COVID-19: We need an AFRICAN MARSHALL PLAN – A response to Prof. Soludo By Kazeem Bello

Prof Soludo is a professional colleague that I have tremendous respect for. He is very brilliant, deeply knowledgeable and smart.

I took time to read his piece, titled COVID-19: Can Africa afford lockdowns? I believe the erudite Professor is just concerned and rightly thinking aloud about the Economic consequences of the Lockdown in Africa due to the pandemic. There is absolutely no doubt that the Professor is very correct in his postulations. The economies of African countries were at the edge prior to the severely damaging and unpredicted pandemic. From any perspective you may want to examine this current issue, Africa’s fragile economies cannot collectively or individually sustain the economic consequences of this unprecedented crisis.

While you may tend to agree with the Professor regarding copycat approaches by Africa leaders to address the pandemic, there is no doubt that African countries collectively lack the financial strength to tackle the economic downturn tat will follow the current approach to fighting the pandemic.

We have seen the major world powers launching billions and trillions in stimulus packages. The oil gulf countries are not left out. Some South American countries are also following suit. It is perhaps only in Africa as Professor Soludo has correctly stated that we are left with no choice than to ask for debt forgiveness, grants and more loans that will most likely not solve the problem but compound the problems.

Professor Soludo cited several other challenges that we have faced and successfully overcome in Africa without lockdowns. We may perhaps conclude that African Governments probably took panicky measures or measures that were not generally reflective of their peculiar circumstances but which were dictated by “follow follow” strategies of the worst hit countries.

For some reason, somebody may have created this virus and then followed up by creating a panicky gimmick that indicate that lockdowns could stem the spread of the virus, or is the possible solution for the problem. Like Prof stated, there was no lockdown during the Ebola epidemic. We, however, need to be very careful and mindful of how we approach this issue especially when it is human lives that are of concern here.

The Prof is definitely arguing in favor of, and actually concluded by asking African Governments to immediately open up their economies because the lockdown is not sustainable.

He gave some heart breaking facts to justify his call and this can be true really. One thing that Analysts have stressed is that a major Economic recession that will hit African countries hard cannot but be inevitable anyway.

The tragedy with that is perhaps what I have identified in my recent write up, when this pandemic just started to show its ugly face. That is the fact that a major global recession is inevitable. It will surely occur, no amount of stimulus incentives can stop that. Now with African countries, it will be double tragedy of back to back recession if some economies in Africa do not even see outright depression.

The reason for a double recession in Africa is simply due to the total dislocation of fragile palliatives created for most economies in Africa that had pre-existing conditions or issues prior to now, which have been projected to slow down the continent’s growth rate despite the commencement of AFCTA. Coupled with the unavoidable global recession, it will be extremely detrimental to Africa’s economies at least in the next 3 to 4 years. With a growth rate projection of 4% at the start of 2020, now downgraded to negative growth of -3%, it will be very challenging and tough times for Africa.

I had private discussions with some professionals around here in the US, they are painting gloomy pictures of the coming ethos in Africa. Bloomberg News wire last week ran a full features on Africa and it was short of calling for a major intervention to avoid a catastrophe greater than Coronavirus. My conclusion is that it is time for Africa to come together and declare the continent an Economic disaster region of the world and follow that up with the creation of a “Comprehensive Marshall Plan” Economic Package that will leave no country behind in Africa. When Europe and Asia got devastated by the WW11 damages and economic woes, it was the Marshall Plan, carefully created and guided by the World Bank (then Bretton Wood Bank for the Reconstruction and Redevelopment of Europe and the Americas) that brought the magic that resuscitated the Economies of Europe and other similar countries.

Perhaps, this is about the time to create the parallel of the Marshall Plan for Africa. We must be strong as a continent to demand full and unwavering support for the Plan by all the superpowers especially the G8 and the G20 groups. Africa must not demand less. We did not create the Coronovirus palavar but we are most likely going to be at the worst receiving end of the economic woes that this pandemic will create globally. We cannot afford a double recession or depression in Africa and everything is pointing to its inevitability as we speak.

Perhaps, one important missing link in Prof Soludo’s delivery on the pandemic is that he did not really offer a cognate, poignant and direct solution other than reopening the system across Africa. Even with about 4 or 5 weeks lockdown, the African economies have depreciated to less than 1% in growth rate. Once the after effects of the pandemic start to surface in real micro and macro economics spheres, the reality will dawn and we would suddenly see a deep cut in the growth rate leading to obviously a negative growth rate in the African continent’s economies. Forget whatever IMF may say, the African Economies will surely see negative growths in the next 3 years.

