Far from being spared from the COVD-19 pandemic which continues to wreak havoc on economies around the world, African countries have suffered significant damage to their economies due to lockdowns as part of a containment strategy. Through this interview with the editorial staff of Financial Afrik, Matthew Winkler, Editor-in-Chief Emeritus and co-founder of Bloomberg News, outlines the means at Africa’s disposal to reorganize its economy and forecast its prospects in relation to the global economy
With the smallest number of detected coronavirus cases in the world, how is Africa economically affected by the Covid-19 pandemic?
As a region of 54 countries, Africa saw the coronavirus retreat in mid-November in some of the continent’s largest countries – South Africa, Nigeria and Ethiopia – to their lowest levels since April or May unlike the ‘North and South America and Europe where it has stepped up to register cases and deaths at the end of the year. Covid-19 may have enhanced the region’s competitive advantage through the transformation of Africa, which has spanned ten years, from exporters of natural resources to wireless and remote trading centers. Africa has 7 of the 10 fastest growing economies in the world in 2020.
How do you see the economic situation of the continent after the pandemic?
At least five African economies are expected to remain in the top 10 in the world until 2022, according to economists’ forecasts compiled by Bloomberg over the past three months.
How can African countries reorganize their post-Covid-19 economies?
The economies of Ethiopia, Uganda, Côte d’Ivoire, Egypt, Ghana, Rwanda and Kenya have withstood the economic impact of the pandemic so well that they were among the 10 fastest growing in the world in 2020. This is in part a consequence of the fact that communications companies have become a presence, accounting for 29% of the continent’s total market capitalization in 2020 compared to 13% a decade earlier , according to data compiled by Bloomberg. The transition to a 21st century technology-driven company in a region where people are younger than anywhere else is reflected in the changing landscape of the 1,300 publicly traded companies that make up Africa.
4. What are the prospects for the African economy compared to the rest of the world for the years to come?
The shares of the 200 largest public companies in sub-Saharan Africa have appreciated 13% this year, with the comparable emerging markets index rising 12% and the riskier frontier market benchmark losing 3%, according to data compiled by Bloomberg. Corporate Africa has grown 78% over the past two years, with the emerging market growing 33% and the border market by 12%. The same 200 African companies appreciated 324% over five years as the emerging market recovered by 67% and the border market grew by 27%. The stars of the technology include Cartrack Holdings Limited, the Johannesburg-based software maker that collects vehicle data transmitted while driving, providing users with information on safety and performance; its share price has risen 76% so far in 2020. CBZ Holdings Limited, the Harare, Zimbabwe-based bank with a booming digital business, has been 11 times more valuable this year than the year last. MTN Nigeria Communications PLC, the telecommunications service based in Lagos, Nigeria, notably benefiting from Covid-19 lockdowns, increased by 58% in 2020; the rest of world telecommunications was down 1%.
What is the role of the media in the face of the great upheavals shaking the world?
Nigeria had the best performing stocks in the world this year. Among the world’s 93 major stock markets, the Nigerian Stock Exchange’s all-stock index of 153 companies was No. 1 with a total return of 27%, according to data compiled by Bloomberg. Communications, which account for 28% of the index this year, down from less than 1% in 2015, rose 68%, topping No. 2 in healthcare. The media figure more and more in this growth story.
