Business24 Newspaper (April 20-2020) by Business24 Online

EDITION B24 | 32

MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

Stock market outlook tied to pandemic BY PATRICK PAINTSIL

he Ghana Stock Exchange incurred further losses at the close of last week, driving the year-to-date loss on the benchmark composite index to 6.67 percent, with analysts now predicting that the outlook for the bourse is tied to the raging coronavirus pandemic. The exchange’s composite index touched 2,106.58 on Friday, its lowest level since July 2017. Financial stocks, despite the strong 2019 earnings reported by banks, have done worse than the total market, losing 9.48 percent year-to-date and 10.83 percent since a year ago. In year-on-year terms, the total market index has fallen by 11.93 percent. Although the market was already in negative territory before the coronavirus disease broke out in the country in March, it seemed to be responding positively when companies began issuing their 2019 financial statements, but this was quickly snuffed out by the pandemic, Head of Research at Databank Alex Boahen told Business24.

Ekow Afedzie is the Managing Director of the Ghana Stock Exchange

Despite the negative returns, trading on the bourse was actually higher in the first quarter of the year—with a turnover of GH¢76.85 million—than the same period last year, which recorded a turnover of GH¢39.48 million. Investors, Boahen said, have become concerned about the economic effects of COVID-19 and its resulting tough

BY NII ANNERQUAYE ABBEY

Temporarily setting aside the fiscal rule will unburden Ken Ofori-Atta to explore more financing options to tame the coronavirus crisis

6.67% Drop in composite index

MORE ON PAGE 3

ECONOMIC INDICATORS *EXCHANGE RATE (INT. RATE)

USD$1 =GH¢5.6896*

EXCHANGE RATE (BANK RATE)

USD$1 =GH¢5900.*

*POLICY RATE

14.5%*

GHANA REFERENCE RATE

15.12%

OVERALL FISCAL DEFICIT

7.8%*

PROJECTED GDP GROWTH RATE PRIMARY BALANCE. AVERAGE PETROL & DIESEL PRICE:

1.5% -1.1% OF GDP GHc 5.13*

INTERNATIONAL MARKET BRENT CRUDE $/BARREL NATURAL GAS $/MILLION BTUS GOLD $/TROY OUNCE CORN $/BUSHEL COCOA $/METRIC TON

28.08 1.75 1,698.80 329.50 2,368

COFFEE $/POUND:

+5.70 ($108.30)

COPPER USD/T OZ.

220.15

SILVER $/TROY OUNCE:

16.39

| THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

NEWS/EDITORIAL

Editorial: 1,024 infections! 1

Wash your hands 2

Cover your cough 3

If you are sick, wear mask Brought to you by

LIMITED Copyright @ 2019 Business24 Limited. All Rights Reserved. Editorial Team Dominic Andoh: Editor Eugene Kwabena Davis (Head of Parliamentary Business & Commodities) Benson Afful (Head of Energy & Education) Patrick Paintsil (Head of Maritime & Banking) Nii Annerquaye Abbey (Online Editor) Marketing Alexander Lartey Agyemang (Business Development Manager) Ruth Fosua Tetteh (Dept. Business Development Manager) Gifty Mensah (Marketing Manager) Irene Mottey (Sales Manager) Edna Eyram Swatson (Special Projects Manager ) Events Evelyn Kanyoke (Snr. Events Consultant) Finance/Administration Joseph Ackon Bissue (Accountant)

The rapid spread of the coronavirus (COVID-19) in the country requires that citizens, religious bodies, and businesses follow directions given by government and health care professionals so we can contain this disease and ultimately win the fight. The increase in the number of infection from under 10 barely a month ago to 1,024 should be a cause for concern. The healthcare crisis in Italy, Spain, UK and US

should serve to as a warning for us. We don’t want to get to the point where doctors will have to decide who dies and who lives based on the available facility. In the hardest-hit European countries like Italy and Spain, citizens and businesses went about their daily routine even when the first case of COVID-19 pandemic was reported in those countries, ignoring warnings by the WHO and their home governments. Today, there is huge pressure on public health care systems

in these countries. Large spaces have had to be converted into a temporary health care facility to cater for the growing number of infections. Despite massive public education about the disease, some recalcitrant members of society are putting all of us at risk by not observing the prescribed precautions. Densely populated make-shift markets are a worrying sight. Despite the best efforts of the security agencies to enforcement the restriction on movement in the

affected parts of the country, some persons have just thrown caution to the wind. Business24 will like to entreat everybody that this is a global health threat that threatens our very existence as a people and the existence of businesses. It is imperative that we listen to what authorities have to say, obey what we are told and live to see tomorrow.

Ofori-Atta to suspend 5% fiscal rule Finance Minister Ken Ofori-Atta has told the International Monetary Fund (IMF) government is looking to suspend the statutory fiscal rule which requires that the budget deficit in any given year does not exceed 5 percent of GDP. The Fiscal Responsibility Act, the landmark legislation passed in December 2018, four months before Ghana exited its four-year protracted IMF bailout programme, was intended to safeguard the gains the country had made in achieving macroeconomic stability. But with the novel coronavirus tearing through the country’s still fragile economy and hurting government revenues like no other crisis has done in the last 40 years, Mr. OforiAtta is expected to tell parliamentarians in the coming weeks that the 5 percent deficit rule is a luxury government cannot afford at this time. The pandemic in one fell

swoop has chopped off US$1 billion from government’s expected crude oil revenue, while the imposition of restrictions on human movement to check the virus’s spread has brought businesses to a standstill, with non-oil tax revenues projected to fall by US$400 million. Apart from the revenue loss, government’s plan of raising enough funds to deal decisively with the pandemic is expected to push the deficit far beyond the 4.7 percent of GDP announced in the 2020 budget. Mr. Ofori-Atta, who last week received US$1 billion from the IMF to battle the effects of the COVID-19 outbreak, has put all his cards on the table in a bid to overcome the crisis, including suspension of the fiscal rule, given the precarious position of the economy. The Fiscal Responsibility Act provides grounds for which the deficit rule can be suspended—this includes during a public health epidemic or an unanticipated severe economic shock.

The act also stipulates that government present to Parliament, within 30 days of suspending the fiscal rule, plans to restore public finances after the emergency. Mr. Ofori-Atta is expected to rely on this provision to temporarily set aside the deficit rule, which will enable him to present plans for a revised budget deficit target of 6.6 percent of GDP. Thread cautiously While the immediate benefit of the suspension is to create enough fiscal space for government to attempt to reboot the economy, Dr. Said Boakye, an economist with fiscal policy think tank Institute for Fiscal Studies (IFS), is urging the government to be minded about overindulgence. According to Dr. Boakye, suspending the fiscal rule is the most plausible thing to do now; however, the Finance Minister must ensure fiscal prudence at all times in order not to risk exacerbating the macroeconomic situation. He argued being an government its appetite

that with 2020 election year, needs to tame to spend and

focus solely on areas that will help the country overcome the COVID-19 outbreak. Rising public debt Courage Martey, an economist with investmentbanking firm Databank, commenting on the immediate implication of the suspension, argued that a wider deficit would herald an increase in the public debt, which stood at GH¢218 billion (63 percent of GDP) as at last year. He however urged that government explores more concessional financing options, like those offered by the Bretton Woods institutions, which are relatively cheaper to service and would not unduly worsen the country’s debt situation. Mr. Martey said in order for government to restore the macroeconomic fundamentals to the preCOVID-19 state, the fiscal rule must be restored as soon as it is possible, as the longer a wide deficits persists, the more difficult it would be to restore the economy to a sound footing.

Stock market outlook tied to pandemic Continued from page 1

now more focused on the virus than the market fundamentals. We can have companies doing brilliantly, looking at the market basics, but as long as the pandemic lingers on, the market fundamentals won’t be of much importance to investors.” The decline of the bourse is also linked to investors being attracted to government securities, which are in direct competition with equities,

said financial analyst Jerome Kuseh. The pandemic will lead to “significant slowdown in business activity, significant job losses and resultant loss of income, which will lead to more selling of stocks as people look to raise money to buy basic consumables,” he said. “We will also see more foreign investors wanting to exit the market and more flight to safety—where people will prefer bonds whose

rates are guaranteed.” In another sign of worry, last week the International Monetary Fund confirmed projections that Ghana’s economic growth will slump to 1.5 percent, the weakest in almost 40 years, as a result of the coronavirus crisis. If the bourse’s losses persist till mid-year because of the pandemic, the market could end the year in the negative, Kuseh projected. According to Boahen, while almost all equities are at risk,

“MTN (the mobile network operator) is going to be the biggest winner of this situation because people are working from home and will consume more data.” As at the time of writing, Ghana’s coronavirus cases had risen to 641, with eight deaths and 83 recoveries. It is not clear, however, when infections will reach a peak, with contact tracing and testing being ramped up as the authorities try to “get ahead of the virus”.

NEWS

THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

Economy may take 3 years to recover—Ofori-Atta deficit is projected to decline to 9.5 percent of GDP in 2020, based on data submitted to the IMF inclusive of financial and energy sector costs. The debt-to-GDP ratio, excluding ESLA bonds, is also expected to increase to about 67 percent in 2020.

BY DOMINICK ANDOH

It may take up to three years for the economy to recover from the impact of the coronavirus (COVID-19) pandemic, Finance Minister Ken Ofori-Atta has said, urging that debt aid by lenders such as the World Bank and International Monetary Fund (IMF) is imperative for any recovery programme. “A U-shaped recovery is touted, but ours will likely be a steep drop, then a twoto three-year downward slide before a recovery; a trapezoid-shaped recovery!,” Mr. Ofori-Atta said in an article published in the Financial Times. The Finance Minister’s recovery timeframe follows a similar projection by Osei Kyei-Mensah-Bonsu, Majority Leader in Ghana’s 275-member legislature, that the impact of COVID-19 on the economy “will take about two years to address.” Loss

domestic

tax

Mr. Ofori-Atta would be hoping the African Union four special envoys-Ngozi Okonjo-Iweala, Donald Kaberuka, Tidjane Thiam, and Trevor Manuel—tasked to negotiate debt relief secure a favourable deal.

revenue and eroding of macroeconomic gains made over the past three years, following the worldwide spread of COVID-19, has left Ghana, as well as many African economies, in a precarious situation.

a US$1 billion emergency loan, the highest granted to an African country so far, to aid Ghana fight the effects of the pandemic.

Many countries on the continent have depleted their reserves and turned to the Bretton Woods institutions for financial support to contain and fight the respiratory illness.

Despite this, the country’s debt level further threatens an already fragile socioeconomic situation. Mr. Ofori-Atta notes that though government has lost more than US$1 billion in revenue since the outbreak, it still has an obligation to service its debts.

The IMF last week approved

The country’s overall fiscal

Former British Prime Minister Gordon Brown has backed the call for debt relief as it is the “most effective pandemic aid.” He has advocated for a waiving of upcoming debt payments by the 76 low- and lowermiddle-income countries. “It would be a tragedy and a travesty if steppedup global financial support for developing countries ended up helping those countries’ creditors rather than their citizens. National debts incurred before the crisis must be at the top of the international financial agenda. We should agree now that once we have clarity on the economic fallout of the crisis, we will pursue the kind of systemic

approach required to restore debt sustainability in a number of emerging-market and developing countries, while safeguarding their prospects for attracting new investment.” Mr. Brown, writing in an article co-authored with Prof. Lawrence H. Summers, a former President of Harvard University, and published by this newspaper’s partner, Project Syndicate, said: “The current proposal is that creditor countries would offer a six- or ninemonth standstill on bilateral debt repayment, at a cost of US$9-13 billion. But this proposal is constricted both in its time frame and the range of creditors included. We propose relieving over US$35 billion due to official bilateral creditors over this year and next, because the crisis will not be resolved in six months and governments need to be able to plan their spending with some certainty.”

Takoradi Port back to manual processing due to UNIPASS challenges NEWS DESK REPORT

their goods would be costly to them.

Freight forwarders at the Takoradi Port in the Western Region have had to resort to manual valuation due to the failure of the UNIPASS system to clear goods electronically and seamlessly.

Given the deficiencies of the UNIPASS system, agents now cannot work from home and have to be physically present at the port to ensure their consignments are cleared.

The current manual processing of valuation documents, according to Business24 sources at the port, has resulted in long queues and delays in clearing of goods. The sources insist that the UNIPASS system has created inefficiencies in goods clearance, despite the strenuous denials by Ghana Link, the operator of the new system.

The erstwhile manual processing of documents at the country’s ports was associated with corruption— several corrupt port officials were punished in the past after media exposés.

The sources say, while importers are not able to access their Tax Identification Numbers (TIN) and other registration details in the new system, the system handlers themselves are having challenges with manifest declaration, handling and processing. Two vessels have so far docked at the port within the last four weeks, Business24 was told. However, due to the challenges with the UNIPASS system, only 20 percent of

Revenue leakage fears

The challenges associated with the deployment of the UNIPASS system at the Takoradi Port on April 1 have raised questions about its suitability and the decision to replace existing tried and tested Single Window vendors GCNet and WestBlue.

about 300 containers on the first vessel, which docked four weeks ago, has been cleared. The second vessel, which docked last three weeks, is yet to be attended to. Some importers who spoke with the paper said they have been asked to print out previously scanned documents from the GCNet/ West Blue system to serve as a guide for valuation— since the UNIPASS system is currently unable to do this— and manually attach them to

their current documents for submission.

The danger in the use of the manual processing system is that agents can connive with corrupt customs officers to clear goods using wrong values, which would lead to revenue losses to the state.

They said the situation is further compounded by the fact that UCR (Unique Consignment Reference) and IDF (Import Declaration Form) details are captured from the GCNet/West Blue system for processing by UNIPASS.

