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Happy New Year from Africa!

Coen Van Wyk

Posted on January 9, 2021 15:57

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And so the disastrous 2020 is behind us. Africa has seen growing economic problems, mass deaths, failure of foreign investment due to the pandemic, and there is a degree of trepidation as the new year opens. But there are also positive developments.

2020 has had negative impacts on a continent used to bad news. And while economies creaked under the strain of failing foreign investment and falling prices of primary exports, Africa has also triumphed over the feared Ebola epidemic.

The new year, and decade, brings with it some concerns. The growing Chinese influence on African economies has yet to be evaluated, as hidden clauses to loans come into play. The Zambian Government defaulted on loans while Chinese loans, it seems, enjoy preferential status. How that will play out when there are signs that the Chinese economy is suffering is also not clear.

But the new year brings new hope. On January 1, 2021, as Britain embraces Brexit, the African Continental Free Trade Area came into force. While this agreement has been years in the making, 54 of the 55 members of the African Union have signed up and 33 have ratified the agreement. This will in principle enable the formation of a single market with over 1.3 billion people. Historically, intra-African trade has been low, with only 12% of the continent’s imports coming from the continent, and a minimum of benificiation taking place. In comparison 50% of imports in Asia come from within the region, and in Europe the figure is 70%.

The Secretary-General of the AfCFTA Secretariat warned that this is a multi-decade process and pointed out the example of the long gestation of the European Union.

The benefits would be real, even if slow in materializing. At present it costs five times more to move a container in Nigeria than it costs in Brazil, and ten times as much as in the Netherlands.

And, on a smaller scale, South Africa’s draconian lockdown measures has created havoc with the economy, but has also enabled other dynamics to develop. At present it is still not certain when universities will re-open their academic year that is supposed to start in February. Some speculate that March is a target date, while some insist that April is the earliest possible date. In the meantime, tertiary institutions are turning to online teaching, and find that modules of courses, previously not accessible to many, are now receiving registrations in unexpected areas. Large squatter camps, considered an educational wasteland, see growing numbers of students in early childhood development, for instance, and the same applies to remote tribal areas. What is happening is that an inventive management seized the crisis as an opportunity, and negotiated with government schools and fast food outlets to make their WiFi signals available to students.

McDonalds a university campus? Only in Africa.

Coen Van Wyk

Posted on January 9, 2021 15:57

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Source: Al Jazeera

The African Continental Free Trade Area brings together the continent's multitrillion-dollar economy into one bloc.

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