By Hassan Kallon Esq. and Dr. Ibrahim Seibure
It is with great pleasure that I take on this new role as Consultant Editor of the A-Z African Magazine. At the outset, I wish to express my deepest thanks and gratitude to Dr. Ibrahim Seibure, the Proprietor and Publisher of this magazine. While still very much in the formative stages of its development, this publication has already made remarkable strides in illuminating the richness and diversity of its material as evidenced by the variety of stories it is telling from across and beyond the continent.
It is my fervent hope that in the coming months and years, this publication serves its avowed goal of shining a light on stories from and about the continent and its rich tapestry of cultures and peoples.
Inevitably, I wish to start my maiden take on issues around the continent by casting our minds to the last 9 months. From its very beginning, the year, 2024, was billed as one of promise and renewed potentials. This was coming against the backdrop of the ravages of COVID 19, and its debilitating effects on economies around the continent. Not only did the pandemic claim hundreds of thousands of lives, but the broader effects of the crisis were even more acute.
Growth plummeted, economies stagnated and the prospects for recovery have assumed even darker dimensions. Add to that the effects of multiple exogenous shocks like the Russia-Ukraine conflict, which occasioned high food and energy prices, and increasingly disastrous extreme weather events and climate change, one is left in no wonder as to the magnitude of the challenge facing the continent.
Set against this backdrop, 2024 started off with a lot of hope and optimism for many countries. Not only were up for 20 African states and nations slated for general and legislative elections (and with them the never-ending hope that a new set of leaders would herald improvements in living standards), but the economic indicators also appeared mildly encouraging. From Senegal in March to Ghana in December (at the end of the year), 2024 had been billed “the year of elections” for African nations. On another positive note, the United Nations World Economic Situation and Prospects Study (WESP) 2024 had predicted at the start of the year that the continent’s economic growth was expected to quicken slightly, with average GDP possibly inching up to 3.5 per cent.
The Africa Development Bank even went further in predicting that economic growth would consolidate higher at 4.3 percent. Though concerns remained around debt sustainability, fiscal pressures and the effects of global crises and climate challenge, there was renewed hope that fresh elections, possibly resulting in new leaderships in some countries, would mark a rebirth and reawakening of some of the continent’s big hitters.
In the circumstances, reality has left a lot to be desired. In the past few months, thousands of young people have taken to the streets in different countries to protest over the cost-of-living crisis, bad governance and an acute lack of opportunities. From Nigeria to Kenya and Uganda, these expressions of dissent have been largely led by dissatisfied and angry youth, armed in most cases with nothing more than their passion, and the advantages afforded by advancements in technology and social media.
While the underlying causes and motivations might differ in significant details from each other, a common thread of disaffection and unrest seems to run through all of them. In the case of Nigeria which is traditionally considered one of Africa’s biggest and strongest economies, inflation reached a 28-year high of 34 percent in May this year. What is even worse is that inflation (mainly food inflation) is predicted to remain high in the second half of the year.
In Kenya, the picture was not markedly different. Citizens, mainly young people, took to the streets over what they considered “unfair and unreasonable” tax hikes on essential commodities like oil, bread and sanitary pads in a new Finance Bill. Clearly, countries and their ministers responsible for regulating economies have their work cut out for them.
Predictably, responses to this dire situation have been varied as their results and effects are still being felt in different countries. In Nigeria, not only did President Tinubu approve a 130 percent increase in the national minimum wage, but he also placed a temporal moratorium on tariffs and tax duties on some essential imports. For Ghana, there have been moves to fast-track deals with major creditors including the International Monetary Fund (IMF).
Already, external debts which stood at a mammoth 1.12 trillion dollars, had risen to 1.52 trillion dollars by the end of 2023. While the easy option for most countries would be to plunge themselves further into debt, the AfDB has warned that the growing burden of debt repayments has the potential to further derail achievement of the Sustainable Development Goals.
Even amid various debt relief measures, including the Debt Service Suspension Initiative from which many African States have benefitted, African countries are carrying higher levels of debt than was the case before COVID struck in 2019. AfDB estimates that up to 25 African countries are either already in excess debt or stand at a great risk of doing so.
The need for a multi-layered and integrated approach to a crisis of this nature cannot be overstated. No wonder, Akinwumi Adesina, President of the AfDB, at the Doha Forum in December 2023 said, “A multilateral approach demands that we understand the nature of the debt itself, what is changing and how we can respond to it.”
To confront the present and emerging challenges, governments across the continent need to unlock new financing and revenue generation streams to serve their growing populations. While mineral-resource rich countries have traditionally relied on the largesse bequeathed them by nature to enhance economic productivity, the above scenario necessitates the urgent need to diversify economies, harness the power of technology and create jobs for the growing youth population on the continent.
In addition to the above, the continent needs to confront the climate change crisis and energy transition by employing innovative approaches to mitigation and financing and harnessing renewable energy solutions. There is no gainsaying the fact that growth on the continent would remain a pipe dream until lasting and proficient public-private partnerships are unlocked to accelerate economic growth and productivity.
Moreover, it is imperative that African nations adopt a continent-wide approach to combating Illicit Financial Flows and their horrendous implications for growth (or the lack of it). From trade mispricing, tax avoidance/evasion, corruption and capital/money laundering, the causes of this phenomenon are varied and complex. In fact, the United Nations Conference on Trade and Investment has estimated that Africa loses 88.6 billion dollars annually owing to IFFs.
To tackle this complex challenge, Africa needs to build collaborations and partnerships both within and without the continent to stymie the effects of this scourge. It goes without saying that the combined proceeds of the above measures must be subject to the greatest care and discipline. Fiscal discipline, as Ghanaian President, Nana Akuffo Addo says, “is the key to economic stability.” Public investment programs must be thoroughly assessed based on parameters including costs, value for money and their long-term utility. Only then will economies on the continent finally start realiSing their predicted outlook and potential.