The most ideal solution is to make the developed world – the G8 and G20 – pay for the “Africa Marshall Plan,” to save 1.6 billion people in the continent from serious economic degradation. The resultant effect of not adopting this Plan will be child’s play to the atrocities caused by the Coronavirus. There will be deep increase in poverty, hunger and more diseases, more terrible than Coronavirus, might even surface.

The world must be compelled to use this opportunity to actually take Africa seriously. We Africans too must bring forth some of our best brains to create this “African Marshall Plan.” The G8 and G20 world powers will never do it for us. They will never give us the magic to create that Plan. We must harness our best brains from within and in the Diaspora to create this Marshall Plan and dump the plan at the table or laps of the World superpowers to fund and finance. If they decline to accept it, AU must and should instigate a collective pull-out of all African countries from the United Nations. We must take those drastic actions and equally declare all foreign loans from those G8 and G20 nations inconsequential and automatic defaults in repayment. We have to have a bargaining power to instigate full support for the African Marshall Plan. It must not be Loans, it must not be Debts, it must be strong bargaining to engage in Economic emancipation plans for Africa. I am not calling for Africa to become beggar nations, we are not asking for grants here but strong economic investment. It is the same Western Europe and the Americas that invested heavily in China that brought it to the level of the second largest economy in the world. I am looking for collective bargaining Economic strategies that will help open up African Economies and save the continent from the calamity of the predicted double recession or even possible depression looming ahead.

Before I conclude, I strongly support the suggestion by Prof Soludo to look inward in Africa for the solution to the Coronavirus. We have herbs in Africa everywhere in our neighborhoods but the big western pharmaceutical companies are at the forefront of efforts to kill or stunt the growth of alternative medicines. We surely can find and promote local herbs treatment for Coronavirus. We can get creative by making that a central focus of the fight against the virus. We must, however, be wary of the tough fight from the giant pharmaceutical companies littered all over Africa. India today is perhaps the world’s largest producers of pharmaceutical products. Recently Indian Government announced the achievement of almost 55% in local components sourcing in the manufacturing of drugs and vaccines by Indian Pharmaceutical manufacturing companies. These are local herbs and derivatives grown and produced in India. We can invest in such researches and I am sure most of our Universities and Colleges have results of some of these researches just gathering dust in their respective laboratories across Africa. We can copy whatever India has done to achieve this milestone.

China that perhaps generated this Coronavirus is reputed to rely on herbs and traditional medications and derivatives to keep its citizens healthy especially most of the huge population living in rural China and sub metro cities. Herbs perhaps constitute more than 40% of medication and treatment of all health related issues in China.

We cannot be ashamed of what we have. We may probably find local African alternatives to the vaccines to be generated by the Western pharmaceutical companies just as Prof Soludo alluded to.

Finally, due to the fact that some of us reside right in the epicenter of this pandemic in the US and Europe where this Virus has been hitting hardest, one will be very reluctant to support Prof Soludo’s call for an immediate cancellation of all lockdown on Africa. I am not sure we should do it in that fashion. We have to be very systematic about it. This virus is really very dangerous and very deadly unlike whatever we may have seen before. Yes, we would be quick to talk about Ebola, but we must remember that Ebola killed a million people in Africa probably. And wanton loss of lives must be avoided at all times. Ebola will be child’s play to this Coronavirus from all indications. Ebola is easily contained if necessary precautions are taken. Coronavirus is not like that. It is killing patients and killing the caregivers at the same time. Ebola never killed caregivers like Conona is doing. We just cannot afford to allow this virus spread in Africa. It will be disaster.

We can have a systematic opening up of the Economies of Africa with careful studies and strategies to contain the spread but an outright opening up of the system across the board will be very dangerous and we may end up paying more for doing that.

