IFC Insights: How to Counter COVID-19’s Impact in Africa

By Jason Hopps

NAIROBI, Kenya—Mo Ibrahim has long been a man on a mission. Several missions, in fact. The Sudanese-born telecoms tycoon, who trained as an electrical engineer, founded Celtel International in 1998, building it into one of Africa’s leading mobile telephone companies. In 2006, a year after he sold Celtel and guided by a belief that governance is the basis for growth and prosperity, he established the Mo Ibrahim Foundation to promote African leadership and good governance on the continent.

Deeply passionate about Africa, Ibrahim is a fierce critic of those who fail it, while loudly—and financially—championing its heroes. In 2007, he launched the Ibrahim Prize for Achievement in African Leadership, which pays out $5 million to individual winners over 10 years. Recipients honored for uplifting their countries and smoothly transitioning power to successors are South Africa’s Nelson Mandela (honorary recipient), Liberia’s Ellen Johnson Sirleaf, Namibia’s Hifikepunye Pohamba, Cabo Verde’s Pedro Pires, Botswana’s Festus Mogae, and Mozambique’s Joaquim Chissano.

The sudden rise and sweep of COVID-19 has left Ibrahim impressed with Africa’s immediate response, but cautious about the continent’s future, especially concerning the potential long-term economic fallout. In this edited interview, Ibrahim talked about what he sees as Africa’s prospects during and after COVID-19—and why strong partnerships must support countries’ future growth.

Q. First, how are you coping personally through these difficult times?

A: It hasn’t been easy, but I am fine. What COVID-19 has done is highlight the issue of inequality. There are people with limited access to support or the medical services they need, living in cramped accommodations. I really feel for those who are struggling.

Q. How do you feel African leaders have handled the initial stages of coronavirus?

A: I have been impressed by how they have so far dealt with this crisis. Fortunately, Africa had a window while the virus raced through Asia and Europe and elsewhere, and most African countries made good use of it. There have been numerous calls between African and European leaders trying to instigate coordinated actions. It was impressive. Africa’s experience with Ebola and other health crises also likely helped.

Of course, African countries couldn’t do what Western countries did when they confined people for long periods of time to slow the spread of the disease. If you do this in Africa, people will die of hunger. Africa could also not match the generous financial support of Western countries. But really, almost without exception, African governments took the threat seriously. I am really impressed by the way African leaders stepped up, but they need to keep on their guard during the days ahead.

Q. How important will partnerships be to helping Africa weather the crisis in the long term?

A: Partnerships will be essential, and we really need coordinated, long-term global action to deal with something as serious as coronavirus. In April, there was a Call for Action issued by 18 African and European leaders who said that we cannot declare victory over the pandemic until we are victorious in Africa. This was a wonderful statement that called for four priorities: strengthening Africa’s emergency health response capacity; sharing scientific knowledge and expertise; providing urgent humanitarian supplies for the most affected communities; and deploying a very large economic stimulus package. Of course, we need this goodwill to be translated into action.

Q. Are you optimistic that it will?

A: It is a strange time because the international order is frayed. Unfortunately, at a time when the world should come together, we’ve seen major powers sniping at each other. International organizations have been marginalized. When you are in mid-flight, it’s not the time to tinker with the engines. Let’s land safely first and then deal with how to improve governance at some of these organizations. I’m worried about the global fracture, but I hope that countries and organizations will come together, and partnerships will be formed to help in Africa and elsewhere. There is the health crisis, of course, but we need more emphasis on the economic crisis that is already here, with Africa predicted to fall into its first recession in 25 years.

Q. What would help make partnerships succeed given the fractured state of world politics?

A: That’s not an easy question. People need to be generous in spirit and must come together as a community to fight this invisible enemy. Unfortunately, there is a blame game and point scoring going on. If the virus is left undefeated anywhere in the world, it will most likely return and cause havoc again. We must work together during this crisis and first put out the fires everywhere.

Q. What should international organizations and high-income countries be doing to support lower-income countries in Africa?

A: Debt relief is one way to help. The G20 has offered some support freezing debt payments. It’s a good start, but it’s not enough. We need a much stronger response. To illustrate this, total African debt is about $365 billion, with $44 billion in payments due this year. It’s not enough to suspend payments, some should be restructured or forgiven. The IMF is best placed to offer the most decisive intervention. The tools are there, such as IMF’s special drawing rights, and they have been used before successfully. This is the time to use them again. The World Bank and IFC have shown good intentions, but we need these and other organizations to act decisively. In many ways, I’m more worried about the economic impact of coronavirus on Africa than the health impacts. The economic fallout can cause much more long-term damage. This is on top of the locust swarms in East Africa, so millions could die of hunger because of a perfect storm of crises.

Q. Africa’s private sector also has a large role to play through the crisis, by providing essential goods and services. How can it best be supported?

A: The private sector is very important during this crisis. Unfortunately, it is fragile in many parts of Africa because of a lack of investment. Even if debt is cancelled, we are talking about public debt. There is also a debt problem for Africa’s private sector that we should be looking at. In Western countries, companies are being offered support or even being bailed out, but who is doing this in Africa? We need a way to protect and support our companies in Africa. Organizations like IFC need to step up with specific support for portfolio companies and they need to move quickly.

Q. Which sectors in Africa need the most help?

A: All need help, but we really need to strengthen health systems in Africa. Even in the West, this virus has been humbling. There are only 10 countries out of 54 in Africa that offer universal free access to health care. We need to treat health as an important public good and we need greatly increased investment. There is definitely scope for greater private involvement, but whatever models you have, whatever mix of public and private, everybody must have access to health care in Africa. Then we must also pay attention to the most impacted sectors, like tourism and transport. As key local employers in Africa, businesses in these sectors are paying a heavy toll because of the crisis.

Q. It’s too early to talk about victory over the pandemic, but could Africa one day emerge stronger because of it?

A: Yes, I can see a lot of potential. Now people in Africa understand that at times like these, unless they come together and act in unity—unless they can develop strong continental and even international partnerships—they will be completely overlooked. You talk about personal protective equipment and other vital health items and no African country has enough purchasing power to secure them alone… But by coming together, they are really able to do something. We must really understand how important it is to act together and I think that will be an important lesson we take from this crisis. I also strongly believe in my continent’s specific mix of resilience and dynamism and its innovative spirit, mostly driven by our young majority.

Published in June 2020

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