This virus is robber of health and wealth

Wednesday May 13 2020
By BITANGE NDEMO

We watched as China confronted the coronavirus and as it threw everything it had at the virus.

We watched as the virus escaped to Korea, then to Europe and now in the US, and as the number of infections and deaths skyrocketed in Europe.

Then we started to see African countries confirm cases. If the trend is anything to go by, then in the next two to three weeks will be our turn to suffer.

MINIMAL THREAT

Like in the US, we thought the threat was minimal and this affected our decisiveness on response. Now, the number of infections is increasing.

It is as though this Covid-19 sends warning shots and then after 19 days, it comes with vengeance.

This, in my view, is a window that we must exploit by planning for: our homeless, food supply chains, our medical staffs’ protective gear, new sites for expanding hospital beds, medicines, emergency vehicles, people who rely on daily income.

Above all, we must candidly address our cultural practices on death and burial in light of this pandemic.

Cabinet Secretary Mutahi Kagwe said that Kenya has entered what is known as community infection stage, perhaps the worst stage along the continuum of infections considering that the virus can rapidly spread across the country if we fail in social distancing.

Lessons from Italy and Spain show that the only way of stopping the virus from spreading is through strict adherence to social distancing. Many countries have had to lockdown their countries as a strategy to distance themselves from mingling.

The chairman of the Council of Governors says that a total lockdown will bring misery to citizens. Others say the Governors are using the crisis as a bargaining chip to get more resources.

Either way, we are losing the valuable time to mitigate against the crisis. The more time we take to take action, the more we endanger the lives of people.

SOCIAL DISTANCING
Our context is more complicated than that of developed countries. We have more people crammed up in shanties. A quick decision to give incentives for those who can move to rural areas to do so is urgent. The more people we move from slums areas to rural areas, the better social distancing we create.

We also move the homeless to less densely populated areas, protect food supply chain companies from harassment by the police, establish a local industry to produce some hospital supplies and develop a public private partnership on emergency vehicles.

In as much as we are in a health crisis, some people must focus on the economy to fight off a possibility of economic collapse and further suffering.

Last week, McKinsey & Company published a report, Tackling Covid-19 in Africa: An unfolding health and economic crisis that demands bold action, highlighting their initial analysis of the pandemic’s economic impact.

Their findings show that Africa’s GDP growth in 2020 could reduce by 3–8 percentage points. The report says that in the absence of a major fiscal stimulus, the pandemic and the oil-price shock are likely to tip Africa into an economic contraction in 2020.

The report anticipates four likely scenarios for Africa. These include a scenario where the pandemic: is controlled in the near term, intensifies throughout the world, Asia, Europe and the US takes long to contain the epidemic and a significant outbreak in Africa with repercussion on the economy and lastly continued recovery in Asia, Europe and the US with significant outbreak in Africa.

GRIM PICTURE
In three of the scenarios with the exception of containment of the virus in the near term, the economies of Africa will record negative growth. Various organisations trying to model the infection trajectory paint a grim picture, with some opining that dealing with Covid-19 may take as long as 18 months.

On Kenya, the report says:

In two out of four scenarios, Kenya is facing a likely economic contraction. Under the contained outbreak scenario, GDP growth could decline from 5.2 per cent (after accounting for the 2020 locust invasion) to 1.9 percent—representing a reduction in GDP of $3 billion (Sh300 billion).

The biggest impacts in terms of loss to GDP are reductions in household and business spending (about 50 per cent), disruption to supply chain for key inputs in machinery and chemicals (about 30 per cent) and tourism (about 20 per cent). In scenarios in which the outbreak is not contained, Kenya’s GDP growth rate could fall to -5 per cent, representing a loss to GDP of $10 billion (Sh1 trillion). As in Nigeria, disruption of consumer spend would be the biggest driver of this loss.

On the continental level, the picture isn’t rosy either. Most African countries, including Kenya, are dependent on imports from, and exports to, China. Although China is back to business, the supply chains are already constrained.

To add salt to injury, oil prices have collapsed, with negative consequences on Africa’s oil rich countries.

OIL PRODUCERS

Further, African oil producers largely export to China meaning that any disruption to Chinese trade will devastate countries like Nigeria, Angola, South Sudan and Eritrea.

In spite of the locust invasion and now Covid-19, Kenya must sustain its food production and horticultural exports to Europe.

Food production is the most important industry today that can provide jobs as well as income in a very difficult period.

With a projected economic downturn, a significant number of people losing jobs and others needing healthcare, it is surely our turn to suffer.

Within the small window of opportunity that we have, we must fight the pandemic by all means but also find means of tapering down our politics and dealing with our anticipated socio-economic crisis by taking bold actions.

The writer is a professor of entrepreneurship at University of Nairobi’s School of business.