By Danesh Ranchhod, vice-president and executive director at Franklin Templeton Emerging Markets Equity



As with most parts of the world, what started out as a health crisis has also turned into a humanitarian and economic crisis. While Covid-19 infections rates have been relatively low on the African continent compared to the rest of the world, much of the region’s economies are being impacted due to the various forms of restrictions being imposed on citizens. The International Monetary Fund (IMF) has forecast Sub-Saharan Africa Gross Domestic Product (GDP) to contract by 2% in 2020 vs growth of 3% in 2019. Some of the oil-exporting countries such as Nigeria are likely to face a sharper contraction due to the lower oil price. Many current forecasts and outlooks could be rendered irrelevant given the highly uncertain nature of the Covid-19 infection and the variability of outcomes given different government policy responses. At the same time, there is a growing risk that the spread of the virus could still escalate to unmanageable levels. This is due to some additional challenges facing many African countries.



FOR MORE COVID-19 COVERAGE VISIT: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>



1] While the level of urbanisation is still low compared to many other frontier and emerging markets, urbanisation has actually been growing fast off a low base to result in high density informal communities in larger cities. The nature of these living environments makes social distancing measures almost impossible to follow through in a government ordered lockdown.



2] Healthcare resources are constrained, with facilities lacking the necessary equipment such as ventilators and high care beds to deal with mass volumes of patients that could get sick. &nbsp;A report from McKinsey &amp; Company showed Africa has 1.4 beds per 1000 people compared to China which has 4 beds per 1000 people. Additionally, laboratory capacity is low implying that not enough testing is being done to collate a true gauge of active cases. Genomic sequencing of the virus in Africa is also the lowest globally. There is a risk that Africa may not be well represented in a potential vaccine; vaccines are typically developed on large and varied pools of sequencing data so that there is good representation of strains that may have mutated.



3] Much of the continent’s economic activity is driven by informal businesses that are small in nature. A hard lockdown would result in many businesses having to close down and subsequently leaving staff and business owners without income. There is also not much to rely on in terms of savings pools, while insurance or fiscal support for loss of income is negligible.



4] In the developed world and many parts of Asia, governments have announced Covid-19 related fiscal support for citizens and businesses amounting to 7%-10% of their respective GDPs. These far exceed support programmes at the time of the Global Financial Crisis. This quantum (relative to the GDP) of support is not possible in Africa due to fiscal pressures already faced. While the IMF and World Bank have been disbursing crisis funding to help with healthcare and related costs, it is likely that a lack of more broad fiscal support together with a hard lockdown could see African economies struggle to recover.



These challenges preclude many African governments from adopting some of the measures that are being employed elsewhere in the developed world and more formalised emerging Asian economies. <a>Extended hard lockdowns in Africa are likely to have a more dire result due to a devastating economic environment that could see increased deaths from starvation.</a>



To find a balance between containing the virus and maintaining a semblance of economic activity will require a different approach. While African governments may not have the fiscal capacity to rapidly increase hospital and equipment capacity, they can more easily at a lower cost increase widespread testing to get a true sense of active cases.  The testing can be multi-level with initial screening doing a lot to filter patients that require immediate testing and care. This together with mobile operators can introduce a form of smart contact tracing and awareness using mobile phones. As the level of cases will initially be low, infected patients can be housed in basic isolation centres that do not require high care in key areas to help alleviate pressure on hospitals and reduce the reproduction rate given it is hard to isolate in high-density informal areas. Other soft lockdown measures such as border control and social distancing measures where possible can still take place to help flatten the curve. Most importantly having confidence around widespread testing and tracking will help to create more timely data on active cases and recoveries and assist in identifying hot spot areas that could then be considered for targeted lockdowns rather than national hard lockdowns. It can also allow economic activity to remain in some form allowing many informal businesses to continue to operate and giving much-needed income to large parts of the populace that have no social safety net in any form.

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Op-Ed: Why Africa cannot afford an extended hard lockdown in the COVID-19 crisis

By Zandre Campos, CEO of ABO Capital.



As the coronavirus outbreak continues to spread, no country is immune. Global cases are well into the millions and Africa is continuing to see a rise. There are several African countries <a href="https://coronavirus.jhu.edu/map.html">whose numbers are rapidly increasing</a> including Algeria, Egypt, Morocco, and South Africa. However, their numbers are still relatively low compared to some of the hardest-hit countries, such as the United States, Russia, the United Kingdom and Italy. In my homeland of Angola, we have been very fortunate to have less than 50 reported cases to date. However, despite the swift actions taken by the country to keep the rate of infection relatively low, its role in the global economy means it is still at risk. Angola must prepare for when travel and trade resume at full speed, as it will be critical to remain vigilant and prepared. 



The cost of the coronavirus, if it becomes more widespread, will not only be to the health of Angolans, but to its economy, as seen in the latest Ebola epidemic. During the Ebola epidemic of 2014 to 2016, there were approximately 28,600 cases and 11,300 deaths<a href="#_ftn1">[1]</a>. In addition to the devastatingly large loss of life, Ebola contributed significantly to economic hardships in the countries that were most impacted, ie, Guinea, Sierra Leone, and Liberia.



For more COVID-19 coverage visit <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>



In 2014, the World Bank projected that the three nations would in 2015 lose approximately $2.2 billion in their gross domestic product. The primary donors in the international response, the United States, the United Kingdom, and Germany, donated a combined total of over $3.6 billion in relief efforts. The sectors most greatly affected were the private sector, agricultural production, and cross-border trade as restrictions on movement, goods, and services were put in place<a href="#_ftn2">[2]</a>. Not only did this hurt the GDP and the economy, but it had a direct impact on the lives of those in affected regions. While a slowdown in these sectors leads to a loss of jobs and job security, it often impacts the most vulnerable in society first. Decreased agriculture and trade can cause food shortages, which have a direct impact on low income individuals and their ability to have access to food.



if Angola fails to remain diligent and keep the rate of infection relatively low, it could come at a severe economic cost as shown by countries that had Ebola, therefore different industries need to step up to help the relief efforts. While some industries are being negatively impacted by the coronavirus, they can also do a number of things to help. For example, Angola’s oil and gas industry has been hard hit by the coronavirus. As people across the world shelter in their homes, the price of oil has been consistently dropping and the industry is facing a significant downturn. However, there are a number of ways that those in the industry can assist Angola and the challenges it is facing caused by coronavirus.



For one, many companies have and can donate to the World Health Organization’s COVID-19 Solidarity Response Fund, which purchases and ships protective equipment for medical workers. The fund also puts money towards research to develop a vaccine for the virus. In addition to donating to relief funds, many companies have and can turn their focus to producing products that can be useful in the fight against the coronavirus. Some of the materials that are used in fuel production, such as ethanol from sugarcane, can be made into disinfectant instead. Oil and gas companies can shift their production in other ways as well. For those with major factories, if the resources are available, they can produce not only disinfectants, but face masks and protective gear too.



Despite the downturn that the oil and gas industry is currently facing, there are other ways that companies can provide relief in multiple ways. For example they can follow the example of those offering free fuel to service vehicles, while others are giving fuel cards or fuel vouchers to service workers. Angola’s oil and gas industry is a crucial component of the economy. While it is in a vulnerable position right now, this doesn’t mean that companies aren’t able to shift their focus, and their resources, in a way that combats the coronavirus.



While most businesses and industries in Angola will weather the coronavirus pandemic, and even come out stronger on the other side, it highlights the need for an improved education system to be put in place. The coronavirus pandemic draws attention to the fact that the country does not have enough doctors or medical professionals. Angola will have a shortage of doctors if the youth of Angola aren’t getting the best possible education. The need for a highly trained medical community may be brought to light due to current issues, but it will not go away after this virus does. Angola must utilise the scope and knowledge of its ancestors to help in developing other sources of knowledge or solutions.



What is clear is that while the coronavirus might not be going away any time soon, it is presenting an opportunity for companies to mobilise in inspiring ways to help the best that they can. With the ability to come together to provide much-needed materials such as disinfectants and face masks, and the more traditional output of fuel, there is hope in our fight against the global health pandemic. In addition, there are many lessons that we can learn from the past including how to stabilise the economy, keep each other safe, and ultimately make Angola a stronger country.



[1] <a href="https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/index.html" target="_blank" rel="noreferrer noopener">https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/index.html</a>



2 <a href="https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/cost-of-ebola.html#N3" target="_blank" rel="noreferrer noopener">https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/cost-of-ebola.html#N3</a>



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<a href="#_ftnref1">[1]</a> <a href="https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/index.html" target="_blank" rel="noreferrer noopener">https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/index.html</a>



<a href="#_ftnref2">[2]</a> <a href="https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/cost-of-ebola.html#N3" target="_blank" rel="noreferrer noopener">https://www.cdc.gov/vhf/ebola/history/2014-2016-outbreak/cost-of-ebola.html#N3</a>

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Op-Ed: How Angola can use its industries to fight COVID-19

By George Ott – Economist



The dual shocks of the Covid-19 pandemic and the international oil price slump are expected to cause severe damage to economies across the African continent.



Oil-dependent African sovereigns are particularly vulnerable to the associated drop in export revenues and resultant rise in currency pressures.



In this regard, there has been considerable uncertainty and speculation about the capacity of both the West African Economic and Monetary Union (Waemu) and the Economic and Monetary Community of Central Africa’s (Cemac) to absorb these shocks and to protect the value of their respective regional currency pegs to the euro.



The CFA franc (comprising the Central African XAF and the West African XOF) is pegged to the euro at CFAfr655.96/€.



Despite relative economic resilience across the Waemu region, oil-exporting members of the Cemac are coming under severe strain as international oil prices fell to decades-low levels.



Moreover, with the Cemac region still in the process of rebuilding external buffers drawn down during the 2014-16 oil price crash, the region’s capacity to absorb the massive shocks of the current global crises is expected to be limited.



With many indicators pointing towards severe strain on the CFA franc, concerns have been raised about a potential devaluation of the currency peg.



With speculation circulating in the local media across the Cemac region, both the Bank of Central African States (Beac) and the French Treasury have released statements to dispel rumours that a devaluation was on the cards.



