As the COVID-19 ravages the world, creates panic and inflicts pains on people, a financial expert has warned that its effects on the domestic and global economy may be worse than envisaged.
The Chairman/Founder of AACS (Consulting & Principal Investments), Dr. Falil Ayo Abina, who stated this while participating in the Commonwealth Africa Summit 2020, held in London recently, said, “the effects of coronavirus on local and global economy will still be felt long after a cure is found for the disease.”
Speaking in one of his presentations, Abina said, “As the world battles with the uncertainty around the spread of the coronavirus, I am worried about the economic pandemic it is causing, with markets crashing out of panic.
“Oil prices have declined from $70/ barrel at the beginning of the year to close to $30/ barrel on the back of declining demand and a glut in supply. When this is considered against a 2020 budget predicated on a benchmark of $57/ barrel in Nigeria, the full effect of the economic pandemic starts to be even clearer. This may well prove an even larger challenge in the long run.”
The AACS chairman, whose presentation was titled: “Thoughts on the Way Forward for Africa in 2020,’ said despite many challenges in the continent, it could not afford to rest in the comfort of the status quo.
“Instead, we must strive to improve productivity and the overall quality of life across the continent. We must come up with disruptive solutions, create the underlying capacity to bring them to life, and push ourselves to lead in 2020 and beyond.”
He, however, noted that despite significant uncertainty, the African continent was positioned for growth in 2020, adding “living up to this expectation will require African nations to simultaneously execute on outward and inward strategies.”
He added, “Outwardly, African nations will need to strengthen their alliances with key emerging markets; most notably with the United Arab Emirates, India, and Russia. While it is even more important that momentum is maintained to drive regional trade integration.”
Stressing the need for regional trade integration to enhance the productive capacity of the continent, Abina said, “Africa’s ability to trade and do business with itself is the greatest opportunity for realising its growth potential, but this is often overlooked.
“At just 18 per cent, Africa currently has the lowest percentage of intra-regional trade in the world, compared with 70 per cent in Europe, 55 per cent in North America, 45 per cent in Asia, and 35 per cent in Latin America. However, a new path is being charted towards Africa becoming a single continental market. If this is successful, it will lead to an economic revolution on the continent.”
He pointed out that for Africa to experience the kind of growth required to lift millions of the citizens out of poverty the continent has to strengthen its infrastructure provision.
He said, “Frequent power and water cuts are a reality throughout West Africa. These issues come with consequences. The inadequate supply of electricity prevents small businesses from thriving and subsequently has repercussions on households’ incomes and ability to provide for themselves.”