Just a few weeks ago, the World Health Organization (WHO) warned that the third wave of COVID-19 cases presents a major threat to Africa. This warning came as the highly transmissible Delta variant continues to spread to more countries on the continent.
From talking to our members in Africa, I know the devastating impact that a third wave is likely to have on their communities and on their businesses. Death rates are rising and WHO regional director for Africa, Matshidiso Moeti, has sadly predicted that “the worst is yet to come”.
A major obstacle to Africa’s battle against the pandemic is the fact that vaccination rates on the continent remain very low, but accelerating. In Nigeria, which has a population of over 211 million, only 1.9 vaccine doses have been administered per 100 people.
Our members tell me that, in certain countries, there is a lot of misinformation about vaccines being spread on social media. People are suggesting that those who are vaccinated are more likely to suffer severe symptoms when the virus strikes – when, of course, the reverse is true. But while the vaccine rollout, in general, is stuttering, there are some notable national success stories – such as Botswana and Ghana – where countries have embarked on intensive vaccination drives. In South Africa, the vaccination acceleration rate from July 2021 is at 200k per day which is a huge increase for the first time since the vaccine programme started.
Impact of COVID
Until the speed of vaccine, rollouts accelerates – and public resistance to them subsides – Africa will remain very vulnerable to the threat of COVID, despite its youthful population. In the meantime, businesses will have to manage the health threat presented by the virus, as well as other challenges, if they are to stay afloat.
Lockdowns are a major challenge, with non-essential businesses suffering a severe hit to their revenues when they are forced to close. Business closures are, in turn, damaging regional economies and leading to widespread human suffering.
In Uganda, which is currently undergoing its second lockdown, businesses are laying off staff. At the same time, the closure of businesses is leading to a shortage of products, driving up prices. Meanwhile, people who lack good incomes or health insurance cannot afford the cost of intensive care units if they happen to fall ill with COVID. In Nigeria, 40% of the population – 83 million people – already live below the poverty line, but the World Bank has warned that a further 25% – 53 million people – could fall into poverty as a result of the pandemic.
Supply chains are another cause for concern. COVID has seriously disrupted the international supply chains that African countries depend on. A shortage of containers is preventing South African companies from importing vital components from countries such as the USA, while freight companies are struggling to deliver. Nigeria, which imports heavily from other countries, is being affected by reduced capacity in factories elsewhere in the world.
COVID-related disruption – and other disruptions such as the recent riots in South Africa – is also preventing goods from moving freely across borders within Africa, and even within national boundaries. As a result of ongoing shortages, food inflation is a growing problem in countries such as Nigeria, South Africa, and Zambia. Inflation more broadly is an issue as well.
Finance professionals step up
Countries across Africa face some significant challenges today – both as a result of COVID-19 and because of specific factors in their national environments. South Africa has a problem with electricity blackouts, for example, while Nigeria suffers from ongoing clashes over land between herdsmen and farmers.
Nevertheless, I’ve been very encouraged to hear about the important role played by finance professionals – specifically members of the Association of International Certified Professional Accountants – as they help their organisations, and their countries, manage these challenges. I know they’ve been working long hours to solve supply chain issues, undertake scenario planning and perform additional risk management activities on top of their day jobs.
While this is an incredibly difficult period for African nations and businesses, I’m proud that our members are there, supporting them to pull through the crisis. I believe this support will ensure that Africa is in the best possible position to take advantage of the bright times when they finally return.
Regional Vice President, Africa