Report Recommends Smart Approaches to Reopen Economies
McKinsey & Company, a global management consultancy services company, has advised Nigeria and other African countries to find “smart approaches to reopen economies in a calibrated way that brings key industries back into operation, while ensuring safe ways of working.”
The firm stressed that the COVID-19 crisis would likely persist for some time.
Therefore, it advised that policy makers in Nigeria and other countries in the region must adopt measures to reopen their economies in order to save livelihoods while saving lives.
McKinsey & Company stated this in a 27-page report titled: “Reopening and reimagining Africa: How the COVID-19 crisis can catalyse change,” obtained by THISDAY yesterday.
The report stated: “The economic outlook is also bleak. Globally, while some countries are past their peak rate of infections, concerns about virus resurgence continue to raise uncertainty. In a recent McKinsey survey of global executives, 40 per cent anticipated a muted economic recovery.
“A prolonged global slowdown, combined with continued lockdowns in Africa could plunge the continent into its first economic recession in 25 years while threatening the jobs or incomes of 150 million Africans, one-third of the entire workforce is at serious risk of resurgence in infections.
“Accordingly, governments will need to build the capacity to alternate between reopening and restricting economies on a granular, local level— akin to developing and flexing a muscle.”
It said COVID-19 threatened lives across Africa, with the World Health Organisation (WHO) estimating that the continent could see up to 190,000 deaths over the next year should the pandemic persist.
It, however, noted that in the face of this challenge, governments in the region have acted fast, both to strengthen the capacity of health systems and to contain the spread of the virus.
McKinsey presented nine big ideas to reimaging African society, business and government. It listed the suggestions to include the acceleration of Africa’s digital transformation, placing a renewed focus on serving the needs of vulnerable urban populations, and transforming African healthcare systems with a focus on resilience and equity.
“African business can be reimagined by driving sector competitiveness through innovation and consolidation, reshaping Africa’s manufacturing sector with a bold focus on supply chain self-reliance and catalysing the formalisation of African economies.
“For governments, the opportunities lie in planning for a more active role in the economy, forging a stronger social contract between government and its citizens, and accelerating momentum in regional and pan-African cooperation,” it added.
The report also laid out a three-step plan for the safe reopening of economies, based on an analysis of reopening strategies globally and in Africa, starting with defining a tiered set of local response measures, followed by steps to triage certain regions or sub-regions and then to continuously monitor progress.
“The first step should be to define a tiered set of local response measures, from the least restrictive to the most restrictive, to be applied to regions across the country. “Each tier would include measures to protect both the general population and high-risk populations (the elderly and people who are immuno-compromised) and would also specify which sectors can open and operate. Depending on a country’s geographic diversity, a number of tiers can be established.
“The second step is to “triage” regions or sub-regions across the country to determine which tier each of these geographic areas would fall into. The triage process would be dynamic and would incorporate new data as they emerge.
“The third and ongoing step is to monitor progress continuously. Once regions are triaged and measures are implemented, continuous assessments will be required to ensure that these measures are being adhered to.
“Governments would need to identify the triggers or thresholds for moving a region into a less restrictive tier— or a more restrictive one. In this regard, it is critical that decision making is fact-based and data-driven, with a constant focus on safeguarding both lives and livelihoods,” it said.
According to Mckinsey, even as governments and businesses respond to the immediate crisis and execute reopening strategies, leadership and foresight would also be required to shape the path to the ‘next normal,’ adding that the COVID-19 crisis provides impetus to reimagine fundamental aspects of African societies, businesses, and government.
“The crisis is accelerating trends such as digitisation, market consolidation, and regional cooperation and it is creating important new opportunities— for example, to boost local manufacturing, formalise small businesses, and upgrade urban infrastructure.
A powerful and collaborative effort will be required to ensure that Africa’s “next normal” is characterised by inclusive development, effective delivery, and innovative approaches to solve the continent’s greatest challenges.
“Just as businesses and governments take immediate steps to strengthen health systems and restart economies, they also need to think ahead and plan for the continent’s “next normal,” the report added.