As global markets think of the post-Covid-19 world and how the pandemic will reshape business models worldwide, African countries are coming to terms with a bitter reality: the continent has still not entered the Fourth Industrial Revolution and is heading towards its first recession in 25 years.

While the impact of the pandemic on African economies is expected to be lesser than in Europe or North America, it still puts to the forefront the continent’s overdependence on key commodities for its economies to function, and under-investment into social infrastructure. For Africa, the COVID-19 pandemic is turning into a wake up call to find better ways to industrialize, chief amongst them being access to reliable, cheap and clean energy. Given global liquidity constraints however, financing Africa’s energy transition and supporting industrialization will require becoming more competitive and finding new ways to mobilize capital across key industries and projects.

The topic was at the center of a leading webinar discussion between Kola Karim, Managing Director and CEO of Shoreline Energy International, Vitol Senior Investment Manager Steven Brann, and Bambili Group Managing Director Nyonga Fofang. The webinar was organized by the African Energy Chamber (www.EnergyChamber.org) and hosted by Africa Oil & Power.

Also Read: Opinion: The African Utopia at the end of the COVID-19 Tunnel. | By: Cesar A. Mba ABOGO

The key to industrialization in Africa is access to power, which heavily relies on Africa’s ability to get its natural resources right, especially natural gas. Up until now, most of Africa’s gas has been produced for the benefits of foreign markets in Asia, the Americas, Europe and the Middle East, where it is shipped as LNG. LNG prices have dropped to historic lows and are currently below the $2 threshold in Europe and Asia, while African power producers still pay above that price to get natural gas in their turbines. Current market prices for natural gas are expected to remain depressed for a while, and should be a strong incentive for African power producers to use LNG as a feedstock and switch their fuel oil or coal plants to LNG which can be easily procured on the continent.

However, proper management of Africa’s natural resources does not stop at switching existing power plants to gas in order to benefit from a cheap and locally-available resource. It rather requires a profound transformation of how African countries see energy and how they plan to power up their economies moving forward.

In doing so, financing will become an even greater challenge as capital becomes scarce and investors look for only very resilient assets to invest in. In that regard, participants noted that it is currently challenging to monetize Africa’s LNG across industries because industrial customers are reluctant to signing the kind of multi-year commitments required by gas producers to raise debt. Because potential industrial users do not know what the future holds and do not get a clear vision on what their country’s energy mix will look like, their reluctance to switch to gas is directly impacting the attractiveness of the sector and has them keep paying expensive energy instead. Similarly, the imports of fuel oil and coal to power industries has become such a habit that making a long-term commitment on developing LNG receiving and processing infrastructure is now a matter of debate.

Participants highlighted the responsibility of both African sovereigns and the private sector in maintaining the continent in that energy status quo. In a post Covid-19 world, a situation in which Africa exports its energy while its people are in the dark, and imports finished products while its youth is unemployed is not longer viable. The industry is calling for a strong sovereign participation on establishing a connection with the private sector and thinking holistically about the development of the continent. While foreign exchange and international capital will continue to be needed, there is an urgent need to energize African communities and neighbors first. Nigeria cannot think of its gas development without keeping in mind the energy needs of its immediate neighbors for example. Similarly, South Africa cannot plan for its energy future without taking in consideration the vast gas reserves of its neighbors. The list of examples goes on.

Africa needs to use the solid base of its natural resources to create opportunities and change the narrative around its industrialization by making a difference in its own energy space. For such a paradigm shift to happen, African sovereigns need to take the lead. Only at the sovereign level can a country raise several billion dollars from multilateral agencies and invest in the necessary projects and infrastructure that will support private sector investment and growth. Only political will can truly unlock the value of African cross-border energy cooperation and open up the doors for a wider African private sector cooperation across industries and within a prosperous free trade continent.

Meanwhile, additional efforts need to be done to mobilize local and patient capital from domestic funds and African family fortunes. Participants concluded on the fact that there is a lot of do-good capital sitting all across the continent, but its mobilization requires the presentation of above-standards bankable projects run by outstanding leadership teams. It is up to African leaders and African private sector executives to put the continent on a new path to prosperity.