Importers who spoke to the paper expressed fears that the nation seems to have returned to the past, when manual valuation allowed customs officials to influence payments and enrich themselves at the expense of the state.

Meanwhile, some freight forwarders told Business24 that some of the imports in the containers are perishable and any delay in clearing

The CommissionerGeneral of the Ghana Revenue Authority (GRA),

UNIPASS deployment Takoradi Port

Ammishaddai OwusuAmoah, ordered the deployment of the Integrated Customs Management System (ICUMS), also known as the UNIPASS system, at the Takoradi Port effective April 1. The new system was to replace the customs management system that was being operated by Ghana Community Network (GCNet) and West Blue Consulting in the processing of all cargo-related documents and subsequent imposition of applicable import duties and taxes. The order asked shipping lines to use the new system for manifest submission to start the process for valuation and billings to the shipper. The directive read: “All shipping lines/agents are to submit manifest in ICUMS for vessels arriving at the Takoradi Port. All Customs Classification and Valuation Report (CCVR) acquired for bill of entry creation targeting manifests and bill of laden for vessels arriving later than 1st April, 2020 shall be re-processed in ICUMS.”

MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

NEWS

THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

Local production of PPE, our commitment to promoting industries – Veep Vice President Mahamudu Bawumia, on Friday, said the Government’s request for the local production of Personal Protective Equipment (PPE) to aid the fight against COVID-19 demonstrates its commitment to promoting the manufacturing industries. The Government has selected five firms to produce 3.6 million PPE, including face masks, medical scrubs and medical gowns. The Vice President, who toured three of these companies, in Accra, assured them that they would be assisted to sustain their production even after the crisis. Dr Bawumia visited Dignity DTRT, Sleek Garments and Cadling Fashion. He was

industry is all about and we can see these hard-working women and men who are working so efficiently”.

accompanied by the Minister of Trade and Industry, Mr Alan Kwadwo Kyerematen. “As you know, we are dealing with the Coronavirus pandemic and one of the challenges we have in this country and across all countries has been how to protect our frontline health workers,” he stated.

“Government is fully committed (to local industries) not just in this short-term but long-term. So you can expect more orders. “Once production capacity gets to where it should be, then we will not have any need to import these items going forward.

“There is a global demand, whether you are talking about the UK or the US but there is a shortage of PPE. “We have been looking at how to get these PPE to our health workers because we don’t want them in the process of saving our lives, to lose theirs. “Indeed, we have a real champion of Ghanaian industries in the person of our Minister for Trade

and Industry, who said, we should look at producing these PPE in the country. “Therefore, we discussed this at Cabinet and it was adopted very quickly.” The Vice President said he

was very impressed by the efficiency of the companies visited and commended the workers for their skill and commitment “Today, we are seeing what Ghanaian ingenuity and

“This will be part of the post COVID-19 architecture, and we will be having these sort of things produced in Ghana rather than import them. This is what the President was talking about - ‘take these opportunities to grow Ghanaian industries, create jobs in Ghana, create income -’ and I think that is what you are doing here”. (GNA)

World Bank Group and IMF mobilize partners in the fight against COVID-19 in Africa The World Bank Group and International Monetary Fund convened African leaders, bilateral partners, and multilateral institutions to spur faster action on COVID-19 response in African countries. Cyril Ramaphosa of South Africa, United Nations Secretary General Antonio Guterres, Director General of the WHO Dr. Tedros Adhanom Ghebreyesus, Africa Union Commission Chairperson Moussa Faki Mahamat, and officials of individual countries outlined their policy plans for effective use of resources, multilateral organizations including the United Nations pledged their continued support, and bilateral partners reemphasized their commitment to a debt standstill beginning May 1, 2020. This comes in response to calls from the World Bank Group President David Malpass, International Monetary Fund Managing Director Georgieva, and other partners for creditors to suspend debt repayments in order to provide muchneeded support to the poorest countries.

“This pandemic has already had a devastating impact on Africa and its effects will deepen as the rate of infection rises. It is a setback for the progress we have made to eradicate poverty, inequality and underdevelopment,” African Union Chairperson and President of South Africa, Cyril Ramaphosa said. “While recent announcements from international partners are very welcome, large financing gaps remain and greater support is needed to ensure that African countries are able to respond effectively to the health crisis and address economic challenges,” he added. Together, official creditors have mobilized up to $57 billion for Africa in 2020 alone-including upwards of $18 billion from the IMF and the World Bank eachto provide front-line health services, support the poor and vulnerable, and keep economies afloat in the face of the worst global economic downturn since the 1930s. Private creditor support this year could amount to an estimated $13 billion. This is an important start, but the

Kristalina Georgieva said.

continent needs an estimated $114 billion in 2020 in its fight against COVID-19, leaving a financing gap of around $44 billion. The World Bank Group and the IMF suggested a range of financing options and policy tools as part of the pandemic response, many of which African countries are looking to implement as they plan for the medium and long-term impacts of the crisis. These include further financing from official and private sector creditors. “The World Bank Group is putting its full capacity to work for people across Africa as they fight this pandemic,” said World Bank Group

President David Malpass. “The world has rarely seen a crisis of this magnitude, and no one can stand on the sidelines; we cannot leave any country behind in our response. We have provided emergency support to 30 countries across Africa so far, with more to come, and will continue to advocate for debt relief and increased resources, especially for those countries hardest hit by COVID-19. “Our message is clear: We stand with Africa: Through our commitments today we are ‘Mobilizing with Africa’ to help soften the blow of COVID-19 on the continent,” IMF Managing Director

“The pandemic is having a monumental impact across Africa and the IMF is leaning forward with many other partners to leverage our resources and to help save lives and livelihoods”. She added that “The IMF will provide more concessional financing and we count on others to step up and do their part, to shield the economy and the people, and provide the foundations for a strong and sustainable recovery,” he added. The World Bank called on African countries to work together especially on the health response and on limiting trade disruptions to ensure freer movement of medical and food supplies. With so many people working in informal jobs - 89 percent of workers in SubSaharan Africa alone – the World Bank and IMF noted that countries need to take immediate steps to expand social safety net programs and support workers and small enterprises. Government services, they noted, will equally need attention to keep running effectively for the duration of this crisis.

