“The pandemic has shown us just how important it is to help small businesses in developing countries not just survive, but thrive,” Pamela Coke-Hamilton, Executive Director of the International Trade Center. COVID-19 and its lockdown restrictions significantly impacted Micro, Small, and Medium Enterprises (MSMEs) worldwide. Businesses had to lay off employees, halt their work, and even closed their doors due to lockdown restrictions. Supply chains were constrained, leading to a lack of access to markets which took a huge toll on micro and small businesses. While large firms were more resilient due to excess capital, small businesses have lower resilience because they usually lack cash reserves. Capital limitations are especially true for African small businesses that experience ‘access to finance’ challenges and have received little or no financial support from their governments during the pandemic.
Therefore, economic recovery efforts must consider micro and small businesses and make efforts to help these enterprises recover from the impact of COVID-19. While African countries recorded lower cases of COVID-19 than other countries during the height of the pandemic in 2020, new cases are now increasing across the continent. And access to COVID-19 vaccines could help slow the spread of the virus, enable a return to “normalcy,” and aid the recovery of African MSMEs.
Thus far, COVID-19 vaccines have played a significant role in helping economies worldwide recover. As people receive vaccines, they slow the spread of the virus so that countries can get back to life as we knew it before the pandemic hit. Unfortunately, African countries happen to be at the back of the line when it comes to vaccines supplies and distributions.
According to the Center for Disease Control (CDC), authorized COVID-19 vaccines are effective against COVID-19, including serious outcomes like severe disease, hospitalization, and death and are a critical prevention measure to help end the pandemic. Access to vaccines has substantial economic implications for the continent and its small businesses.
A World Bank report notes that economic recovery hinges on deepening reforms that create jobs and encourage investment, but a resurgence of the pandemic could make this an uphill battle. In 2020, African economies experienced a recession triggered by the disruption in trade and tourism, impact of lockdowns, and suspension of investments. Currently, the continent does not produce its own vaccines and relies on COVID diplomacy to access the vaccines. With the arrival of the third wave, access to vaccines will prove critical for Africa and the world. The world is a global village, and what starts as a third wave in Africa can affect the entire world, similar to how the first wave began in China in 2020 and spread across the globe.
With the emergence of the COVID-19 vaccines, coronavirus cases decreased worldwide before the Delta variant started to pick up. COVID-19 related deaths now are mainly linked to the unvaccinated. Most governments began vaccinating their populations against the virus while easing lockdown restrictions and slowly reopening their economies.
Access to COVID-19 Vaccines is Key Ending the Pandemic in Africa
In Africa, lockdowns are not an effective measure to mitigate the virus because of the considerable informality of most economies. Additionally, social safety measures to support the underprivileged in Africa are not readily available for citizens. Informal workers in sub-Saharan Africa represent 86 and 92 percent of men and women’s total employment and almost 9 in 10 young workers. In South Africa, for example, evidence suggested that lockdown was not an effective strategy against COVID-19. Mandating people to stay home when they must go out daily, to work, sell, and take care of their families is difficult to achieve. As a result, the COVID vaccines are Africa’s best bet on mitigating the spread of the virus and recovering economically.
In March 2021, the first batches of vaccines in Africa arrived as donations from China and India and even now, the United Nations and the Africa Center for Diseases Control have urged countries with surplus supplies to donate to more to African countries. The World Health Organization (WHO) advised that Africa needs 200 million doses to vaccinate 10% of its population by September 2021. Currently, less than 1% of the people in Africa have received COVID-19 vaccines.
To help ease Africa’s economic burdens post-pandemic, in mid-May, French President Emmanuel Macron welcomed two dozen African leaders and heads of the World Bank and International Monetary Fund (IMF) to an Africa summit in Paris on post-Covid-19 economic recovery. The summit concluded with participants agreeing that financial assistance should be made available for African countries and that vaccine rollout efforts needed to be increased. Surprisingly, participants primarily pushed for the reallocation of IMF special drawing rights (SDR) monetary reserves of $100 billion from rich nations to African states instead of COVID-19 vaccines.
Undoubtedly, most African countries will need economic aid to recover from the pandemic. The reallocation of SDR would be significant in assisting these countries to return to pre-pandemic economic growth. However, current emphasis should be placed entirely on COVID-19 vaccine supplies. Africa desperately needs to vaccinate its population. Otherwise, the continent, currently battling a third wave of the pandemic due to various COVID-19 variants, could further prolong its economic recovery while requiring enormous financial aid to resolve.
