520 133 Mali 25th March 2020 14,439 526 Niger 19th March 2020 5,506 194 Nigeria 27th February 2020 167,803 2,121 Senegal 02 March 2020 nd 43,627 1,171 Sierra Leone 31st March 2020 5,748 104 The Gambia 17th March 2020 6,116 182 Togo 06th March 2020 14,039 130 Source: WHO Corona Virus Disease (COVID-19) Dashboard15 The 16 countries of West Africa have been caught tries in West Africa have recognized the threat just as unprepared by the COVID-19 virus as all and accepted that they must act. Governments other countries in the world. The outbreak of the were able to raise awareness of the crisis and use COVID-19 pandemic came at a time when some of lessons learned from past crises, such as Ebola, to the West African economies were on a sustained reach people with appropriate communications. economic growth path and had positive growth And from the population, understanding of the prospects through the implementation of prudent situation and a commitment to overcoming the macroeconomic policies, while other West Afri- crisis have been plausibly shown. can countries were still struggling to get on the growth path and implement stability. The various and often rapid responses have been judged in two ways by the interviewed experts. Listening to the interviewed experts, what the On the one hand the willingness of fast meas- West African countries have in common, however, ures through the governments could be seen is that the vast majority of them have taken the as positive, as at the beginning of the pandemic virus seriously and have also responded compar- the effects from an economic, political, or social atively quickly with measures. Also, despite the perspective were by no means foreseeable and fact that the virus was brought to sub-Saharan are still not, as the situation remains fluid, Also, Africa from Asia and the Western world, the coun- the fact that there is no structured income and 24
3 Spotlight on West Africa and selected countries 3.1 West Africa places of residence for many of its citizen, it was use of mouth-nose masks, distancing rules and interesting to hear form the interviewee how hygiene measures, closure of stores and mar- vigorously almost all governments in the region kets, establishment of a curfew and even school have responded to the COVID-19 pandemic. closures, especially to protect the most vulnera- Measures included border closures, mandatory ble populations. Restrictions on international travel Cancellations of public events School closures Restrictions on gatherings Restrictions on domestic travel Workplace closures Closures of public transport Stay-at-home requirements Days since the first COVID-19 case 0 10 20 30 Median Interquartile range Timing of COVID-19 lockdown measures in sub-Saharan Africa, 202016 But on the other hand, experts criticized as edge that they have limited resources in the well that the governments were fully aware of health care system (e.g., ventilators, intensive the hugely negative consequences of the rapid care units) in particular, the testing and labora- lockdown measures and with the immediately tory capacities required for diagnosis, care, and introduced palliative programs they more or less follow-up treatment. It was mentioned in inter- admitting indirectly that they knew about the neg- views that this will inevitably result in a large ative effects. It was also criticized that some of the number of unreported cases, coupled with the lockdown measures were not decided in demo- lack of test capacities and many people being cratic procedures and there was no public debate afraid of being tested in order to avoid quaran- or consultation on them. tine and the inability to make a living. In most instances, the insufficient living condi- Until today, the catastrophe predicted by many for tions of many challenged the distribution of the the African continent, in relation to the COVID-19 right stimulus packages. Experts pointed out that disease itself, has fortunately not become a real- the strict measures implemented in the West ity. However, the infection figures were and are African countries also resulted from the knowl- significantly higher in the large cities with interna- 25
3 Spotlight on West Africa and selected countries 3.1 West Africa tional connections and due to the availability of Countries with a high dependence on tourism test centres compared to rural areas. Additionally, are also experiencing a significant downturn and there are other (tropical) diseases besides COVID- will unfortunately continue on this trajectory for 19 that West African countries continue to struggle some time. with intensively and that also require continuous high-level resource from the health care system. Despite all the successes pertaining to digitization Experts pointed out that this means that COVID- and the access of many people to the Internet, the 19 is sometimes not a priority for the limited pandemic caught many countries offhand wherein resources and capacities in the healthcare sector. not all systems and processes could be digitised immediately. This was particularly evident in the However, the indirect effects of the pandemic are educational sector whereby many learners did not severe. In particular, regulatory lockdowns and have access to educational resources and ser- boarder closures have affected many sectors, vices during lockdowns. Many interviewed experts such as agriculture, forestry and fishing, manufac- pointed out that there were also challenges for turing industry, wholesale and retail trade, tour- companies, for example in the area of home ism, and hospitality as well as transportation. The offices, as online collaboration (working from related consequences experienced by the formal home, independently) had not as yet been tested and informal sector have resulted in increased from many people and in some cases, there were unemployment rates as opportunities to earn a no mobile devices, no connectivity, and a lack of daily income has become unattainable for many. other office related infrastructure. Nevertheless, The rise in poverty has been compounded by the the telecommunications industry benefited from inability of citizen to freely access markets, inev- the increased demand, and resourceful entrepre- itably causing an increase in food prices, levels neurs with fast, digital solutions were able to both of hunger and food insecurity. Limited produc- help and profit from the pandemic. tion capacities and border closures were