Agriculture has been an integral part of the human society, the most persisting productive human engagement across times and space. Globally, about 5 billion hectares are classified as agricultural land (comprising native as well as cultivated pasture). Of this figure, 25 percent is accounted for by the industrialized countries, an amount that at the global scale, has only little scope for expansion. Conversely, South, East and Southeast Asia account for only about 20 percent of the global agricultural land, while Sub-Saharan Africa accounts for about 18 percent. Global agricultural population is also reported to stand at around 2.6 billion people. In Africa, particularly, no less than half of the continent’s labour force is employed under agriculture, all pointing to the significance of agriculture as a sector in the human productive business and general development. Sadly, despite its contribution to the continent's development, agriculture in Africa suffers from a severe funding deficiency.

The Covid-19 pandemic occurred at a time when sovereign debt had already increased substantially in Sub-Saharan Africa (SSA). Between 2010-2017, government debt as a share of GDP averaged 34.5% in SSA but increased significantly to 51.5% in 2019 (IMF 2021a, p. 25). Similarly, in SSA, official external debt as a share of GDP averaged about 15% between 2010-2017 but rose substantially to 23.6% in 2019 (IMF 2021a, p. 27). One main reason behind these accumulated debt levels was a shift in the debt structure from concessional towards more non-concessional financing with relatively higher interest rates. Increased debt ser-vice payments diminished fiscal space in most SSA countries. Moreover, non-concessional financing includes private credit, such as Eurobond issuance. Another reason is the growing momentum to close the continent’s infrastructure deficit, which the African Development Bank (AfDB) has estimated will cost about US$130 to US$170 billion annually (AfDB 2019).

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The COVID-19 pandemic has had severe impacts on the macroeconomy and the livelihoods of households globally. The restrictions to movement alongside the associated uncertainty stimulated a sudden decline in the demand for commodities and disrupted production, leading to the underutilisation of capital and labour. More specifically, as governments sought to curb the spread of the virus by implementing workplace and school closures, and encouraging social-distancing practices, these policies led to a significant impact on all economies. A recent study on the impact of COVID-19 on gross domestic product (GDP) and trade finds that the pandemic caused a 2% decline in global GDP, a 2.5% decline in the GDP for developing countries, and a 1.8% for industrialised countries.

For Nigeria, which saw its first case in February 2020, the economic contraction was severe and sustained leading to a recession in the third quarter of 2020. The economic contraction is the result of the adoption of lockdown measures – which had an impact on nearly all sectors of the economy – along with the pandemic’s impact on partner economies engaged in international trade and those providing foreign investment. Meanwhile, the income of the majority of citizens has been affected, because a large share of informal workers has no recourse to unemployment insurance or paid leave of absence.

This article was first published on SAIIA

China’s investment in African infrastructure as part of its Belt and Road Initiative has proven to be both transformative and controversial. While investment projects are helping Africa to close its infrastructure gap, they have also raised fears of runaway debt levels. Overall, more research is needed on the development impact of Chinese investment activities on the continent, including the financial implications thereof. This report aims to address this knowledge gap. Drawing on diverse datasets, it examines Chinese infrastructure projects in three countries: Ethiopia, Kenya and Nigeria. A key result of the study is that while many of these projects are still under way, they are likely to have a positive impact in the future. In particular, they will boost trade and development in the commodities and services sectors. Nevertheless, the benefits of the Belt and Road Initiative will not be evenly distributed in Africa. Top commodity producers and exporters will continue to benefit more than some other African countries. Countries should take cognisance of and mitigate the downside risks associated with Chinese interventions in Africa, including growing their debt loads and minimising the negative effects on the environment.

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Affordable and efficient energy supply is essential for enhanced welfare and better development outcomes. However, African states suffer from huge deficits in energy generation and distribution, resulting in unreliable power networks, frequent power outages and expensive tariffs. In a bid to improve efficiencies through interconnectivity and reduce energy development challenges at the national level, sub-regional power pooling initiatives have become increasingly popular in Africa. The idea behind creating power pools is to encourage cooperation among countries, through linking excess capacity in one country where power is produced more economically, with excess demand in another country that can benefit from cheaper imports.

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