2020 in Africa and What’s at Stake in 2021
This is part of BRINK’s leadership series, in which we invited a few CEOs and leaders to reflect on the year that just passed and what lies ahead.
Two things were material for our business in 2020: Colleagues and clients.
At our annual company review in February 2020, we elected to halt discretionary spending, curtail travel and asked our staff to work from home. We asked our board for permission to delay the completion of our annual budget because COVID-19 had introduced too much uncertainty. We spoke with our banking partners, called our clients and prepared for COVID-contagion to hit our shores.
Our time frames reduced dramatically. By mid-March our clients were requiring regular insights into the type of restrictions that governments were considering to contain the spread of COVID-19 and the impact of these developments on their operations and supply chains — and they wanted these urgently. We were supplying daily — and in some cases more frequent — insights on anticipated health regulations, economic stimulus and debt relief measures as well as mobility restrictions. With travel restricted, our proximity to key stakeholders was crucial.
What we observed in 2020 in Africa was more collaboration between civil society organizations, industry and governments than at any time previously.
We played our part in supporting a coalition of Kenyan organizations that rapidly deployed soap, ethanol hand sanitizer, surface disinfectant and masks to all vulnerable Kenyans. We formed a consortium that procured ventilators and gifted these to the Kenyan government. In Nigeria, we volunteered our support to the GiveFood.ng initiative, providing tens of thousands of meals to those in need by leveraging technology and existing food supply chains. We worked with clients in the telecoms and mobile payments sector to guide governments on where and how to distribute financial assistance to rural communities. In Botswana, we made a donation to the COVID-relief fund.
Throughout 2020, my colleagues have shown immense stamina, great empathy and unwavering professionalism.
Looking ahead now to 2021, there’s lots at stake for Africa.
Sustained vaccine momentum will be critical for economic recovery, and so, too, will levels of debt sustainability. Well-orchestrated lobbying of the G-20 and IMF by a committee of well-regarded financiers appointed by the AU’s chairperson, Cyril Rampahosa, staved off a financial crisis in 2020.
But more innovative financial restructuring will be required if we are to avoid the levels of debt unsustainability that forced the Paris Club of creditors to intervene in 2003. China has a big role to play here, and all eyes will be on preparations for the Forum on China-Africa Cooperation (FOCAC) in Dakar next year, where China will seek to position itself as the preferred Africa partner.
Regulation of digital services and technology firms will dominate government agendas in 2021, driven by two fundamental requirements. First, to ensure that citizens have access to a wide choice of safe products and services online, and secondly to fund substantial budget deficits.
It’s no coincidence that the proportion of big tech firms we advise has grown in 2020. The challenge in the year ahead will be to write or rewrite the rules governing digital services and technology, without hurting free speech and innovation. Designing fair and efficient regulation will require diligent consultation and the involvement of multiple stakeholders.
Climate change will loom large in 2021, with the next Conference of Parties scheduled for November in Glasgow and the new U.S. administration immediately returning the United States to the global 2015 Paris agreement.
All nations have committed to nationally determined contributions on adaptation and mitigation, but among the big emitters in Africa, only Egypt managed to reduce its emissions in 2019.
Climate change threatens African societies greatest, but it also affords immense opportunities for smart climate financing that rewards integrated land use and the preservation of biodiversity. This is a growing area of focus for some of the world’s largest financiers and an opportunity for African nations. We can expect the natural capital accounting movement to accelerate in 2021 — and with it, the emergence of climate and nature financing.
Ibrahim’s annual index of governance recorded its first decline this year, in part because public scrutiny of governance has been increasing in African nations. Keep an eye on the progress of the #FixPolitics initiative in Nigeria in 2021, and remember that demographics matter.
The patriarchy that has occupied the polity in most African societies since independence is under pressure from an increasingly vocal youth, whose numbers dwarf older generations. Quality of leadership remains a challenge at the apex of African governance. The continent is the youngest in the world, yet we just don’t have enough young people in political office.
And, finally, health. Inevitably COVID-19 has focused our attention on health care. There’s a wealth of African entrepreneurs ready to disrupt this sector. They only need the right enabling policies and regulatory environment to do so. Financing for health insurance, including micro-insurance and mobile payments, will be critical for scaling enterprise solutions to benefit the most deprived and the most vulnerable.
We can expect the emergence of more tech-enabled African health care firms, especially if regional coordination and regulatory harmonization quickens. The operationalization of the African Continental Free Trade Area next month, augurs well for this.