14 April 2020
Many Nigerians seem to be of the opinion that the country has dodged a bullet in terms of the devastation the coronavirus is wreaking across Europe and the United States. Such a position is misguided, going by the comments of Carlos Lopes, Associate Fellow, Africa Programme, Chatham House.
Lopes was speaking during a video Q&A session about the economic impact of the pandemic in Africa as a whole, but his points might as well have been directed at Nigeria, the most populous country in the continent and its largest economy.
Watch the video below.
Lopes warned that the virus is moving in waves, affecting regions and continents at different times. So although, the numbers in terms of fatalities are still very low in Africa, it could change in the future.
The impact of the pandemic is also still minimal in the continent because of the shortage of testing facilities and poor data collection. Nigeria is currently reporting only 343 infections and 10 deaths. The real picture could be much worse.
On economic impact of the virus, Lopes expects it to be “devastating”, especially for African countries like Nigeria that are dependent on commodities like oil. The virus is affecting demand and affecting currencies, also leading to rising debt. Some of those conditions were already materialising before the virus, but they have now been exacerbated. African countries already have weak logistics and transport networks and these are likely to compound the sort of supply chain problems the more advanced countries are facing in dealing with the pandemic.
Lopes also highlighted the reality that many in Africa are involved in the informal sector with a daily source of income. Any stoppage of activity in this situation is likely to be damaging for those involved. There is also the absence of a tradition of social distancing, which has proven effective in minimising the spread of the virus.
African states have in the past proven to be not very good at utilising stimulus packages. There is little in terms of safety nets for banks via monetary policies. The academic stressed that a moratorium on debt servicing for African countries was not enough because demands for repayment would still be made at when countries come out of the virus and this is a time funding will be needed to aid recovery. Instead, there should be “debt service forgiveness”.
He warned that if steps were not taken to check the spread of the coronavirus in Africa, the continent could become a “repository” for the virus and a threat for the rest of world. Healthcare systems in Africa were not strong enough to tackle the flow, with even advanced nations struggling.
He hoped the challenges of dealing with virus will lead to governmens in Africa making moves in the Keynesian direction of more investment in public services and developments in accessing healthcare remotely