Africa will not defeat the coronavirus alone. West must dig deep before it’s too late
Fifteen years ago a group of rich countries gathered for its annual get-together at the Gleneagles hotel in Perthshire, Scotland. A number of African leaders were invited to the summit, from which a deal emerged: the west’s major powers would provide debt relief and aid in return for cleaner and better governance.
The Gleneagles deal wasn’t perfect but it marked a high point in international cooperation. At a time when the big developed nations can’t even agree a collective response to the Covid-19 pandemic among themselves, it all seems a long time ago.
The comparison between the financial firepower being deployed in developed nations and the low-income countries of sub-Saharan Africa is stark. The US Congress has just voted for a $2tn stimulus package. The UK has had four big budget announcements in little more than two weeks. The eurozone has abandoned fiscal austerity and embraced a “whatever it takes” approach.
By contrast, Africa is living off scraps. The World Bank has announced $14bn of financial support; the International Monetary Fund has a war-chest of $10bn available for countries in difficulties through a rapid response fund. The leaders of the two organisations are urging creditor countries to suspend debt repayments so that the poorest countries can spend more on health systems.
But this is not remotely comparable with what developed countries are doing for themselves. The World Bank and the IMF are using the tools developed in response to the banking crisis of 2008 in conditions that are immeasurably more dangerous for the low-income countries of Africa.
And ultimately for the developed world, too, of course. At the moment, the incidence of Covid-19 in sub-Saharan Africa is relatively low, with many countries reporting only imported, as opposed to locally transmitted, cases of the virus.
This had led to complacency. Africa, it is said, is too warm for Covid-19 and its young population will be able to cope with the pandemic without the death rates seen in countries with a higher proportion of old people, such as Italy. Neither argument really stacks up. The number of cases in Florida suggests that Covid-19 can spread where the weather is hot; and being young in Africa is not the same as being healthy. Malnutrition and malaria are rife: the coronavirus kills through viral pneumonia and 400,000 African children die from pneumonia every year.
The warning signs are clear. New cases of Covid-19 are on the rise, suggesting that Africa is perhaps a few weeks behind Europe. The NHS, just about coping with Covid-19, has 7,000 critical care beds; the average low-income country in sub-Saharan Africa has 50, according to Kevin Watkins, the chief executive of Save the Children. There are shortages, not just of ventilators but of more basic kit such as medical oxygen. Africa is not equipped to cope with a public health emergency and it is now a race against time to prevent the pandemic taking hold. What’s more, what happens in Africa will have global implications. There is little point in developed countries sorting out their own problems only to find that the virus is reimported from Africa, as it almost certainly would be.
To prevent this from happening, testing needs to be rapidly scaled up, the relatively small number of people infected need to be isolated and their contacts traced. Shortages of diagnostic equipment, medical staff and medical oxygen have to be addressed.
There is, though, not the remotest prospect of the world’s poorest region being able to do this on its own. Low-income African countries are seeing demand for their exports collapse as a result of simultaneous recessions in the world’s three biggest markets – China, the US and the eurozone. Many of them are already struggling with high levels of debt and – unlike in developed countries – the option of borrowing more money to invest in health systems doesn’t exist. In the west, states can borrow at historically low interest rates; for indebted low-income countries rates are punitively high, and rising.
So what needs to be done? First, the rich developed nations have to realise that Africa’s looming crisis will eventually be their crisis. Second, there needs to be a coordinated international response rather than the current mishmash of funding commitments and initiatives, which lack any real coherence. The World Health Organization should identify what is needed in each country and the IMF and World Bank should provide the necessary resources. This is going to require the leadership the UK showed in 2005 but doesn’t any longer, and a lot more money.
While welcome, the scaling up of financial support seen so far is not remotely commensurate with the scale of the threat. The World Bank needs extra resources to be able to deliver support through soft loans and grants. The IMF needs to be able to respond to the biggest flight of capital from developing countries on record by issuing new special drawing rights. These are reserve assets that increase the amount of money flowing round the global economy and provide member states with extra protection against speculative attack.
Together, the World Bank and the IMF need a comprehensive debt-relief plan, rather than the limited scheme announced this week. This would involve the debts owed to all governments, including the large sums owed to China, and repayments on money borrowed from the World Bank and the IMF. Measures to prevent private investors from preying on indebted countries are also required.
The priority is to use the small window of opportunity to prepare sub-Saharan Africa for a health emergency. Beyond that, the fiscal response should involve strengthening health systems and targeting resources at those who need them most through cash transfers. Africa needs redistribution more than it needs helicopter drops of money.
What’s certain is that financial help needs to arrive and arrive soon. Otherwise the world is sleepwalking to catastrophe.