In essence, for Africa, equitable and urgent access to COVID vaccines will be pivotal in disrupting the third wave of the pandemic and ultimately eradicating the virus.
Global COVID-19 vaccine diplomatic efforts
Though developed countries are making efforts to provide vaccines to countries in Africa, the pledges and distribution pace have been alarmingly slow. Quickly delivering vaccines is crucial to curb the third wave on the continent, illustrating the ongoing difficulties confronting the global COVID-19 vaccine initiatives.
During a recent global health summit in Rome, Italy, pharmaceutical companies promised to deliver 1.3 billion doses of COVID-19 vaccines to low and middle-income countries over two years with the condition that most countries pay for the vaccines. But as long as economic problems loom in Africa, most nations will not have adequate funding to purchase enough COVID-19 vaccines, even if they sell them for relatively low prices.
Therefore, vaccine pledges from developed countries are crucial in resolving Africa’s vaccine’s woes. Yet, pledges have been infrequent, inconsistent, and far from sufficient as most advanced economies have either stocked up on vaccines for domestic use or focused on regional Covid crisis while disregarding low and middle-income countries on the African continent.
Take China, for instance, a global power that was expected to spearhead the COVID-19 vaccine diplomacy, which would have ultimately benefited African countries. But since the development of China’s COVID-19 vaccines—Sinovac and Sinopharm—China has only donated 18.5 million vaccine doses worldwide, with just 5.85 million going to African countries.
At the recent G7 summit, member nations attempting to fill the global vaccine gaps pledged about 1 billion doses to be distributed through the COVAX facility by the end of 2022. While commendable, the 2022 timeline for complete delivery does not depict urgency and could be too late to curb the coronavirus second wave erupting across Africa.
In addition to vaccine pledges, lifting patent protections for COVID-19 vaccines also received widespread support at the G7 summit. Lifting patent protections was identified as another means to boost global vaccine supplies and production, which could benefit poorer countries. But for Africa, this is a mid to long-term solution and does not promptly address the continent’s current vaccine needs since most African countries cannot presently manufacture vaccines on a large scale. Therefore, the ongoing discussions regarding lifting patent protections to increase COVID vaccine supplies for Africa, while important, are right now immaterial and do not provide what the continent currently needs to stop its third wave—urgent and mass delivery of COVID-19 vaccines.
Due to globalization, Africa’s economic and health prosperity and the rest of the world are inextricably linked. Hence, a protracted third wave will push the African continent further into despair. The supply of vaccines is going to be critical in fully vaccinating most people in Africa. More than 80% of the vaccine doses given out globally have been given to people in developed countries. Only 1% of people in low-income countries have received one dose. While the G7 leaders have pledged extra doses for low and middle-income countries, it is not expected until the end of 2022. Currently, the third wave is threatening Africa, with twenty-one countries seeing a rise in cases.
More critically, for Africa, all reset or recovery efforts must start with first slowing the spread of COVID-19 and then supporting MSMEs to survive through additional steps like improving access to finance, building capacity, and developing policies for an enabling business environment. No reset or recovery effort would be successful without first tackling the virus. Vaccinations are crucial, and sufficient access to the vaccine is needed to restore economic activities and help MSMEs recover.
At this moment, we should not forget the tremendous impact the African continent has had on global economic growth, and coming to its rescue indisputably benefits the global community. Since 2000, the African continent has contributed over $806 billion to the global economy. Africa has become an integral part of the global economy, of which small businesses are a major component.
“Viruses don’t mutate if they can’t replicate, and you can prevent them from replicating by vaccinating enough people so that the virus has nowhere to go,” Dr. Anthony Fauci. Africa urgently needs vaccines to slow the spread of the virus and prevent further economic sabotage. Small businesses were significantly affected due to the impact of the virus and are struggling to get their businesses back running. These enterprises cannot manage another economic slowdown because of a second, third, or even fourth wave. Equitable access to COVID vaccines can help stop the spread of the virus and ensure a reset and recovery for Micro, Small, and Medium Enterprises that play a significant role in developing economies.
Note: A similar version of this article is published on KilSah Consulting, used with permission.