Uncertainty Shocks in Africa: Impact and Equilibrium Strategies for Sound Economic and Social Development

244 Pages·2023·8.786 MB·English

by  Giuseppe T. Cirella

Advances in African Economic,
Social and Political Development
Giuseppe T. Cirella   Editor
Uncertainty
Shocks in
Africa
Impact and Equilibrium Strategies
for Sound Economic and Social
Development
Advances in African Economic, Social
and Political Development
SeriesEditors
DierySeck,CREPOL-CenterforResearchonPoliticalEconomy,Dakar,Senegal
JulietU.Elu,MorehouseCollege,Atlanta,GA,USA
YawNyarko,NewYorkUniversity,NewYork,NY,USA
Africa is emerging as a rapidly growing region, still facing major challenges, but
withapotentialforsignificantprogress–atransformationthatnecessitatesvigorous
effortsinresearchandpolicythinking.Thisbookseriesfocusesonthreeintricately
related key aspects of modern-day Africa: economic, social and political develop-
ment. Making use of recent theoretical and empirical advances, the series aims to
provide fresh answers to Africa’s development challenges. All the socio-political
dimensionsoftoday’sAfricaareincorporatedastheyunfoldandnewpolicyoptions
arepresented.Theseriesaimstoprovideabroadandinteractiveforumofscienceat
work for policymaking and to bring together African and international researchers
and experts. The series welcomes monographs and contributed volumes for an
academic and professional audience, as well as tightly edited conference proceed-
ings. Relevant topics include, but are not limited to, economic policy and trade,
regionalintegration,labormarketpolicies,demographicdevelopment,socialissues,
politicaleconomyandpoliticalsystems,andenvironmentalandenergyissues.
Alltitlesintheseriesarepeer-reviewed.ThebookseriesisindexedinSCOPUS.
* * *
Giuseppe T. Cirella
Editor
Uncertainty Shocks in Africa
Impact and Equilibrium Strategies for Sound
Economic and Social Development
Editor
GiuseppeT.Cirella
FacultyofEconomics
UniversityofGdansk
Sopot,Poland
ISSN2198-7262 ISSN2198-7270 (electronic)
AdvancesinAfricanEconomic,SocialandPoliticalDevelopment
ISBN978-3-031-21884-2 ISBN978-3-031-21885-9 (eBook)
https://doi.org/10.1007/978-3-031-21885-9
©TheEditor(s)(ifapplicable)andTheAuthor(s),underexclusivelicensetoSpringerNatureSwitzerland
AG2023
Thisworkissubjecttocopyright.AllrightsaresolelyandexclusivelylicensedbythePublisher,whether
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ai miei
Foreword
ItgivesmegreatpleasuretoacceptProf.Dr.GiuseppeT.Cirella’sinvitationtowrite
this Foreword and to provide useful suggestions to better understand the scope of
this book. As a welcomed addition to the Scopus-indexed Springer book series,
AdvancesinAfricanEconomic,Social and Political Development,this bookspans
innovative COVID-19 era findings and pieces together several important case
studiesinthesciencesandsocialsciences.Sincehumansocietysurvivesfromnature
andcivilizationissustainedbynaturalresourcesandenvironmentalservices,mostly
provided for free, nature’s resilience, adaptability, and renewability evolve in a
sustainable manner when human disturbancesdo notexceed thecarryingcapacity.
Astheworldexperiencedthefirst2yearsoftheCOVID-19pandemic,itwitnessed
economiesdecimatedandbroughttoastandstill.Theeconomicshocksaffectedthe
mostviable,economicallyresilientcountriesandalmostparalyzedthoseoflowand
medium-income. Although COVID-19 is yet to recede completely from our socie-
ties,aswestillexperiencesomeflashwaves,almostallcountrieshavepassedtheir
peakperiodsfacedin2020and2021.Countriesarenowtryingtorebuildeconom-
icallyandsocially,inthewakeofthecolossaleconomicdownturnsexperienced,just
astheywould,fromapost-disastersocioeconomicrecoveryfollowingmostnatural
disasters that negatively impact and harm a community. Evidence has shown that
low and medium-income countries, especially sub-Saharan Africa and East Asia,
suffered huge economic woes during and directly after the pandemic, especially
those that derive a large percentage of their gross domestic product from transport
and tourism. This is not unconnected with the fact that apart from bad governance
whichprecedesthepandemic,particularlyinAfrica,politicalcrisis,securityfragil-
ity,andeconomicweaknesswerealreadypronouncedbutweremadeworsebythe
adventofCOVID-19.
In a corroborative contribution to post-pandemic socioeconomic recovery, this
bookisacross-fertilizationofideas,models,empiricalresearch,andopinionsfrom
well-rounded researchers who originate from or have extensive experience on the
African continent. This book’s title, “Uncertainty shocks in Africa: Impact and
equilibrium strategies for sound economic and social development”, is timely and
vii
viii Foreword
focuses on two important interlinking parts to a prosperous post-pandemic Africa.
Thefirstpartexamineshownewurbanthinkingcanengendersustainableadvance-
ment, while the second comprehensively looks at how social development
programmes and practices can bring post-COVID-19 community robustness for
sustainable progress in Africa. Crossbreeding of ideas from experts on strategies
for economic recovery from East to West Africa, how small and medium scale
enterprises can survive post-COVID-19 shocks, and how strategies for building
green cities and strategic urbanization combine to engender post-pandemic eco-
nomicsurvivalandresilienceinAfrica,isdiscussedinagermaneandcontemporary
manner.Asidefromtheastronomicalriseinintimatepartnerviolencebroughtforth
byCOVID-19,thisall-importantbookalsooffersstrategiestotacklethisaswellas
how modern contraceptives can be more readily available for economic and social
wellbeingfromabottom-up,grassrootsperspective.Linkages among severalother
aforementioned socioeconomic topics and how they can combine to help Africa
achieve Agenda 2063 are brought to the fore of this book. The uncertainty shocks
fromtheCOVID-19pandemiccreateddifferentsecond-momentshocksthatareboth
positive and negative, warranting a clear understanding of their impact and how
futurestepsshouldbeconsidered.Inconclusion,thisbookisamustreadformacro
volatilityresearchersseekingrobustlygeneratedfirsthandandempiricalcorrelations
forthefuturedevelopmentofAfricaandforfutureshocksshapedbytheeffectsand
experiencefromtheCOVID-19crisis.
DepartmentofEconomicsand PaulO.AdekolaPh.D.
DevelopmentStudies,Demographyand
SocialStatisticsProgram,Collegeof
ManagementandSocialSciences,
CovenantUniversity,Ota,Nigeria
CentreforEconomicPolicyand
DevelopmentResearch,
CovenantUniversity,
Ota,Nigeria
DepartmentofLifeSciences,Research
CentreforAnthropologyandHealth,
UniversityofCoimbra,
Coimbra,Portugal
Preface
“Uncertainty shocks in Africa: Impact and equilibrium strategies for sound eco-
nomicandsocialdevelopment”isabookthataimstointegrateaninterdisciplinary
approachtounderstandhowtobestmitigatetheCOVID-19crisisaswellasreduce
future shocks to the continent. Over the last half century, uncertainty appears to
noticeably increase after major economic and political shocks occurred. The vola-
tility and shock experienced from COVID-19 has been worldwide. This book
focuses on the African experience, i.e., specific to economic and social impacts
over the last 2 years, by examining the drop and rebound effect different African
countries endured during the pandemic. Core expertise integrates aspects of eco-
nomics, human geography, sociology, urban planning, and development studies,
using scientific methods to explain the strain on societies as well as the goals for
futuresustainablepractice.Experiencefromshockscanbeusedtoreacttoacurrent
situationaswellasprepareforshortages.Caseresearchexploresthefuturecarrying
capacity of African communities and the economic impact caused from scarcity.
This can aid in building stronger, more resilient economies with protective safe-
guards.ThisbookaddstotheknowledgebaseofhowtobuildamorerobustAfrica
with sustainable solutions working in tandem with vibrant and robust economies.
Commonsensesocialstrategiesgohandinhandwithtrackableshockedeconomies
viafirst-andsecond-momentreactions.Keytopicsfromthisbookincorporateanew
urban thinking for economic revival, developing sustainable economies post-
COVID-19,understandingsocialpracticesduringacrisis,anddevelopingcommu-
nity robustness from the experience of shock events. Policymakers, academicians,
and students wishing to advance their knowledge in African economic and social
development as well as crises advancement from uncertainty shocks will find this
bookparticularlyvaluable.
This book pieces together connections relating to lockdown measures, crisis
causation, and shock impact most countries faced dating back to 2020. Specific to
Africa, it explores how countries dealt with the COVID-19 crisis and how it, i.e.,
case-specifically,affecteddifferentaspectsofdifferent economiesandsocialstruc-
tures. Uncertainty shocks, in this setting, interrelate via an umbrella effect by
ix
x Preface
overlaying related first- and second-moment reactions during the crisis. This book
distinctivelyexplorescrisesmanagementinAfricabymakingsenseofthecauseand
effectaswellasreactionaryresultsfromapre-,during,andpost-pandemicperspec-
tive with the underlying goal of limiting the impact of future shocks. It tests the
theoriesofimpactshocks onselectedAfrican countries that experienced economic
and social decline and, in a general sense, evaluates the impact of shocks via a
sustainablegrowthandchangeapproach.Itisreasonabletostate,theeconomicand
socialshocksdiscussedarenotlimitedtoeconomistsandsociologists,instead,they
magnify to include policymakers and everyday people. The COVID-19 era has
produced an economic and social crisis that has spread throughout society with
adverse effects on consumers, investors, community development, and societal
wellbeing. An examination into the negative shocks on supply and demand and
the left tail risk of moving forward is considered imperative for much of the
continent’s economies. The impact of the first-moment shock in 2020 and the
economic shutdown is assessed and raises important questions about the future.
What will be the genesis and long-term impact of permanent supply and demand
difficulties in different African countries? Will it take the shape of economic
uncertainty, or has the COVID-19 era become a launching pad that will drive new
sustainableeconomicinitiatives?Observinghowhumanbeingschangetheenviron-
ment and, specifically, how population growth and urbanization negatively impact
nature,recentshockedeconomiesandsocialupheavalinAfricaindicateacrossroads
momentforthecontinent.Thisbookfacilitateslearningfromthecrisis’supplyand
demand disruptions as well as social mishaps to better inform the economies and
societies of Africa, and beyond, to take a longer view of how to protect from and
prepareforfutureshocksatagenerationallevel.Thisbookisdividedintotwoparts;
first, it looks at shocked economies in terms of urban thinking and sustainable
advancement,andsecond,itexploresshockedsocialdevelopmentandmechanisms
toimprovecommunityrobustness.
PartIopenswithsevencontributionsthatexamineurbanization,macroeconom-
ics, city development processes, green city strategies, and specific sectors of the
economy such as finance and tourism. These contributions interconnect with the
shocked economies conceptby demonstrating how the COVID-19 pandemicpara-
lyzed urban centers and the mobility of people. “Urbanization Motif, COVID-19,
and Economic Revival: Exploratory Research from Addis Ababa, Ethiopia” uses
primaryandsecondarydatatoundertakeanempiricalexaminationofthecityscape
urbanizationprocessAddisAbaba,Ethiopia,facedinthefirstyearoftheoutbreak.
From an economic viewpoint, sub-city district differences are analysed using the
generalized method of moments estimator, the limited information maximum like-
lihood estimator, and an ordinary least squares regression model. Affected sectors
include health services and tourism while information and technology, entertain-
ment, and Internet-based industries fared better. The findings suggest that Addis
Ababa’sCityCenterrecoveredataslowerratewhencomparedtoitsoutersub-city
districts.“LessonsforSub-SaharanAfrica:UsingtheDevelopmentModelfromEast
AsiainNigeria,1965-2015”isprimarilyahistoricallookathoweconomicindica-
tors in East Asia could benefit sub-Saharan Africa. In search of a common