Japan, a tea-drinking nation, is one of South Africa’s biggest importers of rooibos tea. In 2018, a record high of 2,000 tonnes of the homegrown blend was shipped off to the land of the rising sun.
A tea room filled with reverence for the traditional Japanese tea ceremony.
But first, the facts. To understand tea-drinking in Japan, it is important to go through the following motions, starting with the communal practice known as chadō (the way of tea) that is older than 800 years, in which, in a hand-decorated cast iron bowl, green powder, known as matcha, is whisked to make a dark green tea to be offered to guests.
Tea was first brought to Japan from China in the seventh century for medicinal purposes, and was regarded as a commodity that was exclusively accessible to the noble and elite.
According to Japanese historical beliefs, Myōan Eisai, a Buddhist priest who introduced the school of Zen Buddhism to Japan, was one of the first to inculcate the culture of tea in Japan.
He wrote a book on the health benefits of drinking tea, as well as the cultivation and preparation of green tea.
By the thirteenth century, the tea drinking culture grew in popularity among warriors and the elite, and by the sixteenth century, tea had become a favorite for all social classes.
Tea schools opened and the art of making tea gradually evolved to more than just being a spiritual practice in Japan.
It became one of respect with shared peace and friendship.
The tea room is traditionally surrounded by a garden with a tranquil atmosphere, emphasized by dull flowers without strong scents, to avoid distraction.
A low entrance into the tea room suggests that guests are to bow as a gesture of respect for the ceremony.
Every movement, gesture and aesthetic, from the preparation to the enjoyment of the tea, is designed to express friendship and harmony. Guests watch on as the host shares the moment and finally presents it to them, kneeling on cushions.
Once the bowl has circulated among the guests, it is handed back to the host.The tools are cleaned and the ceremony is closed.
The Red Bush
Over 14,000kms away, across the Indian Ocean, a South African enjoys a hot cup of ‘red tea.’
Its preparation may not be as dramatic as it is in Japan, but it evokes the same sense of calm and serenity. It’s simply made by adding tealeaves or a tea bag into a cup of boiling water, a few teaspoons of sugar and having “a date with time”, as Swaady Martin, the founder of Yswara, an African tea and teatime company, puts it.
Martin, who has been in the tea industry for seven years, with a focus on gourmet African teas, has tasted and sourced blends from Malawi, Kenya and Rwanda but the South African rooibos is her favorite.
“Rooibos is not a tea, it is a plant. I find it a miraculous and wonderous plant. The fact that it only grows in one region of South Africa, and that it has all these incredible properties, makes it a plant I love dearly. I drink rooibos almost every day,” she says.
Located in the heart of Johannesburg’s central business district (CBD), Martin’s tea room, which is currently being refurbished, embodies what she calls a meditative appeal that coincides with the tranquil properties of tea.
Tea lovers step into a room filled with silence and walls done up in light pink hues representing a sunset in the desert.
This is to encourage focus on the tea, as it represents the removal of barriers between the different social classes.
“We have suffered in South Africa and also around the world, with so much exclusion, the one thing that was important for Yswara was to give inclusive luxury. For me, inclusiveness means being in a place where everyone could have access.
“Being in town (CBD) was just that expression of being in the midst of everything and everyone; and at the junction of what represents the new South Africa,” Martin says.
A South African Rooibos Council (SARC) industry fact sheet published in 2018 states that the country’s geographical areas provide the perfect environmental conditions for rooibos cultivation.
The plant can be found in the Cederberg and Sandveld regions of the Western Cape and the Bokkeveld area of the Northern Cape.
“The vital characteristics of this environment are the Mediterranean climate with a winter rainfall between 200mm and 450mm per year; deep, coarse and acidic sandy soils; and temperatures that can range from zero degrees Celsius in winter months, to up to forty-five degrees Celsius in summer,” the report says.
Due to the indigenous properties of the Rooibos bush, industry regulations stipulate that the term ‘rooibos’ be used responsibly.
“The terms ‘Rooibos’, ‘red bush’, ‘Rooibostee’, ‘Rooibos tea’, ‘rooitee’ and ‘Rooibosch’ may only be used when the dry product, infusion or extract is 100% pure rooibos. Furthermore, the notice stipulates that the above terms (referring to rooibos) can only be used when the product was grown in the geographic area as described in the application, i.e., the winter rainfall area of South Africa,” the SARC report states.
This uniquely-grown product is becoming a big deal across the globe, and the tea-drinking nation, Japan, has fallen in love with the health benefits that the South African tea provides.
In 2016, rooibos exports increased to over 30 countries across the globe; with Germany, Netherlands, Japan, the United Kingdom and the United States (US) being the biggest importers.
In 2018, one of the largest tea-drinking nations recorded over 2,000 tonnes that were shipped into the Japanese shores, making it the largest export since rooibos was first introduced to the Japanese 39 years ago.
For Martin Bergh, the Managing Director of Rooibos Limited and the Chairperson of the SARC, the tea has been up against competition in the Japanese tea market, which has over 26 different types of teas to consume, ranging from the traditional green tea varieties to Jasmine and Barley, or the sacred Mugicha.
“The general trend toward natural health and wellness products continue to exert a growing influence on purchasing patterns in the region and as more of Rooibos’ health benefits become known in the East, we anticipate the demand for the product to grow,” says Bergh.
Bergh points out that the Japanese are purists and therefore prefer to drink rooibos tea unflavored, without milk or sugar.
“In the past, rooibos was consumed more in summer for hydration, but has now become an all-year-round tea product consumed by all age groups. A market as big as Japan’s 126 million-strong tea-loving population, is always eager to experiment with new products.
“Local retailers like Peacock Coffee & Tea Traders have adapted to the experimental flavors to quench the insatiable thirst of the local and international market.”
Kelebogile Monyaysi, the manager at Peacock Coffee & Tea Traders in Rosebank, Johannesburg, attentively prepares a cup of tea when we visit.
The loose tea leaves are cautiously stirred in a tea pot and served at a small coffee table.
One half of the store is dedicated to coffee and the other for tea.
The smell of freshly-brewed coffee overpowers the aromatic smell of tea.
Tea sets range from vintage English style ceramics to Japanese cast iron teapots.
A selection of rooibos tea blends with various flavored options, ranging from organic rooibos to creamy caramel, as well as herbal blends.
This includes a Nelson Mandela range.
The caffeine-free tea, according to Monyaysi, is popular in the Japanese markets because of its natural healing qualities.
Despite coffee being a popular beverage for sit-in customers, rooibos tea is the most sought after locally too.
“It (rooibos) is the center of attraction. This is a word that they (tourists) can grab and not forget, so when they walk in here, it is all they ask for,” she says.
It took some time for Monyaysi to be stirred by tea.
“I was not much of a tea-drinker. I only started to enjoy tea when I began working here. Now, the first thing in the morning, I have to drink a cup of tea and in the evening, before I go to bed. It is a habit – if I don’t drink tea, I get a headache,” Monyaysi says, preferring the original rooibos blend.
Jessica Bonin, the founder of Lady Bonin’s Tea, a Cape Town-based company that sources, blends, packages and distributes full leaf teas, either loose or in biodegradable tea bags, offers more on the world’s fetish for rooibos.
Lady Bonins’ teas and herbals are sourced locally and internationally from farms that are organic without adding additives or products that harm the environment.
The rooibos is sourced by using a method known as “wild pickings” – the process of collecting the rooibos that grows naturally in the mountains. Due to the increase in demand for rooibos and rooibos products globally, commercial farmers have scaled production unsustainably, leaving environmental and societal damage in their wake.
Bonin says that in countries like Japan and Thailand, black tea is preferred, and it is predominantly used for the health benefits – making it a herbal infusion.
“They are buying it solely on the principle that it is a caffeine-free, non-tea beverage. People are buying it as an alternative and they are transfixed by its health properties.
“It is enabling people who naturally use plants as medicine for many years. In any Western country, you will need to justify the health benefits, but in the Asian countries, it is the medicine they are interested in. People are very healthy in Japan,” she says.
Although Bonin is facing difficulties entering the export market in Japan due to the high number of monopolies and conglomerates in the industry, small amounts of exports also go to Germany and the US.
Rooibos is a unique product that has infused the signature South African taste and its ambience with the rest of the world.
The Japanese may have their unique tea-drinking ceremonies and traditions but in Germany and the other countries that import the plant in millions, rooibos offers a cupful of experience that is incomparable and uniquely South African.
– Gypseenia Lion
The Turn of Events: Will Local Tourism Lead The Recovery Of The MICE Sector?
With the grounding of the global aviation industry, the money-spinning meetings and events sector is also on a downward spiral. Will local tourism lead its recovery?
Mauritian bride-to-be, Olivia Maurel, was all set for the wedding of her dreams at the end of April. But with Covid-19 playing party pooper, she had to make the heart-rending decision of postponing her nuptials. With three-quarters of her guest-list expected to fly into the sunny island of Mauritius, from every corner of the globe, she had no other option.
“The risks of countries closing borders and key people, such as my fiancé’s grandmother, being unable to come from England, was a huge motivator for us to [postpone],” says Maurel.
The billion-dollar global wedding industry will probably not see any big bridal gatherings for months to come. The cognac and crystal will have to wait so long as Covid-19 is the only attendee that has RSVP-ed.
With the coronavirus cancelling significant conferences and business gatherings worldwide such as the Adobe Summit and the Game Developers Conference; as also mega sports, social and entertainment events such as Coachella, the Cannes Film Festival and the 2020 Tokyo Olympic Games, the meetings, incentives, conferences and exhibitions (MICE) industry is facing the annihilating prospect of empty venues and nil revenue. Closer home, in Africa, events such as IAB Bookmarks Awards and Summit; and lifestyle and entertainment events such as AfrikaBurn, the Cape Town International Jazz Festival and the Bushfire Festival hosted in Swaziland every year, have all been casualties. And alongside that reality, life-changing events such as graduations, anniversaries and funerals are now being conducted on laptop screens.
The meetings and events industry has been impacted disproportionately by the virus. Unlike many other economic activities, the events industry is based on physical interaction between people. It’s a type of tourism in which conventions of large groups, usually planned well in advance, are organized at a physical destination.
Securing major conference events can benefit the local economy of the host city or country – particularly attracting business travelers. Research shows that business travelers are the golden goose in the travel industry. Unlike leisure travelers, they, or their sponsors, often spend more money.
According to the South African Tourism (SAT) board, the events industry, directly and indirectly, sustains more than 250,000 jobs and contributes an estimated R115 billion ($6.2 billion) to the country’s economy.
“Every year, South Africa hosts 211,000 regional, national and international meetings, conferences and exhibitions,” says the CEO of SAT, Sisa Ntshona. “The industry has undoubtedly been heavily hit by this pandemic, which also has negative bearings on employment and the continuity of businesses in the tourism sector.” Annually, the country attracts a million international delegates for business.
As the virus continues to sweep the continent, abandoned halls and venues are being transformed into field hospitals to be used as treatment centers for patients. South Africa’s minister of health Zweli Mkhize announced in May plans to convert the Cape Town International Convention Centre to become a temporary hospital with 857 beds for patients unable to effectively self-isolate until they are no longer infectious. This comes after the FNB Stadium in Johannesburg was earmarked for the same.
A report issued at the end of March by the World Tourism Organization (UNWTO) estimates international tourist arrivals could decline by 20% to 30% in 2020 based on the latest measures taken by governments, businesses as well as the patterns observed from previous global crises. The impact thereof translates to a loss of $300 billion to $450 billion in international tourism receipts (exports). Ntshona cautions to interpret data prudently given the magnitude, volatility and unprecedented nature of the crisis. “The true effect may only be accurately calculated and reflected much later,” he says.
It’s crucial to understand how Africa was positioned pre-pandemic. Henk Graaff, who runs SW Africa, a boutique destination management company in Johannesburg specializing in inbound tourism in the MICE, luxury, golf and leisure travel segments in Africa, affirms the continent has been an attractive destination for tourists, corporates, event planners, weddings and honeymoons. Countries such as South Africa, Namibia, Botswana, Victoria Falls (Zimbabwe and Zambia), Zanzibar (Tanzania), Kenya, Rwanda and Uganda were seeing increased interest and growing in popularity as events destinations.
It’s unsurprising as Africa offers a vast array of exceptional, customized and personalized locations that exceed expectations. This is strengthened by improved infrastructure, accessibility, expansion of flights and connectivity services within the region from major source markets such as Europe, Asia and America. Attractions such as the wilderness, the Masai Mara and the mountain gorillas of East Africa are now easily accessible.
But at this time, businesses such as SW Africa are strained and seeking relief. “We received both cancellations and postponements, some of which led to demands for refunds from us and in turn from our suppliers, some of whom have been more flexible than others, leading to tension in supply chain relations,” says Graaff.
He is pleading with suppliers to become ultra-flexible post the lockdown with regards to price, pre-payment and cancellation terms. He believes this will minimize or eliminate the perceived risk in the eyes of potential clients, who will be both relatively budget-conscious and risk-averse.
Maurel was luckier as her suppliers were more accommodating. “Thankfully, everyone has been super-understanding, and we’re all working together to find something that works for everyone’s schedules,” she says. “Luckily, my wedding dress wasn’t finished when lockdown started, so it’s still at Robyn Robert’s studio – if it hadn’t been, I would’ve been so tempted to run around in it and have a Friends moment!”
However, some suppliers in the value chain are grappling with an even tougher predicament. According to the International Air Transport Association (IATA), no airline, regardless of how well-capitalized, would be able to absorb the impact of the Covid-19 groundings for a prolonged period. The government-imposed travel ban, social distancing and maximum limits to gatherings have caused a steep decline in passenger demand for air flights to which airlines have responded by reducing their scope of operations and costs. Many airlines have been forced to park their fleets, with most seeking financial support and debt relief measures amid the low, in some cases, non-existent demand.
All African countries will feel the impact relative to the scope of their aviation industries, according to aviation specialist and analyst, Joachim Vermooten.
“The regulatory imposition of travel bans to and from specific states and later to airline operations have brought most scheduled commercial airline operations to a halt. Some one-way directional charter and cargo opportunities have arisen, but these are insufficient to maintain any scale of network operations,” says Vermooten. As a result, airlines are now focused on cash retention and several relief measures, including compulsory leave for staff and issuing travel vouchers and re-bookings, instead of ticket refunds to customers. The battle is uphill as several African carriers have remained financially distressed ahead of the pandemic. Air Namibia and South African Airways (SAA), for example, have been facing severe operating issues.
As global citizens navigate the new ways of engaging and working during the lockdown, technology has been both an aid and a threat to the tourism and MICE sector.
Organizations and individuals have embraced and leveraged technology to facilitate interactions. This includes the massive adoption of tools such a Zoom, Microsoft Teams and Skype. We are also seeing national tourism boards innovating through virtual reality to give travelers delightful “insperiences” from the comfort of their quarantined corners.
To avoid minimum job losses and devastating economic damage, South Africa’s department of tourism has made R200 million ($10.8 million) available to assist small-medium enterprises (SMEs) in the tourism and hospitality sector who are under particular stress due to the lockdown restrictions.
In addition, SAT is in the process of developing an industry-wide recovery plan. “To ensure that this plan is robust, we are consulting the tourism sector from the large listed players to the SMEs to input into this plan. This plan will be a blueprint on how we move forward as an industry,” Ntshona says.
With the end of the pandemic indeterminable, it’s currently impossible to speculate what lies on the other side. Due to seasonality and strong preventative measures taken by most African governments, the entire continent has the least positive cases and deaths from Covid-19 than other sovereign states. This might be advantageous for marketing African destinations to be considered relatively safer during the recovery phase. “At the heart of our recovery, will be domestic travel,” says Ntshona.
Even so, domestic travelers may initially favor alternative modes of travel to air, such as motor vehicle travel, further adding strain to the aviation industry.
This is echoed by Graaff who believes domestic travel will lead the recovery, and then demand will expand to neighboring destinations and eventually further afield.
It may be a while before a new recovery path is defined, but for now, everything hangs in the air.
– Mashokane Mahlo-Ramusetheli
Start Of The Mask Economy
Even the most unconventional businesses, such as a Cape Town candy shop, are selling masks to face off the economic crisis.
In less than three weeks, ProudlySA’s newly-launched online portal for local manufacturers of masks hit 400 sellers. Collectively, these mask-makers have the capacity to produce around 14 million masks per week, says ProudlySA’s Deryn Graham, and those are only the manufacturers registered to the clothing sector’s National Bargaining Council.
Masks are a necessary accessory in the fight to prevent Covid-19 from spreading and companies around the world are shifting their core operations to crank out personal protection equipment (PPE).
Besides high-end designer brands like Louis Vuitton and Chanel now making eye-catching masks, many African businesses are pivoting their core operations to keep their businesses afloat.
“I decided to make masks purely to access a new revenue stream. I had been able to sell my socks online during the first level of lockdown, but I wasn’t authorized to ship them as they weren’t classified ‘essential goods’,” explains Chelsey Wilson, FEAT. sock co.’s co-founder and designer from Cape Town. What was holding Wilson back, initially, was that she didn’t want to make masks using generic, store-bought fabric.
“I wanted to keep true to my brand, which is all about bold and unique prints… I had to use custom-printed fabric I already had that made around 100 masks which all sold out in the space of three hours,” says Wilson, adding that given the demand, she should be able to sell around 300 masks a week going forward.
Jinae Heyns is the co-owner of Matsidiso, an ethical footwear and accessories brand with flagship stores in Stellenbosch and De Waterkant in Cape Town. For her, making masks was not a choice, it was a matter of survival: “We didn’t want to just make masks, we wanted to ensure that we were able to feed our team and do our part to support those who cannot easily afford or access proper masks.”
Matsidiso currently sells around 8,000 masks a month. Elastic is in low supply countrywide and what is left is being reserved for the medical industry. Matsidiso, which operates out of a family-run dancewear factory, uses lycra for their mask ