Macro Analysis /
Sub Sahara Africa

Covid-19: I’d rather be back in Africa

  • After six months travelling in Africa, I see it as better placed to cope with the virus than most commentators realise

  • Points in favour: young population, climate, limited travel/urbanisation, past experience of epidemics, outdoor living

  • Risk: global recession combined with western democracies turning inward could be strongly negative for African assets

Paul Domjan
Paul Domjan

Senior Contributing Analyst

Tellimer Research
18 March 2020
Published byTellimer Research

This special report from our guest contributor, Paul Domjan, continues our series on the African experience of coronavirus

Having just returned from six months travelling overland in Africa, with Covid-19 cases popping up across the continent (including Nigeria and Kenya) and numerous countries banning flights, instituting quarantine requirements and closing borders, I wanted to reflect on why Africa is probably better placed to cope with the virus than most commentators realise.

It is important to note that, despite the advantages that I discuss below, there is still a great deal that remains unknown about Covid-19 that could invalidate or overwhelm these advantages. Moreover, as discussed in the conclusion, even if Africa suffers less than is expected from the virus itself, the possibility of a global recession combined with the western democracies turning inward could be strongly negative for African assets.

Before looking at the positive case for Africa, let’s set up the reasons why most commentators are pessimistic about the impact of the virus in Africa:

1. Low-capacity health systems: Even some of the best health systems in Africa, like the Aga Khan network health system in East Africa, would be rapidly overwhelmed if the number of serious cases were to follow a similar path to what we’ve seen in Europe and large numbers of infected people were to seek medical care in hospital. Indeed, early reports from the quarantine facilities in Kenya are worrying.

2. Poor hygiene: Hygiene options are extremely limited in most of Africa, especially outside of the very largest cities. Water for washing may not be available, or may not be clean, and liquid soap is practically unheard of, let alone hand sanitiser gel.

3. Low government capacity: Governments across Africa are often seen to have lower capacity to implement policy than their counterparts in wealthier countries, or indeed elsewhere in the developing world, which may limit their ability to implement the social distancing measures that have been the core of the public health response to Covid-19 in most countries.

4. Dense megacities where social distancing will be difficult: As Tellimer’s Hasnain Malik has pointed out, megacities in the developing world, including in Africa, tend to be much denser than in the developed world, complicating social distancing measures. Moreover, housing stock tends to be poor, limiting the practicality of self-isolation for many urban dwellers.

5. Limited public finances: While developed countries have relied primarily on monetary policy to battle the economic consequences of Covid-19, Tellimer’s Stuart Culverhouse argues that targeted fiscal policies will ultimately be more impactful. Indeed, the US is considering implementing helicopter money. Most African countries, including Nigeria, lack the fiscal space to implement these sorts of policies, even if developed markets do eventually choose to do so.

Set against this, many commentators have cited two main strengths that may protect Africa from Covid-19:

1. Youth: Africa is disproportionately young, and the young are much less likely to be seriously impacted by the disease than the populations of Europe (Figure 1) and China.

Figure 1: Africa’s population is younger and more resilient than Europe’s and China's



2. Climate: Most of Africa is hot, sunny and humid, and therefore similar viruses, like seasonal influenza, are less likely to be transmitted. That being said, more research is required to understand how temperature will impact the transmission of Covid-19.

Looking at Africa, both from bottom-up on the ground and from the top-down using geographic data, these advantages appear to understate Africa’s ability to cope with the virus. Moreover, there are four additional advantages that are perhaps being overlooked:

3. Experience: The experience of Ebola is a useful precedent for Africa. Travelling back by a rather circuitous route from Cape Town to London on 10 February, the first (and only) place I encountered screening for Covid-19 was Kigali. While the volume of air traffic in South Africa and London obviously make implementing screening more difficult than in Kigali International Airport, the experience of managing Ebola means that Rwanda, and indeed other countries that have battled to contain Ebola, has a playbook ready, including land and air borders, that it could roll out quickly to respond to Covid-19. Clearly Ebola, which shows symptoms much earlier, is easier to contain than Covid-19, but it does provide a starting point for developing a response.

Figure 2: Front-line Ebola screening at the Conakry maritime port

Source: Emily Jentes (Wikipedia Commons)

4. Low levels of travel make transcontinental transmission less likely and restricting international travel easier: Africans tend to travel in very small numbers, and the world comes to Africa in very small numbers. Ten African countries have fewer international air passengers per capita than North Korea, and domestic travel is similarly sparse.

Figure 3: Low levels of trips per capita (domestic overnight and international arrivals; green means less total travel per capita)

Source: UN World Tourism Organisation, Paul Domjan

Low levels of travel help Africa in two ways. On the one hand, they reduce the likelihood that clusters of Covid-19 in specific cities will join up into a transcontinental epidemic. On the other, they reduce the potential disruption from limiting travel, enabling African countries to act quickly to limit international arrivals.

5. Low levels of urbanisation: While Africa’s megacities are vast, unruly and growing rapidly, fewer than half of Africans live in cities—much fewer than half in many parts of the continent. Low levels of urbanisation combined with low levels of domestic travel limit the number of people likely to be exposed throughout a country following an outbreak in a major city.

Figure 4: Percentage of population living in urban areas

Source: World Bank

6. Africans live outside: Outside of places of worship, which will be a serious challenge, and shopping centres in Southern Africa, there are relatively few places where Africans, or at least sub-Saharan Africans, gather indoors.

Figure 5: Shopping centres in sub-Saharan Africa

Source: Market Decisions ZA

South Africa lacks some of the strengths of other parts of Africa. It has a more temperate climate, reflected in high numbers of tuberculosis infections, a problem the DRC and Ethiopia also share to a somewhat lesser extent, and South Africa has little direct experience to managing the risk of disease at its borders. South Africa is more urbanised than most of the continent, and the government is concerned about lack of water infrastructure in informal settlements leading to hygiene problems. Unlike in the rest of Africa, shopping centres play a large role in South African daily life. While it still has a large youth population, its age structure sits between that of China and that of Africa as a whole, with a much larger percentage in more elderly cohorts.

So, if Africa were to come through Covid-19 better than many expect, what would the pandemic really mean for the continent?

  1. Covid-19 is a huge boost to Chinese soft power in Africa: Across Africa, admiration for China is palpable. The perceived failure of western democracies to contain the virus, in comparison to what is seen as China’s aggressive and effective response, will help to further bolster China’s reputation as a model for development in Africa.
  2. The economic picture looks dark: As western democracies turn inward during the pandemic, they will progressively disengage with Africa. Aid budgets will fall in favour of health budgets, tourist arrivals will fall, demand for primary commodities and commodity prices will fall, financial investors’ appetite for emerging market assets will fall, and western corporations will limit investment, especially in emerging markets, as they look to conserve cash. Agricultural exports should hold up, indeed in some cases they may rise (eg coffee drinkers brewing at home tend to be less efficient in their use of beans than cafes, so demand for beans may rise when incomes fall and people abandon cafes), but this is one of the few bright spots against an otherwise dark economic backdrop.
  3. Covid-19 will leave Africa more financially dependent on China: With both their own, already low tax revenues and western economic engagement falling, African countries will be more reliant on Chinese financial support. Moreover, the lack of alternative options will make it harder for Africa countries to negotiate favourable financing terms with China.
  4. The promising Continental Free Trade Area (CFTA) may come under threat: Africa could be an immense market, but the current combination of tariffs, border delays and poor infrastructure mean that it isn’t a market yet. The CFTA promises to change this if it is implemented well. Fortunately, it is unclear whether the current border closures will prove to be a long-term threat to the CFTA. At face value, they would appear to be so, but closing borders also may prove to be a form of shock-therapy for countries that are heavily dependent on tariffs, which could help the CFTA become a reality when the covid-19 crisis has passed. I will return to scenarios for the CFTA in a series of forthcoming articles.