In 1990, when Cameroon’s football team did the unthinkable and beat Argentina in the World Cup, the proportion of the world’s population living below the poverty line was 37.1 per cent. Fast-forward 35 years later to 2015, following a global adoption of the UN’s Sustainable Development Goals (SDGs), this figure now stands at 9.6%.

The concept of a universal benevolent dictator – a classic assumption in beginner economic courses to escape the complexities of real-world decision-making – such a person would no doubt have said “The world is doing infinitely better!” 
But on the contrary, the world has not been doing as well as it should. The fact is, there have been warning signs all along.
The proportion of people living below the poverty line in sub-Saharan Africa in 2015 was an astonishing 41%, about the same as the global rate of extreme poverty in 1981.

On October 17, 2018, the then President of the World Bank Group, Jim Yong Kim, presented a report titled “Poverty and Shared Prosperity 2018: Piecing together the Poverty Puzzle.” With rigorous data but in a simple and direct way, the report clearly indicated that global conditions were not in place to bring the rate of extreme poverty below 3% by 2030.

The most alarming case in point was, where even in the most optimistic of scenarios, the poverty rate would continue to be in double digits.

The report was a pitcher of cold water in my state of mind. But it was not the first time Jim Yong Kim had jolted me. A few years earlier in 2015, in Lima, Peru, at the Annual Meetings of the IMF and the World Bank, during a panel moderated by Femi Oke, the British journalist of Yoruba descent, Jim Yong Kim’s projections caught my attention. In attendance were Peruvian President Ollanta Moises Humala Tasso; Ban Ki-Moon, UN Secretary General; Christine Lagarde, IMF Managing Director; and Justine Greening, UK Secretary of State for International Development. For 90-minutes, they spoke eloquently about the type of partnerships that would be needed to make Agenda 2030 a reality; the international cooperation that would be deployed; the necessary financing mechanisms and formulas; and the creativity and citizen action required.

Gathered in this august venue, the guardians of the global architecture responsible for eradicating poverty spoke convincingly and articulately about the world of tomorrow. Collectively, they concluded that by 2030, we would end up, to quote Oscar Wilde, in a country called Utopia. The Road to Lima was a party.

But barely three years later as 2018 dawned, the same global architecture presented us with a new story: The end of Utopia.

In December 2019, the United Nations Development Programme (UNDP) launched its Human Development Report titled “Beyond Income, Beyond Averages, Beyond the Present: Human Development Inequalities in the 21st Century”. As with the World Bank, the conclusion was straightforward and clear: While humanity is progressing, something is just not working in our globalized society. A new generation of inequalities, beyond basic capabilities, is emerging and threatens to render people living in developing countries obsolete in the future.

Combining the alarming 2018 World Bank report with the no less alarming 2019 UNDP report, the picture is not one of optimism: not only was the aspiration to eradicate poverty by 2030 not going to be met, but a new inequality gap was opening up as well.

These challenges had previously been the focus of the World Economic Forum Regional Strategy Group (WEF RSG), of which I had had the privilege of being a member.

One of the ideas behind the WEF RSG was very simple and irrefutable: Africa must leapfrog into the Fourth Industrial Revolution or risk being left behind inexorably.

Also Read: Opinion: Africa: COVID-19 response must target African agriculture and the rural poor | By: Olusegun Obasanjo and Hailemariam Desalegn Boshe

In 2019 as well as in previous years, several countries, including Equatorial Guinea, my country, made important policy decisions to define and prioritize national development aspirations in alignment with the UN’s Agenda 2030 and the African Union’s Agenda 2063. Additionally, to take advantage of the Fourth Industrial Revolution we scaled up our investments in ICT and technology and in developing the capacity of our youth. And then, COVID19 arrived!

In just a few short months the world has changed. When we return to ‘normal,’ it will be a ‘new normality’ and a brave new world.

COVID19 is an existential crisis. It is severely testing Africa’s social, economic and political resilience. In a post-COVID19 world, the continent’s leaders will therefore have to rethink many prior assumptions and find new balances for individual and collective behavior.

What I am absolutely certain of is that opportunities will emerge. Innovative minds previously imprisoned by institutional inertia and interest groups will rise to the challenges that we collectively face.

What will the brave new world post-COVID19 look like in Africa? The African Development Bank estimates that Africa will lose between 35 and 100 billion dollars due to the fall in raw material prices caused by the pandemic. The World Economic Forum estimates that global losses for the continent will be in the order of $275 billion.