On Tuesday, May 12, Bloomberg reported that Odile Renaud-Basso, the head of the French Treasury, affirmed the institution’s commitment to ensure the convertibility of the CFA franc, stating in a telephonic interview that they “do not see a need for adjusting the exchange rate. So that is not on the agenda”.



On the same day, Reuters quoted a statement by the Beac in which it denied that it was considering a devaluation of the CFA franc and that foreign exchange reserve levels remained “comfortable”.



With economic and financial pressures mounting on the CFA franc, there has been a measure of uncertainty pertaining to the French Treasury’s willingness to support the regional peg by ensuring the unit’s convertibility to euros at the current rate.



This commitment has not yet been tested and with economic conditions in Europe also hard hit, concern in this regard was arguably warranted.



Therefore, the French Treasury’s public backing of the peg is significant and reduces uncertainty at a time when severe pressures on the CFA franc are unavoidable.



These developments also add weight to our current baseline expectation for the CFA franc to remain pegged to the euro at the current rate of CFAfr655.96/€.



Although economic risks are set to rise across the region in the coming months, we nevertheless expect that financial assistance from multilateral organisations should have an added stabilising impact across both the Waemu and Cemac regions, with a host of member states already having received such assistance.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Administrators propose sales plan for SA retailer Edcon, see potential job cuts

Op-Ed: Rumours of a CFA franc devaluation in West & Central Africa dispelled

By Nic Wolpe



The world has become a surreal Hollywood movie. As Shakespeare said: “all the world’s a stage, and all the men and women merely players.” Today COVID-19 is also a powerful player wreaking havoc on our lives and erstwhile cosy view of globalisation.



Though it is unclear what the long-term economic and structural consequences of COVID-19 may be, what is irrefutable is that the virus has changed our lives forever..



We are now compelled to change how we do business, interact and behave. The idea of social distancing, which just a few short months ago was unheard of, has become the middle words in human relations.



The spread of the virus has seen drastic measures; it caught us off guard, despite numerous warnings.



Over the last few months much has been said about how the world will change. Concerns and fears have been expressed that lockdowns have begun to threaten the very core of universal human rights and civil liberties on the way to an economic meltdown of gigantic proportions.



As the debate rages between the trade-off of lives versus economic wellbeing, the reality is that the lockdown has brought severe economic and social hardship with the poor the hardest hit.



Yet, the pandemic has hit everyone. The middle class, the employed, self-employed and businesses alike. Unemployment is spiking, and as the harsh impact of the economic fallout cascades across the world, we are questioning and re-evaluating the feasibility and benefits of globalism and of neo-liberal, free market policies.&nbsp;



As attention turns to the easing of lockdown restrictions and the gradual reopening of economies and economic activity devastated by the lockdowns, the question on everyone’s mind is how we as a global community – for it can only be done in solidarity – are going to rejuvenate and reboot economic activity.



The last time the world experienced such an economic crisis as devasting as the one we are currently experiencing was the Great Depression of 1929–33. Millions were left unemployed, homeless, and dependent on food banks and kitchens. We are witnessing the same today, as the lockdowns are pushing the world into a global depression.



Thus, to prevent the advent of a global depression, and to ensure that economies are able to withstand the impact of economic lockdowns, it is imperative that a global economic stimulus package is implemented to ensure countries’ economies are able to bounce back. &nbsp;



Therefore, it should be incumbent on the world ‘s richest nations to provide an economic stimulus package that draws on President Roosevelt’s New Deal and the Marshall Plan.



Both provided the necessary stimulus; the New Deal to restart the US economy and pull it out of the Great Depression, and the Marshall Plan to enable Western Europe to rebuild their shattered economies from the ashes of war.



Roosevelt’s New Deal was a series of initiatives to stabilise the US economy and to provide security, jobs, and relief to those who were suffering. The New Deal fundamentally and permanently changed the U.S. federal government by expanding its size and scope – in particular, its role in the economy. The Marshall Plan, also known as the European Recovery Programme, provided financial grants at no interest.



As South Africa went into lockdown, concern and speculation was (and still is) rife that our stagnating economy, high and rising unemployment, and weak public finances, the consequence of a shrinking tax base, will be heading for an economic Armageddon. This concern was further compounded by Moody’s downgrading South Africa to junk status at the end of March, which made borrowing for government and state-owned enterprises that much more costly. However, lost in the fear and economic dilemma is that Britain at the end of March was also downgraded – from AA to AA-, but nevertheless downgraded.



Thus, at this global moment of economic reckoning, the focus should be on the need to pump liquidity into global economies through either increasing domestic borrowing – increasing the deficit to GDP – or grant stimulus packages through the Bretton Wood Institutions. For, as the US economist Paul Krugman has put it, paraphrasing Franklin Roosevelt, ‘the only fiscal thing to fear is deficit fear itself.’



It would not be an exaggeration to suggest that South Africa is facing its own Ground Zero, which in itself is an opportunity to construct and develop our own New Deal and in the process address the underlying structural imbalances created by the legacy of apartheid. As President Ramaphosa has continuously stressed, the present conditions offer the country the opportunity once and for all to undertake systemic restructuring to address the distortions and imbalances caused by the legacy of apartheid. It offers a new economic dawn and path that will be all inclusive.

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COVID-19: How will we recover?

President Ramaphosa should be highly commended for his decisive leadership and rapid action at the start of the coronavirus crisis. The response from government at that time is precisely what anyone could have hoped for – following consultation with medical experts and with due consideration to scientific analysis and global best practice, a strict lockdown was implemented in order to stem the spread of the disease. This was a brave decision given that so much was unknown about this virus at the time, however concern is rapidly growing around the severity and duration of the lockdown, particularly as new data and insights into this virus emerge.



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The stark reality is that South Africa simply cannot afford an extended lockdown period. We do not have the financial muscle deployed by developed nations to mitigate the negative economic consequences of an extended lockdown, especially following more than a decade of rampant looting of state resources. There also seems to be an automatic assumption that big business will bear the brunt of the economic crisis – we are expected to keep paying salaries, to keep paying taxes (although deferred to assist with immediate cashflow challenges), to keep paying rentals, and to keep servicing loans. How is that possible when we are not allowed to generate revenue? Business has been forced to navigate a torrid operating environment over the past decade and many have experienced significant capital erosion. An extended lockdown period will be the final nail in many coffins and we’re already witnessing the agonising demise of some of South Africa’s best-known companies. If this trend continues, there will be little left to save by September.



It may seem callous to call for a return to business when it may result in further infections and deaths, however this is not a case of prioritising profits over lives. If SA hopes to rebuild any form of economy following this pandemic, we will need a strong and cooperative business sector. Government can neither manage this crisis on their own nor rebuild the economy and create jobs following it. However, the long-term sustainability and needs of big business is conspicuously absent from the current presiding narrative.



It would be expected that the medical professionals advising government would be biased toward the preservation of life and whilst their perspective is invaluable, it needs to be balanced with a view toward the long-term prosperity of our nation. The latest research and statistical analysis indicates that far more people may lose their lives as a result of the humanitarian crisis created by the lockdown than from the virus itself. The concern at this stage therefore goes far beyond business sustainability but also extends to our national ability to maintain social order and mitigate the catastrophic impacts of the lockdown. Business has a duty of care and stewardship toward the society in which we operate but we cannot exercise that duty if our voices are not heard or our sustainability concerns addressed.



The unfortunate truth is that there are many things that kill South Africans every year, not least of which is TB – a completely curable disease that kills approximately 3000 South Africans every month (compared to 161 CV-19 deaths during the past two months). A tragic consequence of the attention being focused on this novel disease, is the stigma that inevitably follows it, and there are now reports of TB and HIV patients who have stopped visiting local clinics to collect their TB and HIV medications, for fear of being stigmatised as COVID-19 cases. Whilst the coronavirus might kill you, TB will kill you if left untreated. If the intention is really to save lives, there are numerous initiatives that could do that without destroying the entire economy.



It is still completely unknown how severely South Africa may be impacted by COVID-19. Everything that’s been done to-date has been based on modelled projections of what could happen. Those models are based on data from other countries which are significantly different to South Africa. We simply don’t know if our climate, National Routine Immunisation Schedule, or any other factor may have a mitigating effect. What is clear is that the actual death rate has been substantially lower than previously predicted. The claim that this was because of the severity of the lockdown seems unlikely, as it is fairly apparent that social distancing is not being adhered to in most parts of the country with extensive queueing and crowding happening every day as an increasingly desperate populace attempts to collect grants or secure a meal.



The data being disseminated globally, and which likely informs the thinking of our national advisors, is also horribly skewed in order to support a particular narrative. Whilst total death rates are constantly updated and serve to strike fear into our hearts, it has now emerged that less than 3% of all deaths in the USA and Italy could be directly attributed to COVID-19. The other 97% of patients already had at least one severe co-morbidity which may have resulted in death anyway. Whilst 270&nbsp;000 people have died from COVID-19 globally (including the 97% who had pre-existing conditions), it may surprise you to learn that around 18 million die every year from cardiovascular diseases (albeit non-communicable) and 1.2 million from the worst infectious disease, tuberculosis (TB). It begs the question as to whether the global response, based on projections of a worst-case scenario, has been proportionate to the actual risk and observed impacts to-date.



It is expected that a vaccine, if it is even possible to create one, will take at least another 18 months. There is no country that will be able to enforce a lockdown for that long. Lockdowns will not eradicate the virus, so we already have to accept that countries will start opening their economies while this virus is still around. Given that we are not investing in new healthcare infrastructure that requires long build times, we have to accept that we are as prepared as we can be for the inevitable spike in cases. There is no point in delaying the inevitable any longer whilst the economy crumbles and our people starve.



Government urgently needs to engage business as partners in this crisis. A key issue with respect to a continued lockdown is the extent to which testing has been done. With relatively few tests completed and a slowing of the government testing rate, we do not have a sufficiently broad and deep data set to understand how and where the disease is spreading in the country. In the absence of such data, a national lockdown becomes the only blunt instrument at the disposal of government to curtail the spread of the infection. Allow business to return and shift the responsibility of testing every employee onto the private sector – it is in the interests of business to ensure we have healthy employees and the exponential growth in the data set will be invaluable for government decision-making.



