Global economic crisis: what recipes for African countries?

Global economic crisis: what recipes for African countries?

The world, and African countries in particular, have to face despite themselves, one after the other, two major crises: a health crisis – which is not over – and the conflict in Ukraine. The Covid crisis has revealed the need to strengthen and rethink the health and industrial sovereignty of States. The Ukrainian crisis adds to this food and energy sovereignty and leads to a more global rethinking of the interdependence of States and the political, strategic and commercial links that result from it. It is therefore a question for all States and African States in particular to organize themselves to be sovereign in their decisions and to be able to absorb these shocks.

I specify that sovereignty is not synonymous with autarky or withdrawal, nor necessarily that it is necessary to produce everything, all alone. It is in fact a multitude of levers which consist in being able to freely exercise one’s political and commercial power. Wheat, for example, is overwhelmingly imported from Russia and Ukraine, but the difficulty is not so much that African countries, particularly North Africa, are importers, but that they are almost exclusively of these two countries.

Similarly, the Covid crisis has revealed the vulnerability of Americans and Europeans, who are too dependent on their Chinese imports of semiconductors. The problem is therefore not that there is world trade, on the contrary, but that there is an almost exclusive import chain. It is above all a question of diversification of supply chains and fall production capacity in key sectors according to the comparative advantages of each country. African countries must therefore transform the immense wealth of their raw materials into finished products and industrial sectors, also by forging strategic partnerships of which Europe is destined to be a privileged partner because of the history and the geographical from both continents.

This transformation is based on the development of human capital, training and execution skills. It is in this logic, for example, that ESSEC’s new executive program “Generation Africa” fits.

Morocco is one of the pioneering African countries in this field. The creation and expansion of a complex like Tanger Med, the development of automotive production chains like Renault and Peugeot, the existence of an industrial production chain in the aeronautical subcontracting sector on the side of Boeing and Airbus through Stelia, constitute solid industrial pillars. The sectors are getting stronger, the economy is diversifying and thus becoming more resilient.

The health crisis has shown the need to strengthen the entire health sector. The acceleration of the development of the Institut Pasteur in Senegal or centers of excellence in the field in South Africa (Omicron was detected by a South African laboratory) are another example.

In conclusion, the economic, political, climatic and social challenges are enormous. But at the same time, and sometimes paradoxically, they constitute an opportunity for several economies on the continent to accelerate and develop their industrialization and their place in the global value chain. This development necessarily involves the private sector, which must take its risk, just like the public sector, which must offer a solid, sustainable and transparent investment framework. The time is therefore neither for optimism nor for pessimism, but for action.

Benoit Chervalier
Teaches at Sciences-Po Paris and at ESSEC (financing of economies and businesses in Africa). He is an investment banker, founder and Chairman of one2five advisory, advises companies and sovereign entities on their operations in Africa.

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