The situation we have with the potential economic downturn is not going to be different anyway even if we decide to throw open all the doors and allow people to go back to business as if nothing has happened or as if Coronavirus does not exist anymore. As we speak, it will take a miracle to save African countries from the tragedy that their economies will face once the world is able to successfully defeat the Coronavirus. The damage is already done and the economic crisis inevitable. Why are we going to risk losing so many of our African citizens now by just opening up the system? I am very positive if Prof Soludo is located in New York, New Jersey, Spain, Italy and any of the other hot bed locations of this Coronavirus, he will never advise or call for an immediate and unconditional opening up of the African economies. While I partially support his argument about the sustainability of the African Economies in a continued lockdown, the situation is still very dangerous to take such a step Immediately. A systematic approach will be better advised. This virus is extremely dangerous, period! We cannot just joke with it even if we have to sacrifice collectively to fight it. Again, whether we return back to work in Africa or endure for a little more time to contain and wipe out the possible impact the virus could unleash on the African continent, the damage is already done and we must be focusing on a comprehensive solution at this time instead. This is why I am concluding that we must be looking towards a solution to the health issues on a comprehensive level and a Master Plan to fix the economic damages from the current global financial and economic problems. We need an AFRICAN MARSHALL PLAN as a matter of urgency. It must be home grown and the rest of the world ( G8, G20 and all other world multilateral organizations and their gangs ) must be compelled to fund it. No one wants to talk about reparations for the barbaric African, trans Atlantic, Slave Trade, yet, comprehensive reparations was invoked and created for Europe and America to rebuild after the WW11.

There is no doubt that the world will be plagued by serious recession in the next couple of months. The current situation is generally unprecedented. I have tried to conduct an analytical comparison of similar global economic challenges but none is probably comparable to this. The great global depression was occasioned by sudden instigation of changes created by the industrial revolution and series of changes in the system especially among the major world players at that time. The 1930s global recession was the result of the emergence of new world orders with the dethroning of several economic systems by hardcore thinkers and that was part of what led to WW11 between 1939 and 1945. Of course, another quick global recession followed thereafter.

The most recent global recession was occasioned by the emergence of the unexpected structural changes in global economic dynamism by the advent of and creation of internet and high tech revolution that started in the 1990s. It was definitely inevitable for the global economy to readjust and reboot, kind of, and this is why that recession only generated serious financial mismatch that needed serious adjustment and correction. At that time, the global economy was on top gear, production was stepped up, growth was decimated but not badly damaged. There were no lockdowns and complete shut downs of any economy. In fact, most of the stimulus packages then, were directed towards increasing production and consumption at the same time to stem the effect of the global bullish in the financial system.

With Cononavirus, it is completely a different ball game. All known global economic records have been shattered and broken, stock markets, labor and employment markets, industrial and manufacturing sectors are shutdown globally, service industries and tourism are completely grounded and may take years to resuscitate, growth numbers have been rendered meaningless at huge negatives across the board; Countries, States and Governments are at the brink of declaring bankruptcies and failure, treasuries and vaults at drying, commodities markets have been badly damaged with no clue as to how to revamp them, growing frustration and global poverty index will soon shatter all known records and perhaps Guinness Book of World Records will have to go back to restart with most records being broken on the negative side.

Some Economists are already working on hypothesis to qualify and quantitatively address the current global economic problem. It is nothing like what most of them have seen, read or even predicted even as latest as January 2020.

Some Analysts are working to include a new hypothesis in the dynamics of economic problems called ECONOMIC TSUNAMI. We have economic recession, we have economic depression and Economic failure ( failed Economy) . Now we might see a new word added to the encyclopedia, Global Economic TSUNAMI, arising from the devastating consequences of the Coronavirus. Africa must be prepare for this and we must be fully armed and ready. The G8 and G20 are already gearing up to raise trillions of dollars to help each other. Africa must negotiate to be part and parcel of that deal. We cannot be left with the crumps.!!!

We can also note that I have personally tracked the meetings of G8 for the past 15 years. Within that time, they have equivocally and collectively called for and inserted development funding for the Less Developed Countries LDC mostly in Africa in their plans. They have over the past 15 years promised to invest over $8 trillion dollars in LDC. But it is not certain if up to $1 trillion has been invested to date out of those pledges. This is a fact. This is why I opted for and advised that Africans must demand participation from the G8 and G20 as a MUST …… this is not negotiable. They must be reminded that it is time to honor those promises and pledges to support Africa’s development efforts. Let us see them release those promised $8 trillion dollars in the next 10 years to Africa.

Dr. Bello is Principal Partner/CEO- Afrique Capital and Equity Funds Ltd, New York, USA,  President, Nigerians in Diaspora, New Jersey chapter and Chairman, Steering Committee of the proposed Nigeria Federal Credit Union.