With some questionable decisions being made and confidence in government waning &#8211; the obscure National Command Council and its lack of transparency around regulatory decisions has not helped in that regard – it is very quickly approaching a situation where large-scale State violence will be required in order to enforce the lockdown regulations. This is perhaps why the decision was taken to deploy more than 73&nbsp;000 additional soldiers in our streets. Given our history in this country and our hard-fought democracy, can we really accept that more people may die from hunger and State violence to enforce the lockdown, than may actually die from the virus?



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Here’s how to apply for SA’s COVID-19 loan guarantee scheme

Op-Ed: South African businesses call for urgent end to lockdown

By Andrew Lapping, Chief Investment Officer at Allan Gray



As South Africans, we want our country to prosper and the quality of life for all those living within our borders to improve. Millions live in total poverty and rely on family or intermittent work to get by: life is tough, and often short, as malnutrition and hardship take their toll. The most effective way to lift people out of poverty and improve quality of life is through education and economic growth.&nbsp;



I am concerned that our government’s lockdown approach and the subsequent economic hardship inflicted on our people will cost more lives than it can save. I realise this is a controversial statement in a context where people are very fearful and understandably concerned about their health and the wellbeing of their families. An effective government must make difficult decisions that involve trade-offs and cost-benefit analysis. I am not saying we should trade lives for economic growth; I am saying we must consider how we can save as many lives as possible and give better lives to as many South Africans as possible with our limited resources.&nbsp;



President Cyril Ramaphosa’s initial lockdown decision was justified to buy time in order to gather our health resources and prepare our hospitals. It was never meant to be a strategy to eliminate the COVID-19 virus – this is an impossibility. The idea behind lockdown is that the same number of people get ill, but the infections are spread over a longer time in an effort not to overwhelm the health system. Our government’s lockdown strategy has morphed into something else entirely.&nbsp;



As new information emerges, it seems the virus mortality rate is substantially less than many feared, and many of the more alarmist predictions that led to lockdowns across the globe have proven to be flawed. The government must absorb this information, particularly given the youthful South African population.



There are two important questions:



<ul class="wp-block-list"><li>How many COVID-19 fatalities can be avoided through the lockdown?</li><li>What is the economic, and therefore human, cost of the lockdown?&nbsp;</li></ul>



I will not go into detail on the potential number of lives saved by the lockdown. There is a great deal of information available* that indicates the lives saved by this strategy will be minimal unless the lockdown means the number of infections can be supressed until a vaccine becomes available. Data indicates the mortality rate for those below 70 years of age is less than 0.2%; only 2.9% of South Africa’s population is older than 70. Furthermore, lockdowns or a lack thereof, seem to make little difference to the total number of cases a country experiences. It sounds tragic and defeatist, but it is not possible to make the virus disappear through lockdown, particularly in a country like South Africa.&nbsp;



Economic and human costs are two sides of the same coin. Studies indicate that mortality rates double with job losses. A smaller economy means fewer resources to allocate to healthcare and education in future. National Treasury thinks up to seven million people could lose their jobs. This could lead to tens of thousands of additional deaths.&nbsp;



The stimulus package outlined by the government is R500bn. SARS thinks tax collection could fall by R250bn this year as a result of the shutdown.&nbsp;Given government reallocations, this means additional debt of&nbsp;approximately R500bn in a single year. The economic damage will linger, tax collections are unlikely to recover to previous levels for years to come. The&nbsp;R50bn interest bill on this additional debt burden means&nbsp;R50bn less to spend on education, healthcare or other services – not just in 2020, but in perpetuity.&nbsp;



An extreme worst-case scenario for South Africa is 150&nbsp;000 COVID-19 deaths (most models indicate worst-case scenarios of 50 000). This is based on 50% of people contracting the virus with a 0.5% fatality rate. (A more likely worst case is a 0.2% mortality rate of 50% of the population, which is 60 000). This is a huge number of deaths and a great tragedy. Let’s assume the lockdown manages to reduce the number of fatalities by 50% by supressing the illness until a vaccine is discovered: This would be an incredible success. 75 000 lives would be saved. The direct cost per life saved in this scenario is R6.6 million; indirect costs will be far greater. I know this puts a price on human life but, unfortunately, this is what government has to do every day when allocating resources. On&nbsp; the other end of the spectrum, if the disease can’t be stopped, and a vaccine is not discovered, then almost no lives will be saved from COVID, but we will have destroyed the economy, increased government debt by R500bn, and lost a great number of lives through higher mortality not related to COVID. South Africa’s 2020 budget called for healthcare spending of R229bn and police expenditure of R221bn: small amounts in comparison.



Sadly, because South Africa is a poor country, we have a very high mortality rate, and therefore low life expectancy. 410 000 South Africans die from natural causes each year, including 37 000 people from TB and 32 000 from diabetes. In addition, 15 000 die in road accidents and 21 000 are murdered. These deaths are equally tragic and perhaps even more so as they are often preventable.&nbsp;



Unlike Europe, South Africa has a limited social security net and an informal economy. Many people have no savings and have lost their livelihood with the lockdown. Hunger is an immediate reality. Malnourished children are disadvantaged for the remainder of their lives due to stunting. The government provides a child grant, but there are millions of immigrant children who have no access to this grant.&nbsp;



Just as economic growth and prosperity save lives, economic destruction and poverty cost lives.&nbsp;



So why am I writing this now? Firstly, every week the lockdown continues, the economic cost compounds. Since the lockdown was enacted six weeks ago, I have urged government to consider the full picture, including the human and economic costs of their decisions, and I have provided them with balanced data. I have detailed how this data indicates the lockdown strategy is tragically flawed. We can no longer afford to blame “the virus”, when the vast majority of the job losses and suffering is the consequence of a strategy that has not fully accounted for the human cost of the lockdown on the economy. I hope that in making this commentary I am contributing to a heightened awareness of the issues, not emotion, underpinning this discourse.



Secondly, it is to reiterate how we think about managing your portfolios against this backdrop. We all have our views on what is the right or wrong strategy for government. However, most importantly for us as investors, we must deal with the situation as it is, and invest your funds accordingly to protect capital and maximise long-term returns.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

COVID-19: South Africa eases lockdown to revive battered economy

Op-Ed: Counting the economic cost of South Africa’s lockdown

The following post has been provided by SA Shares.



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<h2 class="wp-block-heading" id="h-forex-vs-stocks-and-trading-factors-involved">Forex vs Stocks and trading factors involved</h2>



<h3 class="wp-block-heading" id="h-volume">Volume</h3>



The Forex market is the largest financial market in the world with the daily trade value at approximately $5 trillion a day and the stock market reaching only around $200 billion a day.



There is an astronomically high volume of participants in the Forex Market and due to this high volume, traders have orders executed faster and easier with the added benefit that the prices are closer to what they desire.



<h3 class="wp-block-heading" id="h-liquidity">Liquidity</h3>



As soon as there are higher volumes in market, it results in higher liquidity which results in tighter spreads along with lower costs on transactions.



The spreads and transaction costs involved with Forex are significantly lower than that of Stocks due to the high volume and the liquidity of the Forex market.



<h3 class="wp-block-heading" id="h-24-hours-a-day-5-days-a-week">24 Hours a Day, 5 Days a Week</h3>



The Forex market is open all day and almost every day, with the exception that there is a weekend gap. Forex is not transacted over a traditional exchange, but through an OTC and Forex can be traded all over the world despite time zones and trading sessions.



Stocks, however, are subjected to stock exchange hours and even though NYSE and <a href="https://forexsuggest.com/nasdaq100-forex-brokers/">NASDAQ</a> have extended some trading hours, traders may face low trading volumes as well as lower liquidity during these times.



<h3 class="wp-block-heading" id="h-commissions">Commissions</h3>



When looking at the trading costs involved of trading Forex, traders will see that Forex Brokers often may not charge commissions on currencies traded but instead make a margin on the spreads.



Stockbrokers, on the other hand will, in most cases, be subjected to paying both the spread and commission fees to the broker.



<h3 class="wp-block-heading" id="h-narrow-and-wide-field-of-focus">Narrow and wide field of focus</h3>



There are virtually thousands of stocks that traders can choose from and it may be overwhelming in addition to requiring extensive research.



Forex pairs can be divided into major, minor, and exotic pairs with major pairs being the most traded amongst them all. Keeping track of currencies can easily done by utilizing an economic calendar.



<h3 class="wp-block-heading" id="h-leverage">Leverage</h3>



This is an exceptionally useful tool in trading and can be used as a way of boosting the account of the trader, allowing them to open larger orders despite their initial deposit and funds available in their trading account.



Brokers tend to offer a higher level of leverage on Forex than what is offered on stocks with Forex leverage ranging from 1:30 and even up to 1:1000, depending on the broker and their regulation and authorizing body.



Stocks however provide traders with a leverage of 1:2 which may go up to 1:50 depending on the stockbroker.



<h3 class="wp-block-heading" id="h-influences-on-prices">Influences on prices</h3>



Forex prices are affected by global news and these prices are subjected to the political and economic situations that emerge in other countries. It is imperative that traders keep track with developments in macroeconomic issues such as GDP, political prospects, and more.



The prices of stocks are also subjected to movements in these macroeconomic conditions, but on a much larger scale. News and earnings reports pertaining to the underlying stock of the company or the company sector result in price changes and movements.



<h3 class="wp-block-heading" id="h-regulations">Regulations</h3>



Due to stocks being traded on major exchanges, there are extremely strict regulations, and this may impose unwelcome limits, but it protects the trader to a certain degree, and it remains one of the most important factors of having chosen a regulated broker.



Forex trading is a lot less regulated than the former, but it still remains imperative to trade using a well regulated broker to avoid great losses which can be incurred and risking fund safety to stand a chance of increased gains, is not worth the risk.



<h2 class="wp-block-heading" id="h-how-do-beginner-traders-choose-which-market-to-trade-in">How do beginner traders choose which market to trade in?</h2>



Taking the differences and limitations of each market into account, it comes down to preference and trading needs along with objective, and each trader is going to differ in all of those criteria.