There is a real risk therefore that Africa’s inequality gap will worsen in the coming years.

Ever since the virus crossed the continent’s borders, regular bilateral and multilateral consultations among African finance ministers have philosophically revolved around the need to rethink our multifaceted responses to COVID19 and other future threats that have equal or greater potential for disruption.

Also Read: Opinion: COVID-19: Despite Nigeria’s Weak Healthcare Sector, Pvp-I May Help Prevent Disease Spread. | By: Oyindamola Adejumo-Ayibiowu

Today, African States are developing strategic and in-depth approaches to human development, regional integration, digitalization, industrialization, economic diversification, fiscal and monetary policies, and international solidarity. In short, they are rethinking the causes of the continent’s underdevelopment and coming up with feasible solutions. The outcomes will undoubtedly be good for Africa and for all humanity.

To better understand the scenarios before us, there are three sparks that could light a flame in the brave new world that is before us:

1. In 2001, African leaders pledged to invest around 15% of their budgets in health. By 2020, only five countries have fulfilled this promise. No one doubts today that the health sector in Africa will be strengthened by the COVID19. There are decisions that can no longer be postponed. In mid-March, a Togolese activist, Farida Nabourema, mocked African elites who used to go to Europe to have their ailments treated, saying: I would like to ask our African presidents who travel to Italy, Germany, France, the UK and other European countries for medical treatment, please when are you leaving? On April 2, Bloomberg published an article entitled: Trapped by Coronavirus, Nigeria’s Elite faces squalid hospital, signed by journalist Dulue Mbachu. Things are going to change.
2. The vast majority of African countries, after COVID19, will have to put in place social protection systems to mitigate the suffering of the continent’s most disadvantaged. Kenya and Equatorial Guinea offer excellent  examples of countries that have regulated and put in place social protection systems that will survive and outlast our battle against this common enemy.
3. The continent’s poor pharmaceutical capacity has been a source of amazement to locals and foreigners alike. Bangladesh, a poorer country than many African countries, produces 97% of the national demand for medicines, in contrast to  Africa which is almost 100% dependent on imports.

This last note has triggered another debate: the necessary industrialization of Africa, to transform and add value to the continent’s vast and valuable raw materials.

Many African countries have already been deprived access to COVID19 essentials. Excessive global demand  has relegated Africa to the

But there is much reason for optimism. African leaders recently lauded artemisia annua tonic that Andry Rajoelina, President of Madagascar, presented to the world as Africa’s solution to COVID19 .

Our enthusiasm as Africans, is rooted in wounded self-esteem. For way too long, we have been victims of marginalization. The power to regain our dignity has too often been stripped away. Today, nestled in the souls of all Africans is an unshakable faith that the most important resource that Africa needs in order to rise up, is none other than Africans themselves.

No one will help us if we do not help ourselves. Africa is no longer asking to be taught how to fish. Africa is already rowing towards the utopia enunciated in the UN’s Sustainable Development Goals and the Africa Union’s Agenda 2063.

In spite of dire predictions and narratives, humanity always has a way of ending up in that country called utopia. Africa is humanity.

Cesar A. Mba ABOGO is the Minister of Finance, Economy and Planning of Equatorial Guinea and Member of the Regional Action Group for Africa of the World Economic Forum.

Africa has so far escaped the worst health consequences of the COVID-19 pandemic. However, the continent looks like it could be the worst hit from the economic fallout of the crisis: 80 million Africans could be pushed into extreme poverty if action is not taken. And disruptions in food systems raise the prospect of more Africans falling into hunger. Rural people, many of whom work on small-scale farms, are particularly vulnerable to the impacts of the crisis. It is therefore vital that the COVID-19 response addresses food security and target the rural poor.

At this time, the international development agenda is prioritizing health, economies, and infrastructure. But there must also be a focus on food security, agribusiness, and rural development. This is especially important on the African continent. Agriculture contributes 65 percent of Africa’s employment and 75 percent of its domestic trade. However, the rich potential of agriculture as a tool to promote food security and fight poverty is at risk from the effects of COVID-19.

