The Covid-19 Experience: Dark Clouds with Silver Linings

Though the social impact of the Covid-19 pandemic has been considerable, with Africa’s death toll surpassing 100 000 at the time of writing, the economic impact has been even greater, compounding the continent’s growing debt levels. Originally expected to peak around 2024/2025, the African debt crisis has now reached a new height, resulting in credit defaults in Zambia and threatening the same in Angola, Mozambique and several other countries. With policymakers now prioritising budget stabilisation, some governments may be hesitant to allow looser terms on trade if it is perceived as a threat to short-term revenue generation. Regional integration at the social and political level may also suffer, as national governments have less leeway to invest in developmental plans. This could fray tense social relations, which have boiled over into open conflicts across the continent in recent years, such as in Northern Mozambique and the Sahel. The current spectre of ongoing travel restrictions may also initially curtail the free flow of goods and services between countries, even where regulations already allow for it.

Despite the challenges posed by Covid-19, the impact of the pandemic has not been entirely negative, revealing some encouraging signs about the continent’s economic resilience and improved economic safeguards through the ongoing recovery. According to a high frequency phone survey conducted by the World Bank, far fewer Sub-Saharan Africans have reported losing their jobs compared to respondents in other regions. Unlike previous healthcare emergencies, Africa has managed to rely equally on its local credit market as it has on foreign aid, and the majority of Africans surveyed had access to healthcare when they needed it during the pandemic. While many foreign direct investment-driven projects in mining, oil and gas have suffered force majeure, many locally driven projects, such as the Dangote refinery near Lagos in Nigeria, have continued unimpeded. No overarching project has demonstrated the continent’s newfound resilience as well as the PIDA PAP Phase I, which aims to make Africa’s economic integration possible. To date, the plan has initiated over 400 infrastructure projects across the continent in a variety of sectors, including road, rail and port infrastructure, and energy production and transmission. Roughly half of these projects are in the operational, construction, tendering or final investment decision phases and have collectively bequeathed the continent with over 3 506km of additional transmission lines and extensive fibre optic cable networks among other achievements.