Deciding in which market to trade, traders will have to have a thorough understanding of the characteristics of each market and the fundamental differences between them to be able to evaluate which market will better suit their needs.



Traders will need enough knowledge of each market, their goals, trading style and their tolerance of risk in addition to their willingness and the extent to which they can be exposed to varying levels of risk.



A lot of traders choose to trade in both the Forex and the Stock market, while others only choose one. Each market has great investment opportunities, each with perks and risks.



Conclusion and Writer’s Opinion



There is no financial market that does not offer great opportunities that are accompanied by some level of risk and it depends on the beginner trader and their evaluation on what they want to attain, whether it is sustainable and what they are willing to risk.



By drawing up a trading plan that details what the trader’s trading needs are, beginner traders can then start exploring the best options which are according to their trading needs.



It is imperative that traders conduct enough research on financial markets along with the different assets that can be traded to obtain a clearer understanding of how it will suit their short-, medium- and long-term needs.

Forex trading vs Stock trading

Forex Trading versus Stock Trading – A Beginner’s Guide

By Jee-A Van Der Linde – Economist



The World Bank will grant Zimbabwe $7m to help fight the economic damage caused by the Covid-19 pandemic.



The Washington-based lender said it will mobilise $5m from its Global Financing Facility Trust Fund towards the outbreak and redirect roughly $2m from its ongoing Idai Recovery Project to communities in need.



The aid comes at a crucial time and despite Zimbabwe being in debt arears with numerous multilateral and bilateral lenders, which renders the country ineligible for new loans or debt forgiveness.



At the beginning of April, Finance Minister Mthuli Ncube wrote to the IMF as well as other leading international lenders, pleading for financial assistance. With more than half of the population in need of food aid and the entire world facing a health pandemic, conditions in the country have reached an acutely distressing point.



Zimbabwe can no longer go at it alone.



After having settled $107.9m of debt with the IMF in 2016, the country is still indebted to the World Bank, African Development Bank (AfDB), and European Investment Bank (EIB), while significant amounts are also owed to other creditors, both within the Paris Club and outside.



The debt situation is precarious, with total external debt (largely in the form of government debt) having ballooned to over $8bn, according to the Ministry of Finance (MoF).



The reasons for this come down to years of economic mismanagement and frequent policy errors.



That said, Zimbabwe is eager to restructure and repay its debt obligations in order to become eligible for new loans. Minister Ncube has previously said that settling arrears will help elevate the country’s credit standing, but a series of external shocks and policy missteps have impeded the process.



When considering Zimbabwe’s tremendous financing needs, the $7m – ZWL$125m at the current 25:1 fixed exchange rate with the greenback – is but a drop in the proverbial bucket and falls at the lower end of what the IMF and World Bank have afforded other African nations.



Although any bit of aid will help at this stage, Zimbabwe’s problems are far from over and it will need more assistance going forward.



NKC’s analysis shows that Zimbabwe will be among the continent’s main economic laggards this year, joining the ranks of oil producing nations which have arguably been the hardest hit by the global pandemic.



Simply put, Zimbabwe’s economy will suffer a very deep contraction in 2020, akin to levels last seen over a decade ago.



That said, conditions can only deteriorate so far and serious intervention will need to take place at some point.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

Zimbabwe tightens coronavirus lockdown in capital Harare as cases hit 203

Op-Ed: World Bank opens its purse to Zimbabwe, but hands out pennies

By Emma Rumney



JOHANNESBURG (Reuters) – The expansion of South Africa’s auto industry is central to the government’s economic development strategy but the coronavirus crisis has forced carmakers into survival mode and could push ambitious growth plans out of reach.



Industry officials say the government needs to defer some tax payments for the auto industry and relax the criteria for investment incentives and allowances, or the pandemic could deal the sector a permanent blow.



Before the crisis, the government had crafted a plan to supercharge the sector to help revive the country’s struggling economy and form a beachhead for expansion within Africa, the world’s last major untapped market for new cars. [nL8N21S590]



But a five-week lockdown has brought a manufacturing and retail industry that accounts for almost 7% of South Africa’s gross domestic product and 30% of its manufacturing output to a virtual standstill.



“Those plans will be impacted massively,” said Mike Mabasa, chief executive of the National Association of Automobile Manufacturers of South Africa (NAAMSA). “Particularly for the short to medium term, that plan is completely out of the window.”



South Africa has put its so-called automotive masterplan at the heart of attempts to revive growth through industrialisation after years of stagnation and to bring unemployment down from almost 30%.



The plan aims to boost growth and create jobs by more than doubling the industry’s annual production to 1.4 million vehicles by 2035 and raising the proportion of auto components made locally to 60% from 39%.



The new scheme comes after a series of auto industry development plans and will be supported by investment and tax incentives that have been in place in some form for years.



They include a tax-free cash grant starting at 20% of the value of qualifying investments, rising to 25% for component makers, and a tax perk related to vehicle production, known as the vehicle assembly allowance.



SCANT RESPONSE



Mabasa said NAAMSA has asked the government to relax the minimum plant production capacity threshold of 50,000 cars a year needed for the investment incentive as carmakers believe it’s too stringent given the fallout from the crisis.



As part of series of requests on behalf of the industry, NAAMSA has also asked the government to use 2019 production numbers and targets for 2020’s vehicle assembly allowance, as output is likely to take a major hit this year.



The sector had some relief with the easing of the country’s lockdown on May 1 as it allowed auto manufacturers to return to 50% capacity. But it has had scant response from the government to its calls for specific financial help, besides requests for more information.



The Department of Trade and Industry did not respond to requests for comment.



Most of South Africa’s automakers referred Reuters to NAAMSA for comment.



NAAMSA represents 41 firms – including BMW, Ford, Mercedes-Benz, Isuzu, Nissan, Toyota and Volkswagen &lt;VOWG_p.DE&gt; – which make some 600,000 vehicles a year in South Africa and export about 65% of them.



Mercedes-Benz South Africa said it was not possible to predict the impact of COVID-19 on the 2035 industry targets.



“We have constructive relationships with our key stakeholders in suppliers and the government, and are confident that we will be able to find solutions to maintain the competitiveness of the automotive manufacturing sector,” its corporate affairs manager, Thato Mntambo, told Reuters.



SMALL FIRMS VULNERABLE



NAAMSA’s Mabasa warned that if carmakers struggle for liquidity in the crisis they may be unable to fulfil export orders, worth $9 billion a year across the industry. Local component makers focused on autos could also suffer badly.



Industry officials said the damage could be permanent and open the way for upcoming rivals such as Morocco and more established centres like Thailand to steal market share.



Andrew Kirby, chief executive of Toyota South Africa, said last month that the risk to the country’s role in global auto industry supply chains stemmed mostly from the vulnerability of its smaller component manufacturers.



If either vehicle makers or parts manufacturers cannot deliver their products, international customers will rapidly take their business elsewhere, industry officials said.



Renai Moothilal, executive director of the National Association of Automotive Component and Allied Manufacturers, said there was a strong possibility smaller firms would not survive and that would be disastrous for the government’s drive to boost local output and double employment in the sector.



He said levers the government could pull included levy waivers and support for utility and wage bills, but without help it was not hard to see how an industry that has already lost much of its business case might contract rather than expand.



“Once global companies move export contracts, and invest in tools of production in another destination, the costs sunk into that move make it improbable that they would want to bring it back to South Africa,” Moothilal said.



HITTING RESET BUTTON



NAAMSA’s Mabasa said the overseas headquarters of some local component manufacturers had already indicated they could shift production to divisions outside South Africa.



About 90% of the business of one local supplier, SP Metal Forgings (SPF), is in the automotive sector. Chief executive Ken Manners said the initial three-week lockdown alone had probably cost it 12% to 15% of annual turnover.



Another local component supplier, Pressure Die Castings (PDC), said it was expecting to lose 15% of its turnover for at least three months from the start of the lockdown.



“If we were only in (auto) manufacturing, we probably would have closed the company,” said Graham Smith, managing director of PDC, which supplies components to several industries.



The car sector will benefit from some economy-wide tax measures already announced, such as deferred payments on a carbon tax, but the demands on South Africa’s strained public finances are huge, with many key industries in trouble.



With the country’s debt rating now firmly in junk territory and an economic contraction inevitable, there are questions over how it will even pay for measures already announced.



Meanwhile, the risk of a return to a more expansive lockdown looms and demand for vehicles at home and abroad has plummeted.



IHS Markit senior analyst Walt Madeira said car production will fall too. It forecasts global light vehicle sales will drop to 69.6 million units this year from 89.7 million in 2019, with a 20% decline in South Africa. (https://tmsnrt.rs/2WbOIfb)



And any change of tack by carmakers at the top of the production pyramid will ripple through the industry.



“It’s like pushing a big reset button and nobody is quite sure what that means,” SPF’s Manners said. “It’s very worrying in terms of what our businesses are going to look like in six months.”



(Reporting by Emma Rumney; Editing by David Clarke)



This article was first published on Sharenet <a href="https://www.sharenet.co.za/views/views-article.php?views-article=414382">https://www.sharenet.co.za/views/views-article.php?views-article=414382</a> and is republished with its permission.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

SA’s auto industry ambitions threatened by COVID-19

By Peter Armitage, Anchor Capital CEO/Liam Hechter, Anchor Fund Management



Recent weeks have been dominated by investors asking us where the best investment opportunities are in the aftermath of the global market collapse. Below, we review the asset classes across major geographies, with a focus on equities.



Introduction



There are a few principles which we apply and assumptions that we make in our assessment of global and local assets. First, we assume that the world will revert to normality, although we have no idea when this will happen. At Berkshire Hathaway’s annual general meeting on Saturday (2 May), billionaire investor and Berkshire CEO Warren Buffett referred to the current period of volatility as “an interruption of growth”. The world will revert to growth. However, we are actively avoiding those assets where a longer-than-expected reversion to normality can materially and permanently damage the business. We are also avoiding areas of high risk – there is no need to assume a big risk when investment opportunities abound. There is also great merit in being patient – if you have money to invest you have time on your hands. We are not getting overly anxious when markets decline – this presents opportunities but be prepared to act. We are not getting FOMO when markets rise, and we are not fully invested – volatility will prevail for some time to come. So, also be prepared to sit on your hands, when necessary.



