Hi, Quartz Africa readers!
A time of forbearance
We all knew it was coming but it was still shocking when it did. World Bank this week laid out the severity of Sub-Saharan Africa’s economic outlook in the wake of the coronavirus global crisis. In summary, the region is set to tip into its first recession for 25 years, as the aggregate economy shrinks by between -2.1% to – 5.1%, wiping away some $37 billion to $79 billion in output for 2020.
The scale of the problem is much worse with the biggest economies Nigeria, South Africa and Angola, who were already in the doldrums before the pandemic. Still, the pandemic’s economic impact is so all encompassing even the smaller or mid-sized non-commodity economies are taking a hit too. The World Bank says the global economy is headed for recession so there’s no avoiding the difficult new normal.
There will be many challenging questions and decisions at this time but perhaps one of the more pressing ones will be about the debt African countries have been accumulating over the last decade. Alongside pledges of tens of billions of dollars in coronavirus fiscal support packages from the World Bank, IMF and Africa Development Bank among others, there have been increasingly loud calls for African debt relief.
The call was made again this week by a group of African economists and luminaries including former Nigerian finance minister Ngozi Okonjo-Iweala, Zimbabwean billionaire Strive Masiyiwa and Vera Songwe, head of the UN Economic Commission for Africa.
“Because time is of the essence, we call for a two-year standstill on all external debt repayments, both interest and principal,” they write. “During this standstill, the G-20 should task the IMF and World Bank with undertaking a comprehensive debt sustainability assessment and considering further debt restructuring, where appropriate, to preserve or restore debt sustainability.”
The authors think this consideration should go not just to low-income countries but also middle income countries who are “currently experiencing capital flight and unsustainable debt burdens.”
With African bilateral creditor debt payments for 2020 estimated around $14 billion, this is just the opening salvo to some long and painful negotiations. Some of these talks will start to get much more specific as we parse between multilateral debt, eurobonds, commodity-linked loans, and non-traditional bilateral arrangements. Sit tight.
— Yinka Adegoke, Quartz Africa editor
Stories from this week
Africa’s largest airline is starting to furlough workers. Ethiopian Airlines is taking cost-cutting measures to stay afloat amid the coronavirus pandemic by putting thousands of workers on furlough, reports Samuel Getachew in Addis Ababa. “Most of us are being forced to agree to a three-month leave without any payment,” says a full-time hostess who spoke to Quartz Africa on condition of anonymity.
Cameroonians are worried about coronavirus but also wondering about an absent president. Cameroon has the second highest number of coronavirus cases in Sub Saharan Africa with over 800 cases at press time, but citizens haven’t seen president Biya in nearly a month. Opposition leaders are questioning the “presidential silence” strategy, writes Amindeh Blaise Atabong.
Two new generations of locusts are set to descend on East Africa again—400 times stronger. After devastating thousands of hectares of farm land across East Africa last June, desert locusts are set to return to the region in coming weeks, reports Neha Wadekar from Nairobi. Scientists say the locusts never actually left and instead have been incubating new generations set to swarm again at 400 times the size of last year.
The French doctors who wanted to test vaccines on Africans and Western medicine’s dark history. There was rightly much outrage in reaction to a French TV interview where two doctors discussed experimenting with Covid-19 vaccines on Africans. Musa Okwonga explores the history of Western medicine’s experimentations with Africans but also how a more equitable and transparent scientific relationship could benefit all sides in the aftermath of this pandemic.
Curfews are a safer plan than total lockdowns to slow Covid-19’s spread in informal economies. Several large cities across Africa have gone on total lockdowns in a bid to curb or prevent the spread of Covid-19. The problem is that with so many people reliant on day-to-day informal sectors it has led to significant push back, which will only get worse, warns former Liberian public works minister W. Gyude Moore. He suggests developing countries switch from lockdowns to curfews among several other recommendations.
After months of lockdown, Africans in China are being targeted and evicted from their homes. In what is fast becoming a major diplomatic race row, African governments and the African Union have complained to Beijing about reports of Africans being kicked out of their apartments on suspicions they are carrying the coronavirus, writes Kwasi Gyamfi Asiedu. The Chinese government has tried to play things down but the news undermines the impact of its early moves to offer coronavirus-related aid to African countries.
Dealmaker
Telecoms infrastructure firm Helios Towers is eyeing pan-African expansion plans despite an economic lull amid the coronavirus outbreak. Helios’ expansion plans will be powered by funds raised after a listing on the London Stock Exchange last year.
African Development Bank has approved a $10 million equity investment in the Razorite Healthcare Africa Fund 1 (RHAF1). The fund, which targets a $100 million close, will provide growth capital for operating healthcare infrastructure facilities which show high potential for growth, as well as building new facilities.
Chart of the Week
Africa’s largest mobile money service is now under full African ownership for the first time. Kenya’s Safaricom and South Africa’s Vodacom have acquired UK telecoms operator Vodafone’s stake in African mobile money giant, M-Pesa, writes Yomi Kazeem. Under the new terms of ownership, Safaricom and Vodacom will fully control the M-Pesa’s products, brand and future plans.
Quartz Membership
What does the multi-billion dollar sports industry look like without sports? There’s no doubt the games and teams you love will come back, eventually. The question is how the industry will change in the meantime.
Other things we liked
The world has lost a giant of development economics. Last month, the revered Malawian economist Thandika Mkandawire passed away leaving behind a legacy of championing social policies and the developmental state. “His writings are so powerful because he had experienced the problems of development and social injustice first-hand,” writes Isabel Oritz for Africa is a Country.
Kenya’s labor market wasn’t made for a pandemic. Informal workers make up to 84% of Kenya’s workforce, according to official statistics meaning many people find themselves with their livelihoods devastated by the extensive lockdown to curb the spread of coronavirus. For Foreign Policy, Louise Donovan and April Zhu talked with informal workers who are struggling to make ends meet and note the additional burden that falls on women.
ICYMI
Obama Foundation Scholars. A fully funded one-year leadership and academic program at the University of Columbia (Dec. 13)
Carnegie African Diaspora Fellowship. A fellowship program for African-born academics currently living in the US or Canada (June 30)
*This brief was produced while listening to Killing Me Softly by Adina feat. Kuami Eugene (Ghana)
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