The double hit to supply and demand caused by the COVID-19 outbreak is affecting virtually every economy in the entire world, causing extreme uncertainty in many countries, with the exception of a resilient China. This event has further strengthened the case for an essential structural separation of African economies.
Pandemics, lockdowns and economic “coloniality”
Despite accounting for less than 3% of official COVID-19 cases worldwide, Africa has been hit incredibly hard by the global economic crisis, with millions of men and women falling into extreme poverty and underemployment. Africa is currently experiencing its worst recession in a quarter of a century, with a 3.3% decline in GDP, compared to the previous year.
Furthermore, migrant remittances, which supplant public aid for development every year and provide much-needed aid to poor households, are expected to be cut by more than 20% in 2020 (i.e. $18 billion). According to the World Bank, per capita production in Africa is at risk of dropping to as low as in 2007! However, the mechanics driving this recession in Africa have largely been imported from abroad.
With the exception of South Africa, which has reported the highest number of cases in Africa, the main factor penalizing African economies is the economic downturn in industrialized countries. The containment measures taken to mitigate the health risk for major economies have slowed global activity, leading to a collapse in demand for raw materials and a sharp drop in prices, particularly in the case of oil. This abrupt halting of the economy has led to a decline in activity in Africa, causing employment rates and the revenues of economic players and public finances to plummet. The public deficit has risen sharply—and debt has increased to almost unsustainable levels in some countries.
These exogenous shocks reflect a long-established pattern: Any disturbance to industrialized economies will have repercussions for African economies, of varying degrees and severity. The dominance of the historically-colonial raw material export sector, in practice, has made the African continent a geographical extension of industrialized economies, a sub-space tailored to the needs of international markets. This is known as “economic coloniality”.
Conversely, the globalization of production modes and major changes to the world economy have not affected Africa’s role in global productive processes. Natural resources tend to be de-territorialized rather than processed, and manufactured products imported, due to the nature of Africa’s institutional, productive, economic and financial structures, its infrastructure, and its framework for incentives and training.
African economies: the end of the “africa rising” mirage
The mirage of the so-called “emerging” economies, based on reported growth in the 2000s, has created the illusion known as “Africa rising”. This hollow promise was largely based on the macroeconomic ripple effect felt in Africa due to three decades of commodity-intensive and transformative growth in Chinese (and Asian) markets. The result was growth driven by commodity exports. The “Africa rising” theory also predicted that potential future markets would emerge in this densely populated continent, which were not be left to China, rather than focusing on determinant endogenous factors specific to Africa.
Little diversification, a failure to develop more sophisticated exports, and the stagnation of added-value in manufacturing (manufactured goods) are all factors characteristic of enduring colonialism, insufficient processing, and limited competitiveness and productivity. This explains why, as well as population growth, unemployment has only been marginally reduced by high growth rates, a paradox that could be resolved through industrialization.
With a few rare exceptions (South Africa and Mauritius), African economies have atrophied industrial sectors, viewed as peripheral to foreign industries. However, establishing better living and working conditions in Africa will not be possible without improving the quality of goods and services and achieving productive transformation.
Endogenous knowledge and capital: strategic resources to be mobilized
Africa’s high vulnerability to exogenous shocks, demonstrated in this instance by the effects of COVID-19, and the limitations of extractive growth, should call into question the central issue of modern industrialization. Alongside manufactured goods, services with high added value, intermediate goods, semi-finished products and components account for a large proportion of international trade, and thus of resource processing. Achieving these targets should involve greater mobilization of potential African stakeholders looking for new value chains.
The need to decentralize colonial-type supply chains, in order to protect Africa from the destabilizing effects of stagnation and contagion (COVID-19), offers a new perspective which highlights the importance of decolonizing economies and adopting a disruptive resource processing model. In other words, a radically new approach to creating added value is needed which integrates previous or even traditional production modes with digital innovations and green economy aims. Therefore, this processing model must be designed based on endogenous knowledge and resources, taking into account indigenous codes for interactions, reciprocity and donations, the use of different pharmacopoeias by health care services (in Madagascar, Cameroon and Benin, for example), and the mobilization of local production techniques and materials: construction, agriculture, food, productive crafts, leisure activities, etc.
Africa’s social and public response to the pandemic has demonstrated its creative endogenous potential through the local production of masks, homemade protective equipment and indigenous medicines.
After being labeled a partisan fad by conservative thinkers in the development sector (including within Africa itself), the integrated pan-African region is finally emerging from a long purgatory, offering opportunities thanks to its geographical landscape, demographics, and potential for economies of scale and continental value chain development. From this perspective, a new philosophy and institutions for economic progress can be developed, based on endogenous knowledge and capital, which prioritize the needs of African societies.
Decolonizing development sciences
Adopting this type of model, which reflects the current thinking and preferred strategy of Africa’s elite, would require a rejection of dominant approaches to economics and a willingness to “decolonize” development sciences and “free minds,” to paraphrase Kenyan writer Ngugi Wa Thiong’o. The entire system of theoretical development beliefs and myths needs to be reviewed from the ground up, and major epistemological philosophies abandoned.
COVID-19, serving both as a lesson and an opportunity, has transformed the concept of “decolonizing knowledge”, previously viewed as epistemic disobedience and an entirely radical viewpoint, into a clear necessity. Macroeconomic comforts are now becoming obsolete and market fundamentals are being contextualized, revealing new forms of knowledge: non-Western, indigenous fields of knowledge, which mobilize health, social and economic support to benefit everyone in society.
The opinions expressed on this website are those of the authors and do not necessarily reflect the official position of their institutions or of AFD.