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S-RM: Political and Security Concerns for Commercial Operations in a Post-Pandemic Africa

Many African governments have had to weigh up the difficult decision between facing a humanitarian crisis or an economic one as COVID-19 infections hit the continent. While countries such as Rwanda and South Africa have been lauded for their rapid and wide-reaching lockdown response to the pandemic, public pressure to ease COVID-19 restrictions is now mounting amid the worsening economic consequences of the crisis. International institutions and regional think tanks are warning of the severe economic challenges that will affect much of Africa in 2020 and their concerns are not misplaced.

According to the UN Economic Commission for Africa, in the best case scenario, Africa’s GDP for 2020 will fall from 3.2 percent to 1.8 percent; in the worst case, the economy could contract by 2.6 percent as a result of the pandemic. This would push a further 29 million people into poverty. To compound matters, Africa is also increasingly debt distressed, and while international bodies such as the International Monetary Fund and World Bank are discussing debt relief, China’s Export Import Bank, for example, has yet to show the same commitment. This is particularly concerning as, according to John Hopkins School of Advanced International Relations’ China Africa Research Initiative, around 20 percent of all African government debt is owed to China. The combined impact of COVID-19, government responses to the outbreak and the wider global economic consequences will be particularly acute in Africa. The sharp fall in oil prices has heavily impacted the region’s oil-exporting economies, including Angola, Nigeria, Gabon and Equatorial Guinea, while other economies have been impacted by price fluctuations in other commodities. Weak external demand, disruptions to supply chains and reduced domestic production will curb economic growth. Furthermore, the collapse of the informal sector, which employs 66 percent of Africa’s workforce, will place significant social and financial burdens on governments and relief operations.

But while managing the economic fallout is paramount, many African countries will also be faced with increasingly complex political and security environments, which will become progressively volatile in the post-COVID-19 context.