OPINION

MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

Banking in the next decade: COVID-19 – Digital Transformation not an option “When something bad happens, you have three choices. You can either let it define you, let it destroy you, or you can let it strengthen you.” - Dr. Theodor Seuss BY EBENEZER ASUMANG The novel coronavirus seems to have taken all by surprise and exposed vulnerabilities that were never anticipated across all sectors of the various economies including banking. Obviously in our lifetime, we have not had to deal with anything remotely to the magnitude of this pandemic. Until now, the world seems to have become more adept in responding to the everincreasing natural disasters. Significantly, governments so far have tried to flatten the curve to slow the spread of the disease by introducing several “WHO certified protocols”. However, the gravity and speed of this pandemic, is significant enough to change future individual and institutional behaviours. One such change is expected in the area of digital transformation by banks. Digital technology has existed for sometime now but sadly, majority of banks have been slow to move in this direction and many have barely even started this journey. This is about to change dramatically and urgently because the COVID-19 experiences have significantly changed the dynamics with a “no turning back” option. It is time to reinvent the digital transformation wheel to propel banks to become more efficient in delivery and significantly creating added value to customer service. Changing the status quo of legacy banking. The digitalization journey is propelled by easily accessible technologies, stable economic fundamentals and a good regulatory climate. Some research showed that 82% of global banks are already implementing a digital transformation program and 62% expect to be digitally mature in 2020, compared with just 19% in 2018. Transformation is no longer an option but a must. Digital transformation is certainly not solving single business needs with individual, disconnected digital technologies but

the need to transform all processes, functions and interactions, while delivering a compelling customer experience and distinguished engagement. A bank`s digital transformation strategy should respond its business strategy requiring a fundamental change in culture from analog to digital. This can be carried out in many ways: Digital innovation should be continuous. Banks need to be able to move fast to stay ahead of the competition. Rapid innovation is only possible if you can leverage on flexible, modular and reusable digital banking capabilities. Opening up to a bank`s ecosystem is another key differentiation factor. Open Banking enables strategic partnerships with Fintechs, Telco’s, Insurance providers. Such partnerships allow financial institutions to offer value-adding 3rd-party services which can unlock new revenue opportunities. Digitalized end-to-end Operations. Addressing integration challenges is one of the first items on CIO’s digital transformation agenda. Institutions have to streamline operational processes with automated workflows. Once optimized and connected, a business is ready to embrace futureproof digital banking capabilities such as instant payments, digital customer onboarding, origination and servicing and next-level technologies, like artificial intelligence (AI) and robotic process automation (RPA). Customer Experience via Omnichannel. It is high time financial service providers shifted their viewpoint from bankcentric to customer-centric. The modern customer lifestyle is a harmonic blend of the physical and digital worlds. Exceptional digital experiences, in turn, are key for expanding a bank`s customer base and share of wallet. Future-proof microservice architecture. In a digital world, being “customer-first” goes all the way back to a bank’s technology stack and the

EBENEZER ASUMANG

ability to quickly roll out new customer-centric initiatives. Microservice architecture plays a beneficial role in the business of digital banking because it adds flexibility to a bank’s digital transformation journey. A digital banking platform with a microservice architecture will allow the continuous delivery of software applications, regardless of the size and complexity of the project. It also enables an organization to quickly innovate on its technology stack, easily scale vertically and horizontally and strategically extend the platform using modular building blocks. Seamless Integrations. A digital banking platform shouldn’t turn into the next legacy technology in a bank`s IT landscape. Instead, it should seamlessly integrate with the core banking system and with the other existing and future

systems, modernizing the institution`s infrastructure. A robust Integration Framework is a key advantage of a digital banking platform, enabling process, channel and system integrations, unified customer data, central monitoring, business continuity, IT asset reusability, and more. With the help of an Integration Framework, a bank can connect the business end-toend to increase its efficiency and focus on what really matters, which is growth. Last but not least, consider the digital banking platform’s security and stability the bank needs to be able to provide 24/7 service availability with frictionless payments, regardless of the market conditions operated in, be it a mature or a developing market. A digital banking institution should be built in anticipation of change. This will alter the way almost every bank

operates, requiring new processes, skills, products and approach to meeting consumer needs. Employees must be prepared to accept change, be aware of the ways change can impact their work, and be willing to disrupt themselves as needed in order to cope with the new digital culture. In the end, a good strategy or great technology will not overcome a culture that is not in alignment with the transformation taking place. If leaders within an organization do not engage and get the support of employees at all levels, digital transformation efforts will fail.

EBENEZER ASUMANG has worked extensively in mainstream banking and NBFIs. He is a Google Certified Digital Marketer, an Author and a member of the CGIA Institute, USA. www.ebenezerasumang.com /eben_ asumang@yahoo.com/0242339145.

THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

NEWS

MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

Gov’t seeks more “resources” to bridge funding gap Atta reckons more resources needs to be explored to ensure the country battle the virus head-on.

BY EUGENE DAVIS Government will continue to push to secure additional source of funding to mitigate the economic impact of the coronavirus pandemic (COVID-19), Finance Minister, Ken Ofori-Atta has told Parliament. Contributing to the approval of a US$1billion rapid credit facility (RCF) by the International Monetary Fund(IMF)to support the country’s effort to tackle the coronavirus pandemic(COVID-19) by Parliament on Friday, he maintained that they will persist to look for more resources to close the financing gap regardless of the IMF facility. “Across the region no country has enough fiscal space to confront this crisis alone, the efforts of African countries need to be backed by additional financial assistance for an effective policy response to COVID-19. So this government will continue to look for resources to bridge the gapthese are extraordinary times and we must take

Two to three years decline He also added that for two to three years, the country should expect steep decline to its economy. “We will certainly have a steep decline and for two or three years we expect sloping curve downwards before a gradual recovery and we must get ourselves ready for that” he told lawmakers.

Ken Ofori-Atta – Minister for Finance ponders on the virus fallout as he explores other funding mechanisms to shore up the economy

extraordinary measures to ensure we protect our people” he said. The coronavirus (COVID-19) outbreak has opened up a budget financing gap of GH¢12 billion that needs to be closed. The financing gap includes the cost of revenue losses and additional COVID-19related public spending, which together was pegged

at GH¢9.5 billion (2.5 percent of revised GDP). Meanwhile, the economy’s growth rate, which surpassed 6 percent in each of the last three years and was initially projected at 6.8 percent for 2020, could fall to a record low of 1.5 percent under a partial lockdown scenario, or worse if a full lockdown is imposed. It is in this regard that Ofori-

Africa has about US$44billion in interest payments to pay and according to the Finance Minister, Ghana, South Africa and other African countries are negotiating to defer its interest payments to two years. Furthermore, he added that it is time Africans work together because “these are unprecedented times in our lives and is going to be a challenge for all of us to protect our people”. IMF cash to part finance electricity subsidy, others Ghana’s

legislature

Friday approved the US$1billion rapid credit facility (RCF) by the International Monetary Fund (IMF) to support the country’s efforts to tackle the coronavirus pandemic (COVID-19). According to a Finance Committee report, out of the total facility of US$1billion, which is equivalent to GH¢5.5billion, GH¢1billion will be used to finance the electricity subsidy announced by the President. The remainder of the cash will be employed towards expenditure outlined in the 2020 Budget. The report also reveals that proceeds from the RCF will be used to help close the financing gap that has been created by the pandemic as a result of shortfalls in revenues and additional expenditures to fight the COVID-19 pandemic. The purpose of the facility is to provide low access, rapid and concessional financial assistance to LowIncome Countries (LICs) facing an urgent balance of payments need, without expost conditionality.

