Tuesday, January 19,
2021 / 3:59 PM /Nifemi Taiyese for WebTV /Header Image Credit: WebTV
The Africa Investment Roundtable (AIR) held its maiden edition in which it addressed the issue of the application of technology in driving growth in Africa. The session focused on a few issues ranging from lessons of the COVID-19 and sundry challenges in 2020 to the continental economic outlook in 2021 and how African policymakers can turn crisis into opportunities.
The digital meeting featured the Co-Founders of the AIR Initiative, Ms. Arunma Oteh, OON, a Scholar at the University of Oxford, United Kingdom, and Mrs. Toyin Sanni, the group chief executive officer (GCEO), Emerging Africa Capital Group.
Ms. Oteh said that the Africa Investment Roundtable was conceived as a thought leadership series to bring expert-opinion to bear on the ways of taking advantage of investment opportunities in Africa.
The Oxford academic said that the Roundtable would assist participants with insights on how to identify, understand, and manage the risks of doing business in Africa.
The former DG of SEC Nigeria, described the COVID-19 crisis as unprecedented and multi-faceted and represented a great economic lockdown with the semblance of a war between the man and a virus.
Speaking on global monetary policy, Oteh noted that the central banks of many advanced nations lowered their interest rates to zero, with a few trending slightly below zero as they implemented elaborate stimulus programs including extending asset purchases to high-yield securities. The cost of finance to individuals, corporations, and the public sector were lowered to historic levels to stimulate economic activity in the face of an economic value-destroying health pandemic.
Oteh gave the example of a bank in Denmark that announced it was offering individuals 20-year mortgages at zero interest rates as a response to the need to give the Danish economy a boost.
The Oxford lecturer pointed out that African economies were constrained in their monetary policy actions by severe inflationary pressures that made quantitative easing a difficult proposition without discouraging savings and subsequently, investments. Oteh, however, applauded the extent of innovation that has emerged around the world, and equally on the African continent.
"The coverage of the internet is relatively low on the African continent and is the lowest in the world. Teachers in many communities do not have internet access but they have been able to teach through television and radio" she said.
Oteh also mentioned the fact that the expansion of telemedicine was an area that could not be overemphasized noting that it would cut the cost of medical tourism on the African continent significantly.
The Oxford academic said that the coronavirus-induced global economic crisis has put a spotlight on the value of leadership revealing the consequences of poor leadership alongside the benefit of good leadership. The crisis of the pandemic, according to Oteh, has allowed people to understand some of the attributes that are associated with being feminine. Female leadership qualities include; empathy, teamwork, and courage, among others.
She pointed out that global economic recoveries were fragile and uncertain. The 2021 World Bank Global Economic Prospect Report noted that global GDP shrank by -4.3% in 2020 but would be expected to rise by +4% in 2021 and by +3.8% in 2022.
Oteh urged policymakers to be watchful of signs of financial stress and other issues that could compromise financial stability. "The most challenging issues would be restoring confidence, consumption, trade, investment across the world as those are the things that fuel recovery," she said.
In her contribution, Sanni described the meeting as an opportunity to examine the Africa Investment landscape. According to the investment analyst, COVID-19 was a health and economic crisis rolled in one.
She said the real challenge for Africa was the economic implications of the pandemic across the region, a contraction of region-wide GDP by -3.7% in 2020 was brutal, she observed. Some of the largest economies in Africa were badly hit because they were resource-dependent, she cited countries such as South Africa, Nigeria, and Angola.
Conversely, she noted that the less resource-dependent economies were tourism-dependent, like Mauritius, Cape Verde, and Seychelles who have stumbled as severely.
Sanni emphasized the importance of collaboration between countries because of the interconnectedness of the globe. Going forward, she argued that the world must learn to act collectively in providing solutions to problems.
She added that there was a need to eradicate the habit of working in silos which has been the bane of some countries. According to the GCEO of Emerging Africa Capital the pandemic has disrupted supply chains, access to markets, business and leisure travel, education, and medical tourism.
Sanni noted that the path to recovery was still unclear, as there were uncertainties around access and deployment of the vaccines relative to global populations.
Considering the urgent nature of the health and economic crisis, Sanni tasked the private and public sectors to play their part in ensuring the containment of the economic impact of COVID-19.
"Pre-COVID-19 seven out of the ten fastest-growing economies in the world were in Africa, but now the tables seem to have turned, which is a cause for concern at AIR," she said.
Both Oteh and Sanni agreed that huge mobility restrictions have become a perfect opportunity for fintech, digital infrastructure, e-commerce, education, telemedicine, IT, and telecomms industry to become winners of the crisis in the foreseeable future.
Chinwe Egwim ,Senior Economist, FBN Quest, who moderated the session of the AIR observed that many of the nations that have successfully managed the pandemic like Taiwan, Iceland, Germany, New Zealand, and Finland were led by women. Egwim quoting the IMF said it estimates that tourism receipts fell by 65% during H1, 2020.
The promoters of AIR believed that if Africa was to wriggle out of its present predicament, its leaders must be clever, clear-headed, and strategic in resolving the issues of supply chain disruptions and technology development, creativity, and innovation as tools for leapfrogging over the challenges.