In March, the UN Economic Commission for Africa predicted growth in Africa would drop from 3.2 percent to 1.8 percent in 2020. Within the continent, lockdowns are disrupting inter-regional trade. The effect of restrictive measures on food trade is especially worrying, in particular for food-importing countries, but also because of shrinking export markets for the continent’s farmers.

Across the European Union (the largest export market for Africa’s fresh fruits and vegetables), demand has dropped for popular products such as Kenyan avocados, South African citruses, and Moroccan vegetables. Kenya has also recorded an 8.5 percent decline for tea exports to destinations like Iran, Pakistan, and UAE. Within countries, we are already seeing that interruptions to transport and distribution systems are impeding small-scale farmers from accessing essential inputs – like seeds and fertilizer – and from getting their food to markets.

African governments have defined stimulus measures to mitigate national and regional economic impacts of COVID-19. As they do, they must remember that investments in agriculture can be up to five times more poverty-reducing than investments in other sectors. Investments in rural, small-scale agriculture are particularly important for the region’s food security, for safeguarding the livelihoods of some of its most vulnerable people and for sustaining the gains in poverty alleviation and wealth creation.

Small farms everywhere traditionally make a huge contribution to global food security. Around the world, small-farm dominated systems produce 50 percent of all food calories on 30 percent of the world’s agricultural land. In sub-Saharan Africa, however, the role of small-scale farms is even more significant: 80 percent of farms are small in most of these countries.

Even before the current crisis, globally more than 820 million people were going hungry daily. And the majority of the world’s poor and hungry people live in the rural areas of developing countries. In Africa, reliance on food imports, and lack of services and infrastructure to enable small-scale farmers to produce and market food, along with the shocks of climate change, have all increased the fragility of food access.

In April, the World Bank projected the pandemic would hit Africa the hardest of any region, pushing 23 million people into poverty. This raises the question of how small producers in Africa can get access to inputs and finance to grow and sell the food needed to ensure food security and support livelihoods. African leaders must be in the vanguard of funding solution

In April, the International Fund for Agricultural Development (IFAD launched a multi-donor fund- COVID-19 Rural Poor Stimulus Facility (RPSF) – to address the immediate fallout of COVID-19 for rural people in Africa and elsewhere. IFAD specializes in investing in poor rural people, targeting the poorest and most marginalized. Among other goals, the new facility will provide small-scale farmers and fishers with basic inputs, and help them access markets and maintain cash flow. IFAD committed US$40 million to the new fund but aims to raise at least $200 million more from the UN Member States, foundations, and the private sector.

The Facility will complement and scale-up the work IFAD has already been doing to repurpose existing project activities. In Malawi, for example, a programme is providing social cash transfers to ultra-poor farmers and delivering messages about financial literacy and COVID-19 prevention. In Eritrea, vulnerable households are receiving small ruminants and seeds to strengthen, maintain production, access markets, and safeguard household food security during the crisis.

Agriculture contributes 65 per cent of Africa’s employment and 75 per cent of its domestic trade

These immediate actions are essential to mitigate the worst risks of the crisis. They are also important to safeguard IFAD’s past and ongoing investments to build the long-term resilience of rural livelihoods. Ultimately, we need to ensure that rural people and their businesses are the foundation of resilient rural economies and food systems across Africa. Then, when the next crisis strikes, the vulnerable people of today will be better able to protect their livelihoods and avoid the risk of falling into poverty and hunger.

So while it’s urgent to feed people today, we also must look to the days, months, and years ahead. This is one reason why IFAD prioritizes long-term rural and agricultural development and building resilience to future shocks. It is also why we urge policymakers to adopt any relevant lessons from how previous outbreaks like the Ebola virus affected agriculture and food systems.

In the long term, this pandemic underscores the need for Africa to transform agriculture and agribusiness as the surest path to inclusive economic growth, wealth generation, and greater resilience.

As Special Envoys, we believe in IFAD’s exceptional mandate and will continue to work closely with the Fund in mobilizing resources to support the most vulnerable on the African continent. The pandemic will expose the livelihoods of rural marginalized groups to unprecedented challenges. To restore hope to those affected, we commit strongly to the idea that no one will be left behind, especially in Africa.

Olusegun Obasanjo is the former President of the Federal Republic of Nigeria and Hailemariam Desalegn Boshe, former Prime Minister of the Federal Democratic Republic of Ethiopia