Emirates becomes first airline to conduct on-site rapid COVID-19 tests for passengers Emirates in coordination with Dubai Health Authority (DHA) will be introducing additional precautions. Passengers on today’s flight to Tunisia were all tested for COVID-19 before departing from Dubai. Emirates is the first airline to conduct onsite rapid COVID-19 tests for passengers. The quick blood test was conducted by the Dubai Health Authority (DHA) and results were available within 10 minutes. This test was conveniently done at the Group Check-in area of Dubai International Airport Terminal 3. Adel Al Redha, Emirates Chief Operating Officer said: “The testing process has gone smoothly and we would like to take this opportunity to thank the Dubai Health Authority for their initiatives and innovative solutions. This would have not been possible without the support of Dubai Airport and other government authorities. We are working on plans to scale up testing capabilities in the future and extend

mandatory for all employees at the airport. Passengers are also required to wear their own masks when at the airport and on board the aircraft, and follow social distancing guidelines. Emirates has modified its inflight services for health and safety reasons.

it to other flights, this will enable us to conduct on-site tests and provide immediate confirmation for Emirates passengers travelling to countries that require COVID-19 test certificates. The health and safety of staff and passengers at the airport remain of paramount importance.” HE Humaid Al Qutami, Director-General of the Dubai Health Authority (DHA), said: “We are glad to work with Emirates on the

successful implementation of rapid COVID-19 testing at the airport for departing travellers. To tackle COVID-19, we have been proactively working with various governmental organisations and the private health sector and we have implemented all necessary measures from public health protection to provision of high-quality health services in line with the latest international guidelines. We believe strongly that

the most effective solutions require close partnerships with other public and private sector organisations.” The airline’s check-in and boarding formalities have also been adapted with social distancing in mind. Protective barriers have been installed at each checkin desk to provide additional safety measures to our passengers and employees during any interaction. Gloves, masks and hand sanitisers have been made

Magazines and other print reading material will not be available, and while food and beverages will continue to be offered on board, packaging and presentation will be modified to reduce contact during meal service and minimize risk of interaction. Cabin baggage are currently not accepted on flights. Carry-on items allowed in the cabin are limited to laptop, handbag, briefcase or baby items. All other items have to be checked in, and Emirates will add the cabin baggage allowance to customers’ check-in baggage allowance. All Emirates aircraft will go through enhanced cleaning and disinfection processes in Dubai, after each journey. Source: Emirates

THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

F E AT U R E

MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

How Africa can fight the pandemic BY ARKEBE OQUBAY The COVID-19 death toll is still mounting in the developed West, but the pandemic’s impact on Africa could be much worse. African and international leaders must act boldly, decisively, and immediately to prevent a catastrophe. Many African countries were ill-prepared to tackle the Ebola epidemic that erupted in 2014. And COVID-19 presents a much graver danger because it can spread exponentially, including via asymptomatic carriers, while African governments remain constrained by weak health-care systems, limited resources, and economic and spatial constraints on social-distancing measures. Since Egypt reported Africa’s first confirmed case of COVID-19 on February 14, the number of cases has risen to more than 10,000, with Algeria, Egypt, Morocco, and South Africa each recording over 2,000. The continent’s death toll already exceeds 500, implying a mortality rate well above the global average. This high death rate, together with the low number of confirmed cases, may reflect Africa’s very low rate of COVID-19 testing. Many African governments have signaled a readiness to respond to the pandemic. But designing measures that reflect reality, and ensuring that they are effective, will be difficult. Under South Africa’s national lockdown, for example, the country’s most vulnerable social groups are struggling to feed their families, cannot wash their hands regularly because they have no access to clean water, and cannot self-isolate if they live in crowded slums. Other African countries – with far less developed socialwelfare systems than South Africa – face even bigger challenges. According to the World Health Organization, the continent has just 1.06 nurses and midwives for every 1,000 inhabitants. And current evidence suggests that the belief that Africa’s tropical climate will help to suppress the coronavirus is a myth. In the coming weeks and months, millions of Africans may become infected with COVID-19. Researchers at Imperial College London recently estimated that, even under the most optimistic scenario, the virus would

kill 300,000 people in Sub-Saharan Africa – not to mention the immense economic costs it would impose, owing to lost export revenues, severed supply chains, and plummeting demand. African governments therefore must make COVID-19 their top priority, and urgently design and implement ambitious, wellinformed policies to combat it. After all, international support – although muchneeded – is no substitute for resolute national action. For starters, African leaders must learn from countries that have already experienced the pandemic, in the way that South Africa is drawing lessons from South Korea. Furthermore, it is vital that governments collaborate effectively, share their experiences of tackling the virus, mobilize experts – both local and from the diaspora – and strengthen their coordination with the WHO. Indeed, every African government should coordinate action by private and public actors and civil society, but without resorting to force. And while governments should establish wartime-like organizational structures and seek to maximize coordination among national and local agencies, they should not use the crisis as an excuse permanently to constrain or remove individual freedoms. Rather, political leaders should encourage the public to hold them accountable for their

management of the publichealth crisis, and accept checks and balances on government power. Managing the coming economic crisis also will be critical. This means reducing the damage to the most dynamic sectors as much and as early as possible, because more productive activities have bigger spillover effects and are crucial for recovery and large-scale employment. The biggest mistake would be to place all economic activities on an equal footing and try to make everyone happy. Instead, policymakers should focus on export industries, which are vital to ensure foreign-exchange liquidity, ease balance-ofpayments constraints, and generate employment. Encouraging services exports and high-value service activities is also critical, as is ensuring affordable food supplies. Current and former African leaders, prominent international figures such as former UK prime minister Gordon Brown, and organizations such as the International Monetary Fund have called for greater international cooperation to support Africa. But if the virtual G20 meeting in March is any indication, governments’ current appetite for such efforts appears limited. Nonetheless, international action is essential and must be guided by several critical principles. First, any support needs to focus on emergency health measures to help

African countries to control the pandemic. Second, international cooperation must include development assistance to help countries manage economic crisis and humanitarian needs. It should also include support for foreign-exchange liquidity in order to limit insolvency and protect essential economic activities. And an economic-stimulus package, including a large new issue of IMF Special Drawing Rights and favorable terms for developing countries, is essential to a faster recovery. Third, debt relief is indispensable. With their exports hard hit, African countries will not be able to afford the $50 billion of debt payments that fall due this year. IMF and World Bank shareholders therefore should take the lead in waiving debt service for the coming years, not just for 2020. Debt relief and new funding should be most generous for those African countries (typically non-resource-rich and less politically strategic) that are least able to borrow in commercial markets and least able to spend on building health-care systems. And while accountability is important, it would be wholly inappropriate to make such assistance conditional on specific market reforms. Above all, the response to Africa’s COVID-19 plight must be rapid and at scale. In a world where progressive global leadership is in short supply, and where rulesbased global governance is

under threat, this is a chance for African and international policymakers to take decisive action. South African President Cyril Ramaphosa is showing the way in this regard, and not merely by acting swiftly at home. In his role as the African Union’s Chair, he has appointed four of the continent’s most respected leaders – Ngozi OkonjoIweala, Donald Kaberuka, Tidjane Thiam, and Trevor Manuel – as special envoys to negotiate debt relief. If the crisis in Africa is to be halted, similar dynamism will be needed elsewhere.

Arkebe Oqubay, a senior minister and special adviser to the prime minister of Ethiopia, is a distinguished fellow at the Overseas Development Institute and the author, most recently, of African Economic Development: Evidence, Theory, Policy and The Oxford Handbook of Industrial Hubs and Economic Development. Copyright: Project Syndicate, 2020. www.project-syndicate.org

THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

F E AT U R E

MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

The perverse economics of ventilators

BY SHAMEL AZMEH By relying excessively on market forces, we have all but ensured that technologies such as ventilators become more complex and expensive over time, putting access to them out of reach for most of the world’s people. It didn’t have to be this way. As the coronavirus has spread around the world, the need for ventilators has soared. In the United Kingdom, the National Health Service estimates that it will need at least 30,000 more of these critical devices. In New York, Governor Andrew Cuomo also has called for 30,000 more, warning that New York City will soon run out. Ramping up production to meet this demand is a huge challenge. In Italy, the only ventilator manufacturer, Siare Engineering, has been asked to increase its production from 125 per month to at least 500 per month. Likewise, Ventilator Challenge UK, a consortium of firms that includes some of the biggest names in British manufacturing, is desperately trying to scale up production. And in the United States, President Donald Trump has finally invoked the 1950 Defense Production Act and ordered General Motors to make ventilators. Not surprisingly, the situation is far worse in poorer countries, where the supply of available ventilators is minimal and money to acquire more is scarce. In the Central African

Republic, for example, there are just three ventilators for the entire country; in Liberia, there is reportedly only one. Bangladesh has fewer than 2000 ventilators for a population of more than 160 million. Under these conditions, it is easy to criticize governments for not being prepared to supply hospitals with critical equipment in the event of an emergency. But even if countries maintained a “strategic reserve” of ventilators, they probably would not have enough to meet current needs. Nor can existing firms be expected to multiply their output overnight, given their reliance on just-in-time supply chains, lack of staff, and other factors. The fact is that it is very difficult for any economic system to meet such an increase in demand in such a short period of time. Nonetheless, today’s critical shortage of ventilators (and of diagnostics and therapeutics) is also a symptom of structural flaws in the prevailing economic model. At issue is not just where resources are allocated, but also how technological development is envisioned and determined in the first place, and the extent to which such choices consider public health. The COVID-19 crisis requires that we reflect on fundamental questions concerning what we produce, how we produce it, and for whom. Since assisted-breathing devices were invented in the 1920s, they have undergone

significant technological development, acquiring sensors, monitors, and other features to determine and display a patient’s breathing curve. Yet the same economic model that provided the investments needed for these innovations also put ventilator technology on a path that made units more expensive and difficult to produce and operate, owing to their growing complexity. As Bernard Olayo of the Center for Public Health and Development in Kenya points out, even if poor countries could afford the necessary supply of ventilators, many still would lack enough people qualified to operate them. Ventilator technology did not have to evolve in a way that has left it beyond the reach of most of the world’s people. The fact that innovation is driven by market demand meant that firms had an incentive to develop more expensive and complex machines, to protect their technologies through intellectualproperty regimes, and to sell these machines to those who could afford them – largely the rich economies. Even access to repair information is usually restricted by the manufacturer. This was not the only path available. Alongside the more sophisticated ventilators, we could have developed simpler, more affordable, and more user-friendly models. In fact, in 2006, following the 2003 SARS outbreak,

the Biomedical Advanced Research and Development Authority (BARDA), a newly created division within the US Department of Health and Human Services, set out to do precisely that. The agency produced a design for a ventilator that would be affordable, mobile, and simple enough to be stockpiled and quickly deployed. In project documents submitted to Congress, BARDA staff warned that current ventilator technology was too bulky, expensive, and technically difficult to operate. Soon thereafter, a private company was awarded a multi-million-dollar government contract to develop a more affordable and usable ventilator, and by 2011, it had presented a prototype to US government officials. In 2012, however, the company was acquired by a large medical-device manufacturer that produced “traditional” ventilators, as part of a wider process of industry concentration that has raised questions related to competition and antitrust law. The prototype project was eventually terminated, raising suspicions among government officials and other device manufacturers that the takeover bid had been motivated by precisely that goal. Owing to our reliance on market forces to allocate resources for innovation, we now only produce ventilators that are expensive, immobile, proprietary, highly technical, and difficult

to use, when what we really need are affordable, mobile, simple, user-friendly machines. In attempting to develop such a device, the US government relied on market mechanisms and profit-driven private firms whose incentives turned out to run counter to the interests of public health. The disastrous shortage of ventilators in the face of COVID-19 should make clear that, particularly in essential domains like public health, we need to rethink what we mean by innovation and how we direct and pursue it. We also need new international mechanisms to promote innovations that make technology more affordable, easier to produce and maintain, and simpler to use, rather than merely more profitable and more complex. A technology that was invented a century ago should not still be beyond the reach of most countries in the world. We are now learning that lesson the hard way.

Shamel Azmeh is Lecturer in Technology, Labor, and Global Production at the Global Development Institute at the University of Manchester.

THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

F E AT U R E

MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

Could pandemic lead to famine? BY KENT HARRINGTON

Despite US President Donald Trump’s claims, a pandemic has long been among the top threats listed by America’s intelligence community. But even the country’s best analysts could not foresee that it would happen under a leader willing to sacrifice so many lives on the altar of his ego. Intelligence agencies are used to making headlines when they fail to do their job. But after months of US President Donald Trump ignoring their warnings about COVID-19, and after years of his administration discounting their alerts about the danger of a pandemic more generally, it is time that intelligence professionals receive the credit they deserve. It should come as no surprise that Trump repeatedly dismissed intelligence about the threat of the coronavirus throughout January and February. Trump has long made clear that he has no patience for those who don’t pander to his views. When intelligence leaders contradicted him on several issues in their annual briefing to Congress last year, he told them to “go back to school.” This year, the bill for Trump’s war on intelligence is coming due in the form of lost lives and overwhelmed healthcare systems. US intelligence agencies had sounded the alarm and even provided the enemy’s battleplan, detailing precisely how a novel coronavirus pandemic would unfold. Still, the wannabe wartime president did nothing. Res ipsa loquitur – the negligence speaks for itself. Most Americans will never see the raw intelligence and in-depth analysis that the president receives every day, nor can anyone who is not on the front lines appreciate the sheer breadth of national-security challenges that intelligence analysts and officers must follow. That is why the public briefings by intelligence leaders are so important, especially when they expose the president’s own willful ignorance. Obviously, public briefings cannot lay out every detail about the issues the

intelligence community tracks. But as someone who worked on dozens of unclassified briefings at the CIA, I know that professional analysts do their utmost to portray classified findings accurately, even as they protect their sources and methods. Consider the annual threat briefing to Congress, which has been postponed indefinitely for this year. In delivering the assessment, the Director of National Intelligence offers a unified perspective drawn from a wide array of agencies whose primary job is to find facts and track their implications. In the 2019 briefing that so upset Trump, then-DNI Dan Coats reaffirmed the intelligence community’s conclusion that Russia had interfered in the 2016 election on Trump’s behalf, and warned that Trump’s bromance with North Korean dictator Kim Jongun had not diminished that country’s nuclear ambitions. More to the point, the DNI’s annual briefing has repeatedly warned about the risk of a global pandemic. The intelligence community first raised the alert immediately after President Barack Obama took office in January 2009, when then-DNI Dennis Blair testified that, “The most pressing transnational health challenge for the United States is still the potential for emergence of a severe pandemic, with the primary candidate being a highly lethal influenza virus.” Following the 2009