and are the main reason for the rise in food prices. In However, experts also referred to positive devel- the case of imported goods, this is compounded opments experienced as a result of and during by the negative consequences of exchange rate the pandemic. These include a steady growth in devaluations. entrepreneurship and pragmatism among the population, which meant that new business ideas With regard to food security, the pandemic has were developed and implemented, and existing already again revealed the need to rely on local businesses adapted to the new challenges. Exam- product for the development to ensure self-suf- ples given by the experts were the emergence of ficiency. Experts highlighted that this is also true manufacturers of disinfectants and sanitizers, pro- for other common industries with significance, ducers of mouth-nose masks and other personal e.g., the pharmaceutical industry or other medi- protection equipment, distributers of COVID-19- cal products, where currently the backwardness in test-kits (e.g., via drones), food delivery services, the development impedes both growth and secu- data services and e-commerce in general. The rity of supply. The related supply chains have also recovery strategies might build economic resil- been under stress and have unfortunately shown ience against future crises by strengthen regional they function only to a very limited extent. These value chains, reduce vulnerability to external deficits have again ruthlessly revealed how great shocks and advance the digital transition. the dependence on imports and external support still is in many countries, including dependencies The pandemic also revealed what can be achieved on international loans and funding to develop through a functioning collaboration between the these countries. public and private sector. The fast, transparent, and often repeated communication about the pandemic from some of the governments, e.g., in Ghana, has helped to avoid social unrest related 26
3 Spotlight on West Africa and selected countries 3.1 West Africa to the COVID-19 pandemic in a larger scale – at Many experts have stated that the COVID-19 pan- least so far. To keep this positive momentum demic could be considered another reminder for governments, need to heed to their commit- all countries in West Africa to speed up develop- ments pertaining to financial and policy support ments, to readjust and to continue their strate- required in an effort to combat the further spread gized path for growth. The pandemic has ruth- and impact of the pandemic. Support funds from lessly exposed the weaknesses of individual international institutions (such as World Bank, countries, but at the same time it has also high- International Finance Corporation, International lighted reliable strengths. This complete transpar- Monetary Fund or African Development Bank) ency of deficits and opportunities should gener- have to reach the people for the benefit of all and ate momentum for positive further development. to avoid doubts that the relief packages reach This applies equally to all actors – political sector only a few. players, businesses, society, institutions, and asso- ciations – no one has been spared, the pandemic Overall, the region has been tested by the wide- has made no distinctions. Even more reason for spread impact of the COVID-19 pandemic, which all these actors to come together and work and be has affected even the fastest growing economies interested in a prosperous future. This also specif- through shrinkage in trade and investment flows, ically applies to the governments of the respective sharp decline in commodity prices, loss in tour- countries, which for the most part acted quickly ism flows, and overwhelmed the health and social and in a commendable manner in the crisis but sectors. Thus, what seemed a purely health crisis must now also counteract the increasing criti- has also emerged into an economic and social cri- cal voices. In the future, there should be more sis, the extent of which cannot yet be conclusively transparency about the measures and the use assessed. But even during the crisis, there have of (international) financial support measures, as been bright spots and positive developments, so well as ensuring that the measures are the right that, as with the infection itself, one should not fit and reach the right beneficiary. The trust in the make a blanket assumption of the worst-case sce- governments of the respective countries that may nario when it comes to the economic and social have recently been confirmed in elections should consequences. The pandemic has also accelerated be justified by the governments and official insti- new positive developments. tutions on an ongoing basis. In terms of economic growth in the region, there 3.1.3 An indicative outlook on the is no question that the impact of the pandemic impact of the COVID-19 crisis and will continue to be an influencing factor in the future potential in selected areas months and years to come. On the one hand, it must be made up for the decline in growth from The full extent of the pandemic on the coun- the peak of the pandemic, and on the other hand, tries of West Africa cannot be predicted conclu- the indirect effects of the global pandemic will still sively at this point in time, although develop- be felt for quite a while, but there will be a positive ments and trends are emerging as the situation attitude towards regaining its own strength. This remains fluid. What is certain, however, is that the may apply in particular to the cross-section of the pandemic will leave traces that will bring about West African region, where individual countries changes that will strongly influence the develop- can and will be back on the growth path much ment of the countries. It is therefore worthwhile faster. These external factors of influence also to take an indicative look at these impacts, since, include the decline in demand for exports, the contrary to a general prejudice, they do not have lower prices in the commodities market (including to be negative per se, but may also have trig- oil, gas, metals, or cocoa), volatility in the global gered positive developments or at least generated financial markets or the absence of tourists, as impulses and awareness for the right path. a result of which in all cases trade balances and foreign exchange earnings suffer greatly and gov- 27
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