Africa’s COVID-19 response should focus on human capital: Expert

Africa should focus on human capital and the informal sector as an appropriate response to the effects of the coronavirus pandemic, an expert said.

''I think the first big lesson is we urgently need to prioritize human capital," Richard Munang, a development expert, told Anadolu Agency. 

With more 27,000 cases, effects of the coronavirus have plunged sub-Saharan Africa into its first recession in 25 years, according to the World Bank.

More than 1,200 deaths have so far been reported in 52 of Africa's 54 countries, according to data compiled by the Africa Centers for Disease Prevention and Control (Africa CDC) on Friday.

All indications suggest that the COVID-19 will have a heavy human toll and cause an acute economic crisis in Africa, the World Bank said in a report.

African countries need resources to combat this pandemic, and to safeguard lives and livelihoods.

According to Munang, a skilled person capable of turning challenges into enterprise opportunities is four times the value of produced capital and 15 times the value of natural capital.

''What we are seeing with the COVID-19 is that recovery will be primarily powered by productivity of people,'' he said, adding African countries should focus on its young population.

Investment in Youth

Munang said that unlike the West, Africa has the advantage of youth bulge. Therefore, there is a need to invest in human capital and produce a skilled population.

The median age in Africa is 19 -- and there are an estimated 80 million young people in vulnerable employment and a further 110 million who do not contribute to the economy, according to McKinsey & Company, an American management consulting firm.

School closures will have a severe impact on young Africans, with long-term consequences, it said in a report -- titled Tackling COVID-19 in Africa.

According to Munang, African countries must urgently invest in skills retooling of these youth.

"These youth need to be supported to refine, improve and adapt their skills – regardless of disciplinary backgrounds – for application in establishing enterprises that provide productivity solutions for the informal sector – such as the solar dryers," he said.

Stimulus packages should go to create incentives in the form of tax breaks, reliefs, holidays and rebates to enterprising youth to encourage them and keep them afloat during these turbulent times, according to Munang.

Cheap solar dryers

Although African governments have introduced numerous measures to stem the spread of the virus, including closing schools, imposing travel restrictions, and banning large gatherings, closing markets, there is still no letup in reporting of fresh cases.

Most young Africans and entrepreneurs have been effected by the measure taken as they mostly depend on daily earnings.

"Here, climate action solutions of solar dryers – made from locally available material not only provide income opportunities for youthful entrepreneurs who develop these dryers, but have proven formidable in preserving food and increasing shelf life," Munang said. 

He said Africa must prioritize the informal sector players who trade in perishables. "These dryers made from locally available material can be up to 200% cheaper."

In Sub-Saharan Africa, the informal sector contributes 66% of total employment, which is classified as a set of economic activities, enterprises, and jobs, that are unregulated or not protected by the state.

"Decentralized to food traders, they have proven effective to dehydrate various food items, increase shelf life and ensure food traders earn up to 30 times more trading in dried foods during the off season when demand peaks," Munang said.

"To make these solutions affordable, part of the stimulus packages being announced can be purposed to target these informal sector traders," he said.

Effects likely to be severe in urban areas

"As engines and drivers of economic growth, cities face considerable risks in light of COVID-19 with implications for the continent’s resilience to the pandemic," Thokozile Ruzvidzo, the director of the Gender, Poverty and Social Policy Division of the United Nations Economic Commission for Africa, said in a report.

"The effects are likely to be severe in urban areas. The urban economy [manufacturing and services] currently account for 64% of GDP in Africa," said Ruzvidzo.

Firms and businesses in African cities are highly vulnerable to COVID-19 related effects, especially small- and medium-sized enterprises which account for 80% of employment in Africa.

"Additionally, urban consumption and expenditure [on food, manufactured goods, utilities, transport, energy, and services] are likely to experience a sharp fall in light of COVID-related lockdowns and reduced restrictions," Ruzvidzo said.