H1N1 (swine flu) outbreak, Blair doubled down in 2010, highlighting the potential for a pandemic to disrupt the economy. A “lack of consistent surveillance and diagnostic capability for diseases in animals,” he said, “undermines the United States’ ability to identify, contain, and warn about local outbreaks before they spread.” Blair’s successor, James Clapper, delivered the same message in March 2013, but also refined the US assessment of the threat with prescient detail. Pointing to the growing danger posed by zoonotic viruses, he warned that “an easily transmissible, novel respiratory pathogen that kills or incapacitates more than one percent of its victims is among the most disruptive events possible. Such an outbreak would result in a global pandemic.” In foretelling the COVID-19 pandemic exactly, Clapper made clear that, “This is not a hypothetical threat.” Trump received the same message in May 2017, when Coats highlighted a World Bank assessment predicting that a pandemic would cost the world around 5% of GDP. Coats then issued the same warning in 2019, testifying that, “The United States and the world will remain vulnerable to the next flu pandemic or large-scale outbreak of a contagious disease that could lead to massive rates of death and disability, severely affect the world economy, strain international resources, and

increase calls on the United States for support.” Is anyone surprised that Coats’s successor isn’t bothering with a briefing this year? But the DNI’s annual assessments aren’t the only unclassified briefings that show the extent of Trump’s negligence in the face of the pandemic. Every four years, the National Intelligence Council, the US intelligence community’s senior analytical body, produces Global Trends, a forecast of the forces likely to shape the decades ahead. The timing isn’t coincidental: the strategic outlook appears when administrations change, offering presidents a long-term international perspective with which to fashion or refurbish their national-security goals. Trump has described the COVID-19 pandemic as an “unforeseen problem” that “came out of nowhere.” The authors of the past three Global Trends reports would beg to differ, as would the hundreds of experts whom they consult in constructing their analyses. Consider the 2008 report, “Global Trends 2025,” which was all but oracular. “The emergence of a novel, highly transmissible, and virulent human respiratory illness for which there are no adequate countermeasures could initiate a global pandemic,” the authors warned. The threat, they added, would likely emerge “in an area marked by high population density and close association between humans

and animals, such as many areas of China and Southeast Asia.” Even with limits placed on international travel, “travelers with mild symptoms or who were asymptomatic could carry the disease to other continents.” From peddling disinformation about the virus to disbanding the National Security Council directorate overseeing pandemic threats, Trump has squandered multiple opportunities to get ahead of the COVID-19 crisis. The health and economic consequences that we are now experiencing have long been predicted. US intelligence analysts were warning about precisely this scenario for at least 12 years. But even they could not foresee that America would end up with a president willing to sacrifice so many lives on the altar of his ego.

Kent Harrington, a former senior CIA analyst, served as National Intelligence Officer for East Asia, Chief of Station in Asia, and the CIA’s Director of Public Affairs.

THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

F E AT U R E

MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

Will COVID-19 put us right with nature humans and nature. In a 2014 lecture, the science writer Stephen Petranek listed eight events that could end the world as we know it: pandemics, solar flares, giant earthquakes, volcanic eruptions, biological accidents, greenhouse effects, nuclear war, and a collision with meteors. Four of these would be “natural disasters” – that is, cataclysmic events which do not result from the way we order life. But the other four – pandemics, biological mishaps, nuclear war, and global warming – would result directly from the way humans interact with nature.

BY PROF. ROBERT SKIDELSKY

The COVID-19 virus, as frightening as it now seems, may ultimately fail to jolt humanity out of its profligate habits. But instead of regarding the pandemic as merely another problem requiring a technical fix, the world should see it as an opportunity to rethink humanity’s relationship with the planet.

One of the few things not in short supply in the COVID-19 era is commentary on the pandemic. Understandably enough, the virus has generated a non-stop flow of news about its spread, instructions on how to avoid and survive it, analysis of its causes and treatment, and conjecture about its impact on work habits, mental health, the economy, geopolitics, and much else. My own period of home detention has produced the following reflections, which I add with some diffidence to the chorus of expert voices. To begin with, I read Klaus Mühlhahn’s book Making China Modern. In Chinese cosmology, Mühlhahn notes, the human and natural worlds were inextricably linked. “When the proper order was respected, the physical world ran smoothly

and the human world prospered,” he writes. But, “when that order was not respected, anomalous or destructive events, such as earthquakes, floods, eclipses, or even epidemics, would take place.” In what sense might COVID-19 be the result of not respecting the “proper order” of things? In Chinese thought, the proper order is about proper rule, and this includes maintaining the right relationship between the human and natural worlds. A pandemic indicates that our way of life has come to violate that relationship. The health expert Alanna Shaikh thinks there will doubtless be many more epidemics as “a result of the way that we, as human beings, are interacting with our planet.” This includes not just human-induced global warming, which is creating a more hospitable environment for pathogens, but also our push into the world’s last wild spaces.1 “When we burn and plow the Amazon rainforest […], when the last of the African bush gets converted into farms, when wild animals in China are hunted to extinction, human beings come into contact with wildlife populations that they’ve never come into contact with before,” Shaikh says This includes closer-thanever encounters with bats and pangolins, both of which have been identified as potential sources of

COVID-19. So long as we fail to respect nature’s autonomy, nature will hit back. One can draw either large or small conclusions from this line of thought. The conclusion that Shaikh draws is a small one, perhaps because the broader inference is too unpalatable for most people. We need, she says, to build a global health system good enough to enable countries to respond quickly to epidemics and prevent them from becoming pandemics. Each country should be able to identify, quarantine, and treat its infected citizens immediately. One way to help achieve this, I think, would be for G7 governments to issue a global COVID-19 bond, with the proceeds going to a reformed World Health Organization that has a specific mandate to build up all countries’ medical capacities to developed-world levels. (Admittedly, even the latter has proved insufficient in the case of COVID-19.) This WHO spending should be in addition to the World Bank’s development expenditure. Shaikh makes another very sensible point. “Just-in-time ordering systems are great when things are going well,” she says. “But in a time of crisis, what it means is we don’t have any reserves.” So, if a hospital or a country runs out of personal protective equipment, it has to order more from a supplier (often in China), and wait for them to produce and ship the goods.

This critique applies to much more than medical procurement; it challenges the prevailing just-in-time orthodoxy in business. Reserves, the argument goes, cost money. Efficient markets don’t require firms to have inventories, but rather just enough “stock” to satisfy consumers at the point of demand. Holding financial reserves in case of a rainy day is also wasteful in this view, because in efficient markets there are no rainy days. So, firms should be leveraged to the hilt.

The COVID-19 virus, as frightening as it now seems, may eventually turn out to be so mild and controllable that it fails to jolt us out of our habits. Indeed, the psychologist and Nobel laureate economist Daniel Kahneman thinks that “no amount of psychological awareness will overcome people’s reluctance to lower their standard of living.” But we would be unwise to continue relying on technical fixes to get us out of any hole that our profligate lifestyles land us in, because sooner or later we will run out of medical solutions to the problem of “proper order.” We should use our enforced downtime to ponder what solutions would work.

This is fine as long as there are no unexpected events. But when the world experiences a “shock” like the 2008 financial crash, the efficient-market model collapses, and with it the economy. Something like this is happening to our medical services now. It follows that “just in time” needs to be replaced by “just in case.” Ideally, some global authority should keep a strategic reserve of medical supplies needed to support life for a limited period (say, three months) in the face of a specified set of public-health threats. This reserve should be financed by taxes levied on national governments in proportion to their countries’ national incomes. But such stockpiling can also be done nationally or regionally: the European Union would be an ideal place to start. None of this, however, addresses the far bigger question of the proper relationship between

Robert Skidelsky, a member of the British House of Lords, is Professor Emeritus of Political Economy at Warwick University. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour party, became the Conservative Party’s spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO’s intervention in Kosovo in 1999.

THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

F E AT U R E

MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

Post-Pandemic cities BY PATRICIA VIEL COVID-19 is forcing cities around the world to face the reality that they’re illprepared for emergencies. It’s time to reinvent the modern urban center with an eye toward fully equipped health systems and state-ofthe-art digital infrastructure that incorporates unanticipated risks. Our cities will not be the same after COVID-19. Nor should they be. In Italy, as elsewhere, the publichealth crisis has put us on the defensive. Our hospitals have been inadequate. And our cities, having been planned to meet our needs at a particular moment that looks nothing like the present, have fueled contagion. As a result, the coronavirus is shutting down the engine of ideas and interactions that drives social dynamism and economic growth: the urban center. And, because contagion may turn out to be a long-term or chronic threat, how to adapt urban design and management accordingly has become a salient question for architects. Planning correctly means designing an evolving system with limits and a clear view of risks. The lack of hospitals has led to a frenetic and costly race to build them in places not designed with health in mind. In Italy, the government already has considered building hubs in the center and south of the country where health infrastructure is weak. And yet more than 75% of Italy’s COVID-19 cases have occurred north of Tuscany, where, even with the country’s most sophisticated health infrastructure, the region was overwhelmed by the need for urgent care. In Milan, the exhibition center Fiera Milano City has been transformed into a 25,000-square-meter (269,000 square feet) emergency intensive-care facility. But what if it was initially designed not only for its primary purpose, but also with response to a possible crisis in mind? It is clear that we cannot build urban spaces with a single function if we want them to be useful in emergencies. The “unthinkable” must be part of good urban design practice from now on. After all, more than half of the world’s population inhabits

cities, which are no less fertile ground for viruses than they are for terrorists. That is why urban areas must consider prevention, in addition to being more “crisis-ready.” As Robert Muggah and Rebecca Katz recently argued, cities need a pandemic preparedness map. After all, as we are now seeing, the design of cities and how they are inhabited often exacerbate the problem of infectious disease. There is now a pressing need to bridge the technical and regulatory gaps in urban planning. Collaborative efforts by designers, logistics specialists, and security experts must establish guidelines and define best practices. Architects and planners need to rethink shared spaces, public or private, to make them controllable, manageable, and able to be immediately re-purposed in an emergency. We need to address flaws in digital infrastructure, too. It has become even more evident how vital the data we produce is for governments’ efforts to assess and forecast

the virus’s spread and mitigate its impact. We routinely turn over our data to private companies to use for commercial purposes, yet we consider government use of the same data an invasion of our privacy, even though all governments are mandated to defend us from threats to our security, health, and welfare. A post-coronavirus approach to urban design should integrate the data we produce with our electronic devices into the Territorial Information System. But that requires digitalizing the countries where they are located. Italy is paying a high price for its chronic delay in nurturing a digital culture. COVID-19 is exacerbating the socioeconomic gap between people who, thanks to financial means and digital education, have access to the Internet and other electronic tools, and those who don’t. The predictable result of this is discrimination, marginalization, and growing distrust of government and other institutions. Moreover, Italy’s digital infrastructure is old. A network that offers access

to e-commerce websites or streaming video is not enough anymore. While countries around the world are considering remote patient monitoring or autonomous health checks, Italy is still struggling to digitalize public institutions. We need a network that can place Italy at the same level of digitalization as any European country. And the European Union itself should be a promoter of standardization – as it was in creating an internationally recognized food safety system. This would facilitate diffuse digitalization, data sharing, creation of advanced technologies, and tools that promote the public good. For many, the EU’s lack of a well-coordinated, multitiered, continent-wide response has highlighted its shortcomings as a guardian of Europeans’ wellbeing. But the truth is that a formulaic emergency response is not sustainable anymore. One of the pandemic’s most important lessons is that we need to go beyond the traditional “project” approach and

learn how to plan in a complex, collaborative, interdisciplinary way that accounts for our evolving perception of risk. We Italians have learned from the crisis that cities can think and feel collectively. In these long, house-ridden days, we have realized – some of our young people perhaps for the first time – that citizenship entails obligations as well as rights. And today, in the midst of a historic tragedy, the most fundamental obligation of all is to rethink our future.

Patricia Viel is an architect and co-founder of the international architecture and design firm Antonio Citterio Patricia Viel.

THEBUSINESS24ONLINE.NET

MONDAY APRIL 20, 2020

20 MONDAY APRIL 20, 2020

THEBUSINESS24ONLINE.NET

Drive Assured with 5 years Life Insurance Cover from Allianz Life, on any vehicle purchased at CFAO Ghana.

cfao underwritten by

Benefits include • 3 years premium fully paid by CFAO • A cash back benefit upon maturity if there are no claims • Full cost of vehicle paid out as full benefit

Terms and conditions apply

ACCRA, KUMASI, TAKORADI Tel: 0302 742 100 email: salesgh@cfao.com

ALLIANZ LIFE Tel: (+233) 302 267 892, 0244 757 878 allianz.ghana@allianz.com