From a global perspective, first we highlight that low-risk assets generate no, or even a negative, return. Global developed market (DM) bond rates are basically at zero to negative and cash in the bank erodes in nominal terms. If you do not allocate some cash to riskier assets (such as property and equities), your wealth will erode in real terms. This scenario will prevail for a long time to come and interest rates simply cannot rise.



So, when and how do you invest in equities and property globally?



The first point to make is that the change in environment has impacted sectors and companies very differently – this is not a time for index investment. Oil, cars, pigs and sugar (for example) are in a big surplus so, while some companies have seen their turnover head to zero, the environment has been very positive for others. Amazon’s 1Q20 revenue, for example, was up a remarkable 26% YoY.



Nevertheless, some caution is warranted in global equity investment. There will be a lot of money to be made in these conditions, but timing is important. March 2020 was one of the worst months ever on global markets, but April saw a big bounce back – the best in the past 33 years. The bottom line is that, YTD, the MSCI World Index is down by 12% up to the end of April (with the S&amp;P 500 index down only 9% YTD), which many would consider a far better-than-expected outcome, after the height of the novel coronavirus (CV-19) fears a month or two ago. We believe global equity markets started the year in fully valued territory and, at an index level, with prospects now far worse, markets as a whole are certainly not in value territory. Earnings in 2020 will be under immense pressure and 2021 looks uncertain. Great businesses will rebound to normality in 2021, but some of this is already factored into share prices.



Everyone we speak to both in South Africa (SA) and in the UK have been caught off guard, with the overwhelming majority of those people expecting equities to go lower from here. We note the following:



<ul class="wp-block-list"><li>“no one” is buying the bear market rally.</li><li>US Federal Reserve (Fed) Chair Jerome Powell is pouring cold water on the hopes of a V-shaped recovery by stating that there is “… considerable risks to the economic outlook over the medium term.”</li><li>30mn people in the US are now “unemployed”.</li></ul>



So, how do we play global equity markets?



<ul class="wp-block-list"><li>Do not sell your long-term growth companies.</li><li>In our funds we remain focussed on buying great companies at good prices and these opportunities are presenting themselves. We are excited by these opportunities and we await further pullbacks to increase our exposure.</li><li>Certain sectors of the market will benefit from the events of the past two months and their long-term drivers and trends will be strengthened.</li><li>Among our top holdings are: The Walt Disney Company, Yum! Brands, Nike, Prudential, Unilever, Admiral Group, ICICI Bank, GlaxoSmithKline, Amazon, Ping An Insurance, Johnson &amp; Johnson, PayPal, Royal Dutch Shell and Alphabet.</li></ul>



A recovery portfolio



There are numerous share-specific opportunities which present themselves with the prospects of their share prices rising by 25%-50% in the next 12-18 months. Anchor has been running a “Recovery Portfolio”, which adds to, instead of replacing, a core long-term growth portfolio. The recovery portfolio is dominated by high-quality companies with great track records whose share prices have been hammered. Among these are: JP Morgan, Hasbro, Starbucks, McDonald’s, Paychex, Stryker, Sysco, Leggett &amp; Platt and Ulta Beauty.



So, in global equity markets, there are some great individual opportunities, but our base-case view is that better opportunities might still present themselves and we want to make sure we have cash available to take advantage of these.



Property



Global property is an interesting equation. Many tenants are not paying rent (especially in retail) and people are questioning whether the same amount of office space will be required after the lockdown experience. Global listed property shares have acted similarly to global equities and are down around 20%. The issue with property companies is that, generally, high levels of gearing mean that prolonged periods of reduced turnover can have a significant negative impact on net asset value (NAV) per share. Diversified listed property companies might well be a good way to play a recovery, but it should be restricted to quality plays.



Anchor has significant intellectual capital in the property space, and we are very excited about property over the next few years, especially given what is happening to capital prices. In the physical property space, there is blood on the streets, and it will get worse. Yet property has a powerful role to play in a diversified portfolio – strong, predictable, compounding and growing cash flows are available with the right tenant and leases. While listed shares might be a good way to play the recovery, we believe the direct market will be particularly attractive. The Anchor Tenant team is identifying such opportunities and will present global and local opportunities to investors over the coming months.



Moving to the local market …



SA is in a very different space to developed markets (DMs) where investors can earn a very attractive real return by investing in income and bond products. This means one can be even more patient with equity investment.



The SA market, as measured by the Capped Swix Index, bounced back by 14% in April and for the year to end April the index is down 16%. The direction in SA markets is likely to follow global markets and the rand is expected to weaken if global markets weaken and vice versa. When the world is more comfortable that normality will return in a reasonable timeframe, emerging markets (EMs) are likely to outperform DMs and the rand has the potential to recover materially. It is important to look below the index level and understand the non-SA Inc. shares that have recovered, as opposed to the SA shares. This is not surprising, as the price of many of these shares is set internationally and they have been dragged higher by their international strings.



The SA economy is only one part of the equation



It is vital to remember that, when we talk about the SA market, there is a portion that is sensitive to SA economics and a portion that is not impacted (consider Naspers, British American Tobacco [BTI], Richemont, BHP Billiton, Quilter etc.). In our equity fund, only 26% of our holdings are sensitive to the SA recovery and, despite SA’s poor short-term outlook, we have retained these because they are trading at once-in-a-decade valuations. SA banks and insurance companies are strong, and it appears that more than the worst case is already factored into many of these companies’ share prices.



MTN is an example of a share which we believe has more than 50% upside potential. Mobile telecommunications has been strong sector internationally this year and Vodacom is up for the year. MTN has fallen sharply, largely because of its Nigerian exposure (27% of profits). This contribution will fall, but we still expect it to be positive, and Nigeria is now being valued at zero in the MTN share price



April’s winners



The past month on the JSE was characterised by extreme volatility in those sectors with the highest degrees of operational risk brought on by CV-19 (read SA cyclicals), which, through their volatility continued to disappoint. The winners were more of the same from those sectors that have provided much of the performance contribution of the index over the past 18 months:



<ul class="wp-block-list"><li>Naspers/Prosus (a 2% contribution to the index);</li><li>PGM (2.2%);</li><li>Gold (2%); and</li><li>British American Tobacco (1%).</li></ul>



While we focus on long-term investment in our philosophy, the current volatility and pricing of shares is presenting us with shorter-term opportunities.



In SA equity, our actions have been to increase the defensiveness of the portfolio. This is done by reducing our exposure to those companies with weak balance sheets, which are not yet fully reflected in the share price, and those businesses which face immediate threats to their existence and, where we can, by increasing our exposure to those leading franchises that should emerge from this crisis in a better shape – or at least where we are confident that they will emerge. An interesting observation globally in the March sell-off and the subsequent April rebound was that value tended to underperform growth. As part of our strategy, we think this multi-year growth trend of outperforming value is likely to persist, although we do not manage factors that simplistically at a portfolio level. In the last few sessions in April, we started to see some buying coming in for those names that had been severely sold off over the past six weeks, the more cyclical sectors, with growth underperforming.



Anchor’s buys and sells in April



In the Anchor BCI Equity Fund we were net sellers of The Foschini Group, Nedbank, Bidvest, Home Depot and Discovery. We were net buyers of Growthpoint, FirstRand, Old Mutual, Quilter Plc and Sibanye Stillwater.



The underperformance of the SA economy has resulted in a continued narrowing of the local investible universe, with the index becoming increasingly concentrated to a small number of large caps, mostly exporter/rand-hedge type stocks. In the short term, it is unlikely that this trend will break. However, it is likely that, over the medium term, the underperformance of domestic companies will reach an inflection point and they will return to growth once more – its human nature to extrapolate a negative trend into perpetuity, but it seldom works out that way.



Other EMs



As we look across global markets it is interesting to consider some EMs:



<ul class="wp-block-list"><li>SA (like India), could probably loosen the grip on its lockdown measures in order to save a vulnerable economy. The second-order impacts of the continued lockdown will likely be far worse than the damage caused by the virus itself. We expect positive surprises on this front, with the lockdown likely being softened to allow more businesses to open.</li><li>China: We expect China to keep chugging along, despite the structure of its economy being very different to 2008/2009, so we anticipate the policy response needed to reflect that. Looser monetary conditions should be front and centre. However, the relationship with its biggest trading partner (the US) is rapidly deteriorating and this trend is unlikely to stop anytime soon.</li><li>Brazil: As a country this is not in a great place. Going into the pandemic, Brazil was the big reform story of 2020. However, that has unravelled in dramatic fashion, with political and social unrest due to the country’s right-wing President Jair Bolsonaro’s handling of the crisis. The oil price crashing is also not helping Brazil’s fiscal situation</li><li>Russia will be ok. Going into the oil market collapse the country had been building reserves for all of 5 years. Russia also has no external debt and is running twin surpluses. It is difficult to find a stronger balance sheet from a major economy. The oil price collapse is not good for the country as its biggest export commodity, so Russia will go into a recession but we note that the government has more than enough money at its disposal to stimulate fiscally ($500bn in excess reserves for a start). And, we believe that the oil market will eventually rebalance and find a level higher than where it is now.</li><li>India also has significant social unrest due to the government’s handling of the virus. Like SA, the criticism has been directed at the economic sacrifice brought about by government’s lockdown measures. In our view, it will suffer a recession this year, but India’s banks are in far better shape than a few years ago.</li></ul>



Above all else we need to remember that the world will reopen, life will get back to some form of normality, Super Rugby will return, everything will be OK – the world is just going to have to figure out how to cope with all the extra debt.

Op-Ed: Supporting the ICT sector in Africa as a cure for the economic crisis

Op-Ed: Anchor Capital on how to make money out of equities in the aftermath of the global market collapse

By Miyelani Mkhabela



The COVID-19 crisis is disrupting supply and demand at the same time, with severe financial consequences. To not only survive the crisis but also rebound swiftly, companies must protect their liquidity position and focus on their core competencies and businesses



Leaders can better prepare for the next shock by observing lessons emerging from the current crisis. Shutting down was hard, but opening up is going to be harder. Your workers are always your most valuable asset and it’s not the best times to lose them during the crisis, as rebuilding your operations is going to be even more difficult, you want to maintain your ability to rehire your best workers when the world is open for business again.



