Senegal - Africa - Economy - Crisis

Africa faces pandemic, climate and geopolitical shocks-Report

APA-Dakar (Senegal)

In recent years, the African continent has been suffering the consequences of crises that were not of her making .

“Africa under the triple shock pandemic, climate and geopolitical.” This is the theme of the 3rd economic report by the influential Moroccan think tank Policy Center for the New South (PCNS), which was presented on Friday 4 November in Rabat.

 

At the opening of the proceedings by video conference, Fathallah Oualalou, senior researcher at PCNS, said that "this report highlights the three shocks that have hit the world in recent years, but which have affected Africa.

 

“The first is the 2020/2021 pandemic shock. The second is geopolitical, with the war in Ukraine and its consequences for Africa in the field of energy for both producing and importing countries, but also food and economic. The third shock is climate,” Mr Oualalou said.

 

Larabi Jaidi, coordinator of the PCNS annual report on the African economy, argues that economic activity on the continent has been disrupted by restrictions put in place to combat Covid-19, despite the low prevalence rate. To cushion the blow, Africa believed it could rely on its informal sector, which, according to researcher Akram Zaoui, “has always played a role as a shock absorber in times of recession by allowing a certain category of workers to move into the informal sector.”

 

“With the coronavirus, it is the informal sector that has been most affected and instead of playing the role of economic stabiliser, the informal sector has played the role of destabiliser,” noted Mr Zaoui during the first panel devoted to performance, vulnerabilities and transformations in Africa

 

On climate change, the findings are not so good either, according to the report's conclusions presented to a select audience on Friday. “Africa is one of the regions most affected by global warming,” said Larabi Jaidi, noting that it “faces a high number of climate-related natural shocks in 2021: decreasing rainfall shows an increase in water stress in various parts of the continent, particularly in North, West and Southern Africa.”

 

“The economic characteristics of most African countries, particularly in sub-Saharan Africa, have amplified the effects of climate change on the social conditions of the population,” he said. This makes climate change a real threat to the price and financial stability of African countries.

 

The black continent is also facing a third shock linked to the Russian-Ukrainian war. Last February, Russia launched a "denazification" operation in neighbouring Ukraine, with unprecedented consequences for international trade. "Africa has experienced the most severe recession in its history," the PCNS report says, adding that "the shock has been felt through a number of channels".

 

“The first is commodity prices. The war in Ukraine is not only affecting the price of energy, but also a range of commodities, including food," says Jaidi. According to Mr Jaidi, "the second channel is that of financial tensions and, more generally, uncertainty, which negatively affect investment and consumption.”

 

Finally, the third channel is that of foreign trade. Beyond the external demand channel, economies are also likely to be affected by disruptions in production chains,' he says, predicting 'a growing risk of food insecurity and social unrest' for 'countries heavily dependent on grain imports from Ukraine and Russia, such as Egypt, Morocco, Tunisia, Senegal and Tanzania'.

 

The unfortunate thing is that 'as long as there is no way out of the crisis, there will always be this uncertainty in the future'. On the other hand, all does not seem lost. In the face of these shocks, "Africa offers hope", sighs Fathallah Oualalou, advocating "the need to transform the productive fabric of African countries, to diversify their economies so that they can gradually leave their dependence on raw materials".

 


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