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COVID-19 & digital transformation – a silver lining for inclusive sustainable development in Africa (1)

The Africa Centres for Disease Control and Prevention (Africa CDC) on Wednesday 23 September 2020 stated that the number of confirmed COVID-19 positive cases across the African continent reached 1,420,629. According to their statement, the death toll related to the ongoing COVID-19 pandemic has risen to 34,327 so far. Currently, the primary concern for governments across the continent and globe include, fighting to see an end to the pandemic, increasing health care spending to ensure that medical supplies are available, and putting in place measures to flatten the curve. Beyond all these, there are severe economic consequences to this outbreak.

There have been several forecasts of a global downturn and there are high chances of countries experiencing recession and significantly lower growth than anticipated.

According to the World Bank Global Economic Outlook, “every region is subject to substantial growth downgrades. East Asia and the Pacific will grow by a scant 0.5 percent. South Asia will contract by 2.7 percent, Sub-Saharan Africa by 2.8 percent, Middle East and North Africa by 4.2 percent, Europe and Central Asia by 4.7 percent, and Latin America by 7.2 percent. These downturns are expected to reverse years of progress toward development goals and tip tens of millions of people back into extreme poverty”.

Following the restriction in movement and close down of businesses, it is important that the continent plans towards a smooth recovery after the pandemic has taken its toll.

Introduction

With over 32 million cases globally, the COVID-19 pandemic is disrupting supply chains and causing companies to be forward-thinking by embracing the digitalisation of their operations and the reorganise action of their business models to allow for adaptability and resilience in this challenging environment. The realignment of value chains, operations, and distribution networks is the new normal for driving efficiency in these unprecedented times. Countries, sectors and businesses have experienced decreased economic activities and unusual revenue and profit outcomes which have resulted in job losses and reduced staffing strength. The increasing spread of the virus and the isolation and quarantine requirements have made citizens rely more on online and digital services for food, shopping, schooling, remote work, and leisure.

Agriculture, trade and supply chain disruptions

On average, the trends and impact of COVID-19 will differ by sector and segment as some businesses will benefit greatly from these disruptions while others will struggle to stay afloat. Businesses in the consumer and industrial markets including African farmers have found themselves left with surplus perishable products due to travel restrictions and a drop-in demand as restaurants, markets, and food outlets have been closed. This is a long-term threat to food security as most cities have experienced artificial scarcity and a significant hike in the price of food and other staples. As a net importer of raw materials and finished goods, Africa’s agricultural sector has been impacted by the pandemic as the restrictions affected the import of raw materials, expertise labour and equipment. Although South Africa, Morocco and Egypt have sophisticated supply chains similar to those of developed countries, the rest of the continent is still trailing behind, due to weak infrastructure.

Unlike the agricultural sector, the e-commerce and telecommunication sectors have been experiencing a boom. Major ecommerce and online stores are barely able to keep products in stock on their online marketplace due to the increasing demand. Most ecommerce stores have had to employ more workers to be able meet up with increased customer demand. Communications service providers are also experiencing an increase in demand for their products to support remote working across all industries.

Corporations and companies are striving to adapt to current realities to ensure that they avoid finding themselves in a distressed situation. Overall, Covid-19 is straining capacities and resources and introducing new dynamics to normal business operations within the continent. The pandemic has succeeded in shortening supply chains across sectors and encouraging business owners and organisations to think of more innovative ways of digitalising their business process to not just scale operations but to survive in these trying times.

Corporate reorganisation and technology

Before this time, workers clamouring for remote work arrangements and flexible work hours from their employers have met stiff resistance. However, during this pandemic, workers have been encouraged or obliged to work from home if the nature of their job allows it. For most of these workers, it is their first time as “teleworkers” and their working environment is likely to be deficient in many aspects compared to their workplace. Employers have been forced to make adjustments to internal operations and invest in remote work infrastructure to accommodate the new work pattern for their staff such as providing personal work tools and the internet for each staff. With this level of independence, employers have also had to introduce digital tools for monitoring and supervising the tasks carried out by staff in all their different home locations. It is expected that this work pattern will become the new normal.

Other routine business operations have been digitised and a lot of transactions and operations have become paperless. Meetings have moved from physical board rooms to virtual platforms. Virtual meetings and remote working arrangements have significantly reduced commute time to and from work, which is time-saving and cost-efficient. With fewer reasons to have physical interactions with co-workers and customers, most business managers are questioning the need for their numerous offices, workspaces, and branches. Considering the cost of maintaining multiple or large office spaces, several companies are strategizing their businesses to function without these spaces, thereby reducing their operating costs and enabling them to survive better. Fewer office spaces would also mean fewer blue-collar office jobs which would ultimately result in a further reduction in operating expenses.

In order to meet their top line and help their communities, some business owners have diversified their product line to accommodate the production of essential health care commodities and personal protective equipment that they ordinarily would not produce. The shortage and dire need of these medical supplies have caused distilleries and breweries to produce hand sanitizers, car manufacturers to make face shields and ventilators, and garment manufacturers to produce face masks and hospital gowns.

Onukogu is a Commonwealth Scholar and an Economist. She is currently a Postgraduate Student (International Development) at the University of Portsmouth.

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