&nbsp;Statistics South Africa reported that Four in ten businesses feel that they cannot continue to operate: When asked about financial resources, 42,2% of respondents indicated that they are not confident that they have the financial resources to continue operating through the COVID-19 outbreak and 54,0% of respondents indicated that they can survive without turnover between one to three months. The doors of Tourism &amp; Hospitality; Sports; education, Retail; Entertainment are closed while manufacturing; Mining; Cargo and Logistics will also suffer in 2020.Small businesses based on their investments cannot manage the complexity of Covid19; large corporates are also struggling, yet risk can be minimized.



To set the scene, large numbers of small businesses have shut down and laid off huge numbers of workers; most are extremely cash strapped. The majority think they will be able to reopen by the end of 2020, but others are less certain. Small businesses disagree, a lot, about how long the crisis will last. Small businesses needs business continuity management, adaptation to technology and talent retention



&nbsp;It will be years before we fully comprehend the economic impact of the coronavirus, but one thing is painfully clear right now: Small businesses across South Africa and the rest of Africa markets are facing an existential threat. It will get a lot worse before it gets better for the African continent.



Here are a few tips for survival:



1. Carefully the prospective impacts of government plans to help small and medium enterprises (SME).



2. Help the business by deciding how to work with customers.



3. Regularly reassess credit worthiness: companies should continuously monitor the financial health of all but the safest customers.



4. Strictly monitor supply inventory through support functions to assess the cost of supplies and support functions that have access to a digital marketplace.



5. Recommendations to business on how to adjust the product offering. Companies should aim to deliver fast-selling products to priority customers for as long as possible, but they should also assess their product offering.



6.&nbsp; Investment and credit will be attractive



7. Adoption of an active operations management systems



8.&nbsp; Figure out how the needs of your customers needs have changed.



9. Don’t rush your decisions, but do make plans.



Finally, this is a time to be more client centred. Small businesses are highly required to meet customer expectations or satisfactory levels, while operating virtually has many disadvantages and misunderstandings, however, client’s service delivery standards still needs to be achieved. Generosity during a crisis can make a relationship far stronger. Small businesses are facing unprecedented struggles, and banks and policymakers must step up to help SME&#8217;s.



Miyelani Mkhabela is an Executive Director of Antswisa Transaction Advisory Services.

miyelani mkhabela

Nine ways you can try to save your small business post COVID-19.

&nbsp;By Peter Burdin



Fake news and scams have risen dramatically since the outbreak of the Coronavirus. As the number of Coronavirus deaths increases every day around the world – so has the number of conspiracy theorists and hoaxers seeking to use social media to exploit or profit from this terrible crisis.



Populations desperate for news and potential vaccines have clicked their way into a minefield of lies, false information and deliberately malicious posts designed to undermine society’s best efforts for whatever reason.



This deepening addiction to “hearsay” or “gists”, as Nigerians would say, has been mounting rapidly in Africa in recent years as the power of social media grows. And these weeks of lock down and national emergencies have created an eager audience keen to share the latest rumours.



In many ways we’re facing a fake news pandemic which festers alongside the global health pandemic and feeds off it.&nbsp; And it’s also costing thousands of lives.



Now so much fake news activity has switched onto WhatsApp it’s increasingly easy to share and difficult to track or pin down the source of this misinformation. To make matters worse, it is often deliberately undermining government actions for political gain, or for profit by spreading fear and trashing commercial rivals.



According to Kroll’s annual fraud report some 84% of businesses feel threatened by fake news about their products. It’s particularly worrying for African businesses where the practice of targeted misinformation designed to harm a company’s reputation has been more acutely weaponised than on any other continent.



In South Africa, fake news went viral that a company’s covid-19 testing swabs were infected and were being used to spread the virus. That was quickly debunked by the Eastern Cape Health Department but how much damage had already been done to that company’s reputation. And how many people will believe it and refuse to be tested in the future?



There are also widely-shared posts claiming that African people are being used as guinea pigs to test a new Coronavirus vaccine. Such claims are false – there is no vaccine for Covid-19 and only a few tests are taking place, and none of them in Africa.



The danger is sometimes people want to believe this kind of misinformation and it goes viral – and without proper counter measures the damage is lasting. Bad reputations are easy to get but hard to shake off – and in the corporate world that can be the difference between prospering and bankruptcy.



The global pandemic has presented opportunities for criminals. A group of scammers in Nigeria have tried to profit from the desperate shortage of protective face-masks. They’ve been exposed for trying to sell hundreds of thousands of them online – the only problem is they don’t actually have any masks, they only want to take your money and run. Apparently people have lost millions already to these online tricksters.



Corporate entities across the world are familiar with the impact of fake news, with many firms being damaged by misinformation.&nbsp; A prominent case in Nigeria was an attempt to hit the Nigerian Immigration Service and Contec Global, a multi-sector technology and sustainability firm which assists the Nigerian government to deliver its resident permits and process fees. Fake News was spread that the fees for the permits were to be increased without approval, almost certainly generated by individuals or companies who felt they would be disadvantaged by any increase.



Facebook has attempted to tackle such attacks by going local in their fact checking efforts. Their third party fact-checking program in partnership with Africa Check, an independent fact-checking organisation has expanded into Yoruba, Igbo and Hausa in Nigeria, Afrikaans, isiZulu, Setswana, Sotho, Northern Sotho and Southern Ndebele in South Africa, Swahili in Kenya and Wolof in Senegal. It is technology firms like Contec Global and Facebook that are well placed to provide successful solutions for turning the tide against this flood of fake news.



At this time of this global pandemic, it’s understandable that people are desperate for news, however, it’s important that people learn to distinguish between what is true and what is an attempt to deceive, frighten or profit from their anguish. Frankly it’s not always easy to tell the difference.



We need more honest journalism in Africa that audiences can trust to help create a healthier media environment and provide concrete tools to identify fakery and demand greater transparency.



We can all start by remembering the proverb: “If it sounds too good to be true – it probably is.” &nbsp;



Peter Burdin, is a former BBC Africa Bureau Chief

Clarification on COVID-19 “hotspots” as SA moves to level 3 lockdown

COVID-19: Opinion – Fear the fake news that spreads like wildfire and hurts us all

By John Kufuor*



Africa entered this century with great expectations.&nbsp;Its entrepreneurial and political ambitions were growing.&nbsp; The international community was coalescing behind a new agenda of cooperation crystallised in the Sustainable Development Goals and the Paris Climate Agreement.&nbsp;&nbsp;&nbsp;&nbsp;



Unfortunately, with its profound health and economic challenges, the COVID-19 pandemic has created an immense barricade to these ambitions. Fulfilling Africa&#8217;s future agenda will require us to change the values our societies place on knowledge and expertise and the way we communicate and interact with one another.



<a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.imperial.ac.uk_mrc-2Dglobal-2Dinfectious-2Ddisease-2Danalysis_covid-2D19_report-2D12-2Dglobal-2Dimpact-2Dcovid-2D19_&amp;d=DwMGaQ&amp;c=Ftw_YSVcGmqQBvrGwAZugGylNRkk-uER0-5bY94tjsc&amp;r=nx5b5kQLh41L8aL5r707mggTtSJQGyFCjkhVHxltaQg&amp;m=rmVUgP3ixI1b2SPHflH64bR6d_tJYgnPDXKIBjb5Fw4&amp;s=jRGVcKA_rJSs1bixVgpr_pnye5BjhwlugV9uKH0rEx8&amp;e=">Imperial College UK</a> analysis suggests there could be 40 million deaths worldwide from COVID-19 without mitigation and suppression measures. It predicts that some of the worst consequences of COVID-19 will be felt in lower-income countries.   Neither cure nor vaccine currently exist.  Protecting both life and livelihood will depend on how societies adapt and change.  Akinwumi Adesina, the President of the <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.afdb.org_en_news-2Dand-2Devents_opinion-2Dpandemic-2Dno-2Dtime-2Dfiscal-2Ddistancing-2D35086&amp;d=DwMGaQ&amp;c=Ftw_YSVcGmqQBvrGwAZugGylNRkk-uER0-5bY94tjsc&amp;r=nx5b5kQLh41L8aL5r707mggTtSJQGyFCjkhVHxltaQg&amp;m=rmVUgP3ixI1b2SPHflH64bR6d_tJYgnPDXKIBjb5Fw4&amp;s=Ep6ZEm0f4-4md5XOXn4XHW8tQzCZ7B4o9WfzMRH8jZM&amp;e=">African Development Bank</a> estimates the virus could cost the continent a GDP loss of between US$22 billion and US$88 billion. 



The ability to avert the total collapse of Africa’s already fragile economies in the coming months will require intensive social distancing measures. However, we will only achieve the necessary behavioural change if people can trust the information they have access to.&nbsp; Our governments need to invest in trustworthy information and communication systems.&nbsp; This will not be easy, given the absence of a dynamic public interest media ecosystem which African citizens can turn to for trustworthy information.&nbsp;



By 2008, Ghana was home to an increasingly profitable private-sector driven media and communication sector. Liberalising media freedom and the opening up of the economy are among the proudest achievements of my eight-year presidency from 2001 to January 2009. Elsewhere across much of the continent, with the rise of promising economic development and an emergent independent media and telecommunication ecosystem, many African nations also began to embrace a new era of transparent and accountable governance.&nbsp;&nbsp;



However, of late regressive politics has taken hold of some countries, with ever more <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.mfwa.org_publication_freedom-2Dof-2Dexpression-2Dmonitor-2Dapril-2Djune-2D2019_&amp;d=DwMGaQ&amp;c=Ftw_YSVcGmqQBvrGwAZugGylNRkk-uER0-5bY94tjsc&amp;r=nx5b5kQLh41L8aL5r707mggTtSJQGyFCjkhVHxltaQg&amp;m=rmVUgP3ixI1b2SPHflH64bR6d_tJYgnPDXKIBjb5Fw4&amp;s=RZUU9stMX8V-_fvTZGfApUvgnveELyk465G7dpDGWaE&amp;e=">grim statistics</a> of journalists being killed or attacked. Independent media have been taken over by governments or factional actors. Altogether, we have made very little progress as a continent in reforming our state broadcasters into the kind of independent public service broadcasters that have been playing such a central role in informing people about the pandemic in countries, <a href="https://pressgazette.co.uk/coronavirus-leads-to-staggering-demand-for-trusted-tv-news/">such as the UK</a>.  



