The COVID-19 pandemic is expected to hit African economies extremely hard. According to the World Bank biannual Africa’s Pulse report, as a result of the pandemic, economic growth in sub-Saharan Africa will decline from 2.4% in 2019 to between -2.1% and -5.1% in 2020, depending on the success of measures taken to mitigate the pandemic’s effects. This means that the region will experience its first recession in 25 years. The decline will be primarily due to large contractions in South Africa, Nigeria, and Angola driven by their reliance on exports of commodities whose prices have crashed as well as other structural issues. This will inevitably affect Africa’s participation in trade and value chains as well as reduce foreign financing flows. Given the limited regional market, trade with the rest of the world is vital for Africa. Before the pandemic, Africa’s trade with the rest of the world has been showing good momentum. According to UNCTAD’s Economic Development In Africa 2019 report, in the period of 2015-2017, total trade from Africa to the rest of the world averaged $760 billion in current prices, and the share of exports from Africa to the rest of the world ranged from 80% to 90% in 2000 –2017 in Africa’s total trade. The only other region with a higher export dependence on the rest of the world is Oceania. However, intra-African trade, defined as the average of intra-African exports and imports, was around 2% during the period 2015–2017, and the intra-African exports were 16.6% of total exports in 2017, much lower compared with 68.1% in Europe, 59.4% in Asia, 55.0% in America, and 7.0% in Oceania. Figure 1 shows the small size of intra-regional trade in Africa compared with other regions, and (b) the lower trade linkages of Africa with the rest of the world —when compared with other regions.

Comparison of Intra-Regional Trade

In the recent decade, Africa’s trade linkage has been steadily increasing. Based on an upcoming study on Africa-Asia global value chain (GVC) linkages, exports to Asia are positively correlated with exports to the rest of the world, and increased exports from a Sub-Saharan African country to Asia tend to raise exports to the rest of the world as well as to other African countries, thus, helping Sub-Saharan African nations move up the value chains. Although exports from Sub-Saharan Africa to Asia remain highly concentrated in resource-intensive products, such as petroleum, minerals, metals, and primary goods, there are a few exceptions. For instance, Ethiopia and Tanzania have done relatively well in diversifying their export portfolios during the boom of exports to Asia. However, the COVID-19 (coronavirus) pandemic will put a brake on this for the time being. The mass production shutdowns and supply chain disruptions due to the rare “twin supply-demand shock” will create ripple effects across all global economic sectors, causing further uncertainty for a continent already grappling with widespread geopolitical and economic instability. With China, Africa’s largest trading partner, and other major economies gradually reopening their economies, Africa’s trade will gradually pick up, however, the path might not be that smooth at least for the foreseeable 1-2 years. So, where is Africa’s future market and trading opportunities? As the old saying states, “crisis is also an opportunity.” This time is no exception. African countries can build more resilient and sustainable economies if they can do things right following the pandemic. At least four policy options can be considered. First, it is crucial to further diversify African economies and strengthen the few strategic sectors. The pandemic crisis highlights the importance of food and health sectors for all countries. Africa is uniquely positioned to further leverage its rich agricultural resources by improving basic infrastructure and efficiency, and agro-processing capacity. More resources will be needed to strengthen the public health sectors, with the support of development partners. Secondly, Africa must embrace the digital age and adopt more and more digital technologies for both productions and services, such as banking, retailing, and learning as well as public services. The sectors with high-level of digitization seems to weather the storm much better. In doing so, it needs to strengthen its education system, especially the training and learning related to digital skills. Thirdly, Africa must strengthen intra-regional trade. To boost the intra-regional trade, African countries need to make concerted efforts to harmonize their trade-related regulations, customs controls, and reduce both tariff and non-tariff barriers, and meanwhile, improve the infrastructures and connectivity to lower the logistics cost. This crisis provides an opportunity to take more concrete steps towards realizing the African Continental Free Trade Area (AfCFTA). Finally, Africa will need more international trade agreements to support its growing but still fragile export sectors. This means that Africa would not only need the existing favorable treaties such as African Growth and Opportunity Act (AGOA) and Everything But Arms (EBA), but also should pursue more such treaties with other major economies, including India, Japan, China and other such markets.    

THE CURRENCY MARKETS

*** These are indicative figures as per the 09^th.June, 2020.

THE COMMODITY MARKETS IN THE GREATER BANJUL AREAS

*** Market prices are as at 05^th. June, 2020

ENTREPRENEURSHIP QUOTES FOR THE WEEK

5 Inspirational Money Quotes for Entrepreneurs

Money is often on everyone’s mind. If you’re an entrepreneur, you’re often thinking about how you can make more money, save money, and give back to others. While you may be passionate about the purpose of your business or start-up, you need money to keep things operating, pay for team members and advertising, cover taxes, and save some profit. Yet and still, you don’t want your thoughts about money to consume you and you want to be able to use money as a tool to fulfill your entrepreneurial dreams. Here are 5 inspirational quotes that can change the way you think about and view money in your business.

1. “Formal education will make you a living; self-education will make you a fortune.” By– Jim Rohn, entrepreneur, author, and motivational speaker

It’s so important to continue to self-educate when you’re an entrepreneur. Read books, go to conferences, listen to podcasts and soak in all the knowledge you can so you can apply it and increase your expertise. Sometimes, self-educating costs money when you consider things like conferences, courses, training programs and coaching. I’ve spent an overwhelming amount of money on some of these things within the past year but I try to view these expenses as investments in myself and my business.

2. “Opportunity is missed by most people because it is dressed in overalls and looks like work.”

By– Thomas Edison, inventor and businessman

It’s no secret, but entrepreneurs have to work hard to earn their money and start reaching success. Most people look at businesses and admire their impact after all the hard work has been done. Sometimes, it takes years and lots of effort to reach your goals and earn the money you truly want. Be willing to put in the work to earn profit and increase your revenue year after year.

3. “Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.”

By– President Franklin D. Roosevelt

This quote is so true. When you start to earn more money with your business, realize that it won’t lead to long-term happiness. I find the most joy when I see my work impacting people’s lives and creating change. I love receiving emails from people I’ve helped and I love the feeling I get when I’m creating something special for my audience. Some projects I work on don’t bring me any money in the beginning, but it makes me feel so excited and productive anyway.

4. “There are people who have money, and there are people who are rich.”

By – Coco Chanel, fashion designer

Your annual income is not equal to your net worth. When you make money, put it back into something that will allow you to build wealth and feel rich. Pay off your debt, invest in retirement, build up your savings, or invest in business tools that will make your life easier.

5. “Money, like emotions, is something you must control to keep your life on the right track.”

By – Natasha Munson, author, inspirational speaker and CEO of Be Magic, Inc.

Money should never be the end all be all. Use it to motivate you in your business but also view it as a tool you can use to get to the next level.