Will COVID-19 Derail the African Century?
Africa's high urban population densities, high numbers of day workers, and weak medical systems would seem to make it highly vulnerable to COVID-19. But Africa could emerge from the pandemic with less lasting damage than many fear.
NEW YORK – In The Fortunes of Africa, author Martin Meredith describes a Dutch sailing ship that dropped off a load of laundry for the Khoikhoi, the local inhabitants of the southwestern cape of Africa whom Europeans called Hottentots. The year was 1713. The Khoikhoi washed the laundry and were duly paid. But the laundry was carrying smallpox. Over the next year, the community was laid to waste. Nine out of ten Khoikhoi died, and the tribe eventually disappeared from the Cape.
Once again, a foreign pathogen is threatening Africa. The full impact of COVID-19 will be felt there later than in the rest of the world, but the financial markets have already exacted their toll. Even before the virus has made much headway on the continent, African currencies, sovereign debt, and public equities have fallen dramatically, in many cases experiencing losses far greater than in developed or other developing and emerging markets. The impact on African equity markets has already been worse than in the depths of the global financial crisis.
But, if managed properly, the pandemic may prove to be a loud hiccup on the way to realizing the African Century. As an investor and philanthropist in Africa for more than a decade, I have been focused on the unparalleled opportunity that the continent represents. As former South African President Thabo Mbeki put it in his 1999 victory speech, “The people of our country have given an unequivocal directive that we must work together for the African Renaissance, for the emergence of the 21st Century as the African century.” Strong underlying growth, attractive demographic trends, improved governance, stability, and transparency imply enormous opportunity over the long run, with the potential for tens of millions to be lifted out of poverty.