The COVID-19 pandemic has crippled African economies but also offers an opportunity to reinvent economic systems on the continent and make small businesses more resilient, says VP and Senior Director for Economic Growth at Creative Associates International’s.
“We are seeing digital solutions and transformation and awareness among political and business leaders that we can do things now that maybe we didn’t even imagine before,” Creative’s Jim Winkler says. “The pandemic has woken us up.”
Speaking at the Corporate Council on Africa (CCA)’s Leaders Forum, Winkler explains that traditional global supply chains were highly efficient, but also vulnerable to a shock-like COVID-19, leaving producers in Africa with no way to sell their products amid the pandemic. Winkler says an “unexpected silver lining” of the crisis is an opportunity to rethink those supply chains to make Africa more resilient in the face of future shocks.
For example, investing in processing and manufacturing that adds value to products, Winkler says, “will create value and jobs and more economic dynamism on the continent.”
A Virtual Forum
The Corporate Council on Africa’s inaugural Leaders Forum, held virtually June 23-26, brought together heads of state, senior officials and private sector executives to discuss the role of U.S-African business relations in supporting the long-term economic recovery from COVID-19.
Winkler spoke on a panel alongside Betty C. Maina, Cabinet Secretary for Kenya’s Ministry of Industrialisation, Trade and Enterprise Development, as well as Gregory Rockson, Co-Founder and CEO of Ghana-based mPharma, and Farid Fezoua, President and CEO of GE Africa.
Winkler’s fellow panellists highlighted the need for Africa to grow its health sector so that countries can be more self-sufficient in responding to a crisis like COVID-19.
“The key lesson for me in this is that we cannot continue to react only in moments of crisis,” says Rockson of mPharma. “What we need to do is take a step back as a continent to really ask ourselves how we begin to build that critical infrastructure that is needed to prevent the next pandemic.”
The Trade Hub
For the health sectors and other key industries in Africa, Winkler says, strengthening the private sector and supporting greater collaboration among African countries and between Africa and the U.S. are vital.
“That resiliency I think is now within our vision, and now it’s time to execute on it with the investment and collaboration with government, private sector and donors,” he says.
One example of that collaboration is the West Africa Trade and Investment Hub, which is funded by the U.S. Agency for International Development and implemented by Creative.
Over five years, the Trade Hub will provide $60 million in co-investment grant funds to achieve USAID’s objectives to support at least $240 million in exports, $300 million in new private sector investment, 40,000 new jobs — half for women — and food security by improving private sector competitiveness in West Africa.
The Trade Hub focuses on increasing the agricultural productivity and profitability of smallholder farmers in Nigeria, Ghana, Senegal, Cote d’Ivoire and other West African countries and promoting regional and international trade and investment. The Trade Hub works closely with Prosper Africa to promote two-way trade and investment between West Africa and the United States.
The Trade Hub will be directing a portion of that grant fund toward long-term recovery from COVID-19 through co-investment partnerships with U.S. and African companies, impact and private equity funds, the U.S. International Development Finance Corporation and other Development Finance Institutions to sustain jobs, mitigate disruptions in agriculture and manufacturing, and support exports across the region and to the U.S. under the Africa Growth and Opportunity Act.
Winkler says that initiatives like the Trade Hub can give much-needed access to investment and financing to small businesses, which are the backbone of African economies.
“We need to get working capital and trade finance available to them… so that up and down the supply chains and across the economies, we’ll be able to see these companies be poised to rebound when the economy opens up,” Winkler says.
Winkler’s comments echoed those of Filipe Nyusi, President of Mozambique, who gave introductory remarks before the panel began.
“We have a new normal setting in, and we have to create the conditions to deal with that new normal,” President Nyusi says. “Small and medium-sized enterprises will need an injection of assistance so they can be revitalized.”