Across most of Africa, advertising has migrated wholesale from traditional broadcasters to new internet platforms and has undermined the financial viability of independent journalism.&nbsp; By comparison, online digital revenues across Africa are negligible, unlike old-fashioned media in industrialised countries where profitable digital operations are rapidly emerging.&nbsp;



These challenges were already serious; with the current crisis they have become existential. The <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__reutersinstitute.politics.ox.ac.uk_risj-2Dreview_what-2Dwill-2Dcoronavirus-2Dpandemic-2Dmean-2Dbusiness-2Dnews&amp;d=DwMGaQ&amp;c=Ftw_YSVcGmqQBvrGwAZugGylNRkk-uER0-5bY94tjsc&amp;r=nx5b5kQLh41L8aL5r707mggTtSJQGyFCjkhVHxltaQg&amp;m=rmVUgP3ixI1b2SPHflH64bR6d_tJYgnPDXKIBjb5Fw4&amp;s=F3F0f3xznWDSjeJFzksFY2QqS7rAenlnlHJ5HZgcMWw&amp;e=">Reuters Institute for the Study of Journalism</a> estimates that news organisations worldwide could lose more than US$20 billion through the decline in revenues brought about by the COVID-19 crisis.&nbsp; Throughout Africa, there are burgeoning reports from independent media organisations of revenues in precipitous decline.



COVID-19 is, as Dr Ghebreyesus, Director General of the World Health Organization, terms it, an “infodemic,” characterised by misinformation that can cripple the public response.&nbsp; But just as public demand and the need for trustworthy information is skyrocketing, the capacity to supply that information has never been more endangered.&nbsp;&nbsp;Moreover, the role of the media in a crisis like this is not just to inform; but hold governments to account for the effectiveness of their responses.



Well before COVID-19, I was arguing that Africa needs a clear, determined strategy to support public interest media.&nbsp; The pandemic illustrates the need more than ever.&nbsp; Thankfully, work is well under way on two potential solutions.



The first is the <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__luminategroup.com_ifpim&amp;d=DwMGaQ&amp;c=Ftw_YSVcGmqQBvrGwAZugGylNRkk-uER0-5bY94tjsc&amp;r=nx5b5kQLh41L8aL5r707mggTtSJQGyFCjkhVHxltaQg&amp;m=rmVUgP3ixI1b2SPHflH64bR6d_tJYgnPDXKIBjb5Fw4&amp;s=pdBWzIaUglefKH4XQchCuTzNnrkaLnK7hn8NnptQsyE&amp;e=">International Fund for Public Interest Media</a>, designed to channel international development and other philanthropic resources to independent media in resource-poor settings. An in-depth feasibility study detailing how the fund would work has been developed by <a href="https://urldefense.proofpoint.com/v2/url?u=http-3A__www.bbcmediaaction.org&amp;d=DwMGaQ&amp;c=Ftw_YSVcGmqQBvrGwAZugGylNRkk-uER0-5bY94tjsc&amp;r=nx5b5kQLh41L8aL5r707mggTtSJQGyFCjkhVHxltaQg&amp;m=rmVUgP3ixI1b2SPHflH64bR6d_tJYgnPDXKIBjb5Fw4&amp;s=G8Td7BBlr37YJFkkCpePBkaCYp3hwRpwVuCQvmT7dks&amp;e=">BBC Media Action</a>, the BBC’s media support charity with the backing of the <a href="https://urldefense.proofpoint.com/v2/url?u=http-3A__www.luminategroup.com&amp;d=DwMGaQ&amp;c=Ftw_YSVcGmqQBvrGwAZugGylNRkk-uER0-5bY94tjsc&amp;r=nx5b5kQLh41L8aL5r707mggTtSJQGyFCjkhVHxltaQg&amp;m=rmVUgP3ixI1b2SPHflH64bR6d_tJYgnPDXKIBjb5Fw4&amp;s=nlkaQDSqbCfby8JyfaT9RJDs4KeY_pcnB534gwh15iY&amp;e=">Luminate Group</a>.



The second initiative is a new African Public Interest Media Initiative which is developing a scalable, digital business model that incentivises African-generated public interest entertainment content.



The drivers of the two initiatives are helping to coordinate an emergency response to mitigate the immediate impact of the COVID-19 crisis on an already struggling free media sector. I urge Africa’s political leadership to give credible backing to both initiatives in partnership with OECD nations and other philanthropic entities.



*John A. Kufuor, the President of Ghana between 2001 and 2009, is focused on advancing leadership, governance and development across Africa through the John A. Kufuor Foundation.

John Kufuor

Op-Ed – John Kufuor: Africa faces the triple jeopardy of health, economic and informational crises

By Moky Makura



&nbsp;You may have seen them; violent videos of black people being punched, kicked, trodden on and spat at. These images are being passed around on social media platforms on a phone near you.



The Nigerians, Egyptians, Malians, Ugandans, Kenyans and Congolese in Guangzhou, the manufacturing centre of China, are being discriminated against because of fears they might be spreading the Coronavirus. They are being thrown out of hotels and apartments, forced to undergo mandatory testing and compulsory quarantine, refused entry in to shops and left on the streets to fend for themselves – all in the name of Covid-19 containment policies aimed specifically at Africans.



Rightfully, these official acts of blatant discrimination are being highlighted and challenged in the greatest public court of all – Twitter and Facebook. Eventually, they were addressed by African ambassadors in Beijing who came together to send an official complaint to China’s foreign minister. Their protest should carry weight &#8211; there 100, 000 or so Chinese owned companies operating in Africa and an estimated 1 million Chinese people there. The incidents could also impact China’s soft power tactics in Africa, which has led to it becoming the continent’s most important economic and trading partner.



Although the connections between China and Africa run deep, covid-19 has unearthed old, persistent, harmful storylines about Africans and validated the negative narratives. These storylines continue to be a stark reminder that what we read, hear and see, shape our thinking and behaviour.&nbsp; Narrative matters and lingers.



Scan stories and commentary about Africa on social media and in global and African media outlets &#8211; it won’t take you long to see the prevailing sentiment is negative. The University of Southern California’s Media Impact Project analysed 700,000 hours of US entertainment and news and 1.6 million tweets in 2018.It confirmed that when references to Africa were not neutral, they were more likely to be negative.



In his book Factfulness, the Swedish academic and statistician Hans Rosling, wrote about the danger of selective media reporting which prioritizes the negative and often extreme sides of any story. Sadly, ‘if it bleeds it leads’ is still a principle in some newsrooms, especially during this pandemic.



We have allowed these negative and harmful storylines to define us as Africans – the belief that we are somehow ‘less than’ is not just an external message it is also permeating the minds and hearts of African youth.



The horrific stories of African migration, conflict, insecurity, poor governance, poverty and disease are true, but they are not all we are.



The truth is that most Africans are not on migrant boats to Europe. According to the UN refugee agency (UNHCR) the top three countries by origin of asylum seekers to the EU since 2014 are Syria, Iraq and Afghanistan.



Most Africans live under elected governments in relative peace, with only six out of 54 countries &#8211; Central African Republic, Democratic Republic of Congo (DRC), Libya, Nigeria, Somalia, South Sudan &#8211; considered hot spots of armed conflict.



And with the world’s help, Africa has made significant progress bringing poverty rates down; two out of three Africans live above the global poverty line. According to 2011 AfDB report, the continent has the fastest growing middleclass, expected to reach 42% of the population by 2060.



But these are just facts, data points; despite their importance they get lost in the narrative.&nbsp; As Rosling’s book and global studies reminds us, deeply held beliefs are not based on facts and data doesn’t matter when it comes to how people see the world.



And that’s why the stories we tell and those that are told about us have a cost. They inform the narrative, the resulting behaviour and the power dynamics. And right now, no one knows or feels the impact of this more viscerally than the Africans in Guangzhou.



The African proverb which speaks most directly to the power dynamic of narrative (for there is an African proverb for every situation) is this one: until lions learn to write hunters will tell their stories for them.



It’s time for us to shift the narrative and start writing our own story about this progressive and dynamic continent. We should be drawing attention to our African innovations, our history, culture, music, fashion, design, literature, art and film.



African storytellers should not forget that Africa brought the world coffee, Nelson Mandela, Afrobeats, Nollywood and Jollof Rice. We gave the world the last remaining wonder of the ancient world; the Pyramids of Giza, we are home to one of the world’s first universities, in Timbuktu, Mali. We are the largest supplier to the world of cocoa, platinum for cars, cobalt for batteries, manganese for steel and of course Gold.



Our musical pioneers from Fela Kuti, Youssou N&#8217;Dour, Salif Keita to&nbsp; Burna Boy, Cassper Nyovest, Sauti Sol and WhizKid; our writers; Ngugi wa Thiong’o, Chinua Achebe, Chimamanda Ngozi Adichie and our entertainers Trevor Noah, Lupita Nyongo, Idris Elba are just some of the icons that have helped redefine and shift the narrative about who we are.



What we need is for more lions to roar! Let’s shift that costly and harmful narrative about Africa &#8211; one story at a time, if not for us, for our brothers and sisters in Guangzhou.



Moky Makura is the Executive Director of Africa No Filter working to shift African narratives by crowding in new, progressive stories about the continent.

image001

Let the lions roar and change the way the world sees Africa

By Dr Cobus Oosthuizen, Dean of Milpark Business School



In the <a href="https://www.cnbcafrica.com/covid-19/">COVID-19 era</a>, everything must be seen through the lens of the pandemic. This is crucial, and it is immediately important that we make the interventions needed to mitigate the spread of the virus and to save as many people as possible.



However, the powerful solidarity that has emerged during the coronavirus response also holds great lessons for our ability not just to save ourselves from disease but to achieve lasting social and environmental change. &nbsp;



The United Nations Sustainable Development Goals (SDGs) provide a blueprint for doing just that, and one has to resist the temptation to put these very critical global priorities on the backburner.



Progress has been made since 2015, when the goals were conceptualised. We&#8217;ve seen some favourable trends – extreme poverty has declined considerably and immunisations against disease have increased. More people have access to electricity.



Many more countries are taking real action to protect our planet and ensure the sustainability of economic activity. National policies have been developed to manage rapid urbanization.



Notwithstanding this progress, there are many areas that still require urgent action. The environment continues to deteriorate at an alarming rate. Climate change is a fact of life, along with rising sea levels and ocean acidity. We&#8217;ve seen some of the highest atmospheric temperatures on record. Land degradation remains a concern.



We are moving far too slowly in addressing many of these challenges, towards ending human suffering and creating opportunities for everyone on our planet.



Unfortunately, our ability to respond to issues such as extreme poverty by the SDG deadline of 2030 is jeopardised by other geopolitical events.



Violent conflicts, natural disasters, and the current pandemic demand our attention, and again lead the critical matter of human development to fall from the radar.



There are indications that global hunger is again on the rise. Half of the global populace lacks essential health services. Many millions of children have yet to achieve necessary standards of reading and intellectual development.



It&#8217;s absolutely clear that deeper, faster and more ambitious responses are needed to unlock the sustainable social and economic upliftment of our planet.



One can approach this from five different strata. At the international level, such as at the United Nations, where initiatives like the SDGs are being driven, much can be done to educate and secure funding.



At the macro, or national level, policy can also be shaped to bring the SDGs closer to fruition. South Africa’s National Development Plan is a good example of this.



At the mezzo, or organisational level, much can be achieved, whether through public, private, large, small, listed, unlisted, for-profit or non-profit operations.



At the micro level, the SDGs can find expression as solid management practice within departments and divisions.



Then of course, at the nano level, we find the individual, with the agency and power to influence others. &nbsp;



As an education professional, I am fortunate to have exposure at all five of these strata. I am a firm believer in the practical application of knowledge. Often, only when one is confronted with facts does one appreciate the urgency of action. But information can also inform our ability to make a difference.



The rich online resources around the SDGs can be pulled into classroom debates, and discussions, and we can also influence individuals. Students are the agents of change that can shift social behaviour and help us achieve these goals.



At the board level, where some of this change agents already find themselves, the SDGs need to become part of the strategic dialogue, and then cascaded down all the way to the micro and nano level.



For government, too, it is possible to bring a message through all these levels to where it can materially change human behaviour. We see this in action with the rapid, positive behaviour shifts achieved during the lockdown period.



The SDGs, which also pertain to human survival on this planet, are no less important, even if their time frames are longer. Their values should also be emphasised, reinforced and inculcated into all of our people.



In the education space, there is still much room to integrate the well-thought-out aims of the SDGs into the curriculae of commerce faculties, business studies, management sciences and so forth.



For the goals to be achieved, it is important that we internalise them and make them our own. At the same time, collective action is required, but it must all start with awareness at the micro and nano levels.



Families are the building blocks of society, and it is also important that we teach the global values of the SDGs to our children and make them a family touchpoint.



The principle of the common good has enormous currency during these pandemic times, but in the longer term, it must also inform the very foundations of society. We should come together, not just to save ourselves, but to make life better for all.

The business book billionaire Bill Gates wants you to read right now

Op-Ed: Why despite COVID-19, Africa cannot lose sight of  the sustainable development goals

By Maram Ahmed, Senior Fellow at the School of Oriental and African Studies, University of London



In Africa, humanitarian needs are quickly outpacing funding available.



If current trends continue, humanitarian assistance costs are forecasted to rise to $50 billion by 2030. And by then, more than 80% of the world’s poor will live in areas that are conflict-affected and deemed fragile, according to the Organisation for Economic Co-operation and Development (OECD).&nbsp;



The funding shortfall comes at a time when there is a rise in natural disasters, climate-induced humanitarian problems and conflicts are becoming more complex and protracted.



Also, the rapid spread of COVID-19 not only threatens people and communities across the globe but could compound existing vulnerability in fragile places in an unprecedented manner.



READ: <a href="https://www.cnbcafrica.com/insights/energy-environment/2019/10/07/op-ed-how-green-sukuk-could-help-africa-fight-fund-climate-change/">Op-Ed: How green sukuk could help Africa fight &amp; fund climate change</a>



As humanitarian contexts rapidly change and the funding gap widens, organisations must push forward to diversify their funding sources.



Moving beyond traditional donors, innovative financial mechanisms have the potential to make a significant contribution to redressing funding shortfalls in the continent.



For example, in Kenya, faith-based financing, such as traditional tools of Islamic Finance, have been channeled for humanitarian purposes.



Instruments such as Zakat have been used to meet humanitarian needs.



Zakat is an annual donation made by Muslims consisting of 2.5% of one year’s cumulative wealth. Although a religious obligation, it is often perceived as a wealth purifier. Estimates of Zakat range from $232 billion to $560 billion per year, according to the Islamic Development Bank.



In 2018, the International Federation of the Red Cross and Red Crescent Societies (IFRC) mobilised Zakat funds raised in Malaysia to finance a drought assistance programme in the Kenyan county of Kitui.&nbsp;



$1.2 million worth of Zakat was used to help communities in Kitui to recover from climate-change induced drought by enhancing water and food security.



Innovative finance tools were also implemented to raise funding to build and operate physical rehabilitation centres in Mali, Nigeria and the Democratic Republic of Congo.



The International Committee of the Red Cross (ICRC) launched the first Humanitarian Impact Bond in 2017 raising 26 million Swiss francs to provide crucial services for people with disabilities such as rehabilitation.



The five-year bond is a first in the humanitarian sector and helped secure long-term funding from private impact investors for humanitarian projects.



Impact bonds are a type of results based financing that aims to reward service providers (such as the ICRC) for positive results.&nbsp;



Independent auditors will assess the efficiency of the ICRC’s operation of the rehabilitation centres. If the project is deemed a success, then the outcome funders pay back investors partially, in full or with a return &#8211; this is determined by pre-agreed outcomes. The outcome funders in this case are Western governments and foundations.



As humanitarian organizations struggle with the shortfall, these innovative financing models and others are testing tools for humanitarian actors to help plug the gap and create greater impact.



It was estimated that approximately $28.8 billion was needed to help respond to humanitarian crises this year – this was before the COVID-19 pandemic spread quickly. These figures will be much worse after the impact of the virus is felt.



Looking ahead, the economic hit of the coronavirus will inevitably mean government aid budgets and donations will dwindle.



So now more than ever there is an opportunity for humanitarian organizations to evolve their funding going beyond immediate relief to building resilience.&nbsp;

Op-Ed: How innovative financing can assist Africa’s humanitarian needs

By Akinwumi A. Adesina



We are in a battle against time to curb the COVID-19 pandemic. While tackling the Coronavirus pandemic has grabbed global attention, a new crisis that could claim a lot more lives is brewing in Africa: massive locust invasions.



Billions of desert locusts are ravaging countries all across East Africa, including Kenya, Somalia, Ethiopia, Sudan, South Sudan, Uganda, and Djibouti. It has been reported that their numbers are likely to increase by up to 400 times by June 2020, reaching crisis levels.



The Food and Agriculture Organization of the United Nations (FAO) has estimated that unless quickly controlled, 5 million additional people in East Africa will be hungry by June.



An unprecedented race against time has begun to urgently stop the progression and potentially devastating impact of the deadly twins: COVID-19 and the locusts for millions in Africa.



We all know that rains are good for crops. But then when good rains also caused favorable breeding environments for locusts, the joy of rains has suddenly turned hopes of expected plenty into glooms of hunger.&nbsp; Is the best of times becoming the worst of times?



Locust breeding populations have increased massively. The locust plague moves with devastating effects: imagine a carpet of locusts of up to 150 million locusts covering a square kilometer. And think about it, that they can consume crops in one day that can feed approximately 35,000 people. In East Africa, where FAO estimates that some 20 million people are already food insecure, the effects will be devastating.



The locust crisis emerges as the continent is dealing with the COVID-19 pandemic. These are tough odds to face.



Today, distressfully, choices for millions of the poor are oddly similar: to stay in confinement and escape dying from Coronavirus or dying from hunger staying at home.



It is already playing out. Food riots broke out a few days ago in Kibera, the largest slum in Kenya, as people trampled over each other, defying social distancing &#8211; prescribed to stem the spread of the Coronavirus &#8211; to get food. Coronavirus could kill, but hunger kills many more people.



With the lockdowns for the COVID-19 pandemic, pest control workers are largely unable to go out to spray. While restrictions have been lifted to allow aircrafts used to spray to operate, they can do little as they are largely unable to get access to the chemicals, due to disruption of supply chains.



It appears that those who escape the COVID-19 will soon face LOCUST-19. In East Africa alone, the number of hungry people could jump to 30 million people.



There are several lifesaving recommendations we can act on now. These include one, the creation of a &#8220;green channel&#8221; for the free flow of food and agricultural inputs and pesticides to control pest attacks. Two, putting in place measures to prevent food price hikes by releasing food from government grain reserves and implementing anti-hoarding policies. Three, rapidly scaling up food production technologies, including high-yielding, early-maturing, drought-tolerant, disease- and pest-resistant staple crops, and programs such as the African Development Bank’s flagship program, the Technologies for African Agricultural Transformation (TAAT) initiative.



The good news is that the African Development Bank has joined the FAO as the frontrunners in this unprecedented race against time. The Bank has just approved a $1.5 million grant to the Intergovernmental Authority on Development (IGAD) and the FAO to support efforts to spray against the locusts and safeguard livelihoods in the East and the Horn of Africa. More help will be needed.



The last thing Africa needs now, as we are battling with the COVID-19 pandemic, is a hunger pandemic.



COVID-19 has taken the international community on an unpredictable journey. Thankfully, we can preclude and halt the locust crisis. For that to happen, we all must rally around the FAO to provide the $153 million needed.



COVID-19 cannot be followed by LOCUST-19.



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

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