Restarting Africa

The COVID-19 pandemic sweeping across the world since 2020 has hit the economic growth of Africa. There is hope for Africa to recover from the crisis as the continent enjoys an abundance of natural and human resources. But fluctuations in international markets and weak domestic governance will continue to be constraints on its economic development.

The colonial exploitation history and dependence on developed countries in the past is responsible for African countries' narrow economic bases. As a result, economic reforms and industrialization promoting progress in Africa do not follow traditional patterns. Most African countries give priority to the service sector rather than industry, and the sector is the major driver of their GDP growth. This development model is referred to as premature de-industrialization or structural transformation without industrialization.

In recent years, Africa has seen tourism and retail booms and it is claiming a new role in the global consumer market. This untraditional development path emphasizing on tertiary industries has triggered speculation about further economic reforms. Some wonder whether those African countries can catch up with the world by merely transforming the service industry. The limited infrastructure conditions, incomplete trade policies and excessive government debts have a detrimental effect on African countries' resistance to the risks of the imbalances in their economic structures as well as external risks. The outbreak of COVID-19 has expectedly triggered the worst economic downturn in Africa in nearly five decades.

In 2020, Africa's GDP fell by 2.1 percent. Different regions reported different growth rates on the basis of how the pandemic affected them. Southern Africa, which was hit hardest by the virus, is estimated to have registered a decline of 6.4 percent. GDP in western and central Africa contracted by 1.5 percent and 2.7 percent respectively. Thanks to its decreasing dependency on primary commodities and an increased variety of commodities, East Africa registered the best performance, with a GDP growth of around 0.7 percent. The recession also took place in different industries to different extents. For instance, economies such as Mauritius, which are dependent on tourism, saw the biggest fall in 2020; the GDP of oil exporters is expected to have shrunk by 1.5 percent in 2020.

In 2021, Africa's economy has shown a trend toward recovery. The economic growth in some countries has exceeded expectations, and exports of some economies have increased significantly. Credit for the performance goes to raw material exports and the service industry but is subject to commodity prices, the international capital market, natural disasters, the shortage of vaccines and national security. So the growth is far less robust and resilient than that of developed and some emerging economies.

Rich and diverse natural resources and a young population build economic potential in Africa. The continent embraces nearly half of the world's rare minerals, precious metals and other resources, being the largest repository of gold, diamonds and bauxite. However, due to the plunder by the international energy market and inefficient policies and weak governance in Africa, income from selling resources has not been properly used, and the countries still lag behind other industrialized nations. So common is this phenomenon that it even has its own name－the "resource curse".

A demographic dividend is a vital strategy for Africa's economic development. Since 2015, its population has been growing rapidly, at an average rate of about 2.5 percent. People aged below 15 and between 15 and 24 account for over 40 percent and 20 percent of the population respectively, making Africa the youngest continent. The young demography creates new opportunities and a large middle class. But African countries are also faced with problems such as rising urban poverty rates, imperfect government institutions and inadequate governance capacity.

The economic development in Africa is a complex economic and social change. China, in the middle and later periods of industrialization, can share its experience with African countries, thus laying a solid foundation for cooperation. Cooperative relations are helpful for those countries to take advantage of their resources and population to promote the transformation of economic structure and achieve green recovery.

The two sides need to explore new cooperation sectors and forms. In terms of the economy and trade, China-Africa trade reveals strong vitality and resilience although the pandemic has dealt a huge blow to global trade. Apart from traditional areas such as trade, infrastructure and industrial parks, the cooperation should extend to fintech, e-commerce, communications, clean energy and big data to enhance Africa's manufacturing and its position in the global value chain.

China's development provides a plan for Africa's green economic transformation. As of 2021, it has cooperated with African countries in clean energy, environmental protection and sustainable development. The two sides have made positive progress in responding to climate change by jointly building wind power, solar energy and biogas projects. The training in hydropower, solar energy and wind power provided to countries such as Morocco and Cameroon by Chinese experts also contributes to the green transformation of local industries in Africa.

African countries have a smaller vaccinated population against COVID-19 compared to most other countries, which hinders the continent from returning to the normal track and causes social and livelihood problems, thus affecting its economic recovery. This is also where China can help in the local production of the COVID-19 vaccines in Africa.

Li Xiaoyun is lead chair professor of China Agricultural University and honorary dean of the College of International Development and Global Agriculture. Ba Feng is a lecturer at the College of International Development and Global Agriculture. The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn