Africa is often portrayed as a continent plagued with endemic violence, disease, famine, poverty, and hardship. While there is certainly some truth to this characterization, this view obscures the emergent reality of a modernizing and industrializing Africa which outpaces even many western, developed countries in terms of real GDP growth rates. The threats to the African continent’s stability notwithstanding, massive levels of foreign direct investment, domestic marketplace diversity, and strong, pre-COVID-19 consumer confidence cannot be overlooked when discussing the state of Africa’s economy. The diverse nations comprising Sub-Saharan Africa serve as fascinating case studies in the 21st century global economy, demanding both respect and scrutiny from the international community.
While World Bank projections have growth slowing to -3.3%, due to economic fallout from the pandemic, this would be the first recession the region has seen in 25 years. Though the African economy has seen exceptional economic growth and progress in recent years, the fundamentals of its economy are certainly being tested by this pandemic. How well it bounces back from the current downturn will be an indication of the health and resilience of its underlying financial framework.
While countries like the United States and Germany struggle to break the economic downturn caused by the pandemic, macroeconomic outlooks for western African nations remain generally optimistic. To be sure, such outlooks are predicated on two main factors: vaccine distribution and the return of consumer confidence. While the former may be slightly easier to measure, with the emergence of supply chain tracking and monitoring systems employed by public and private organizations, the latter is not so measurable in the short-run. Consumer confidence can be difficult to accurately forecast, even in the absence of a global pandemic. Accordingly, the optimism that comes with vaccine creation and distribution must be qualified with a realistic picture of what it will take from African consumers to return to pre-COVID growth.
The World Bank, numerous NGOs, and some public-private partnerships are placing vaccine distribution as the central priority for the 2021 humanitarian agenda. The secure distribution of verified and safe vaccines is paramount to a healthy economic recovery, and, in the age of the interdependent, global economy, the international system is giving support. The World Bank just last week gave $30 million to aid efforts in Rwanda. Even the World Trade Organization (WTO) has underscored the importance of vaccine rollout on economic prosperity, with statements from its newly-elected leader, Ngozi Okonjo-Iweala, highlighting the role of global health in global financial stability.
If vaccine rollout is successful and equitable, then a strong rebound in consumer confidence will surely follow. This is not unique to Africa, as many nations across both the developing and developed world have already experienced positive signs of recovery. In Africa, however, economic rebound can be halted by Islamist insurgencies, floods, famines, and other dangers all too easily. This infrastructural instability is why the entire international community must rally behind Africa’s recovery. If not spurred by altruism, then simply from their own self-interest, developed nations have incentives to devote resources to assist Africa’s recovery. As many have opined: when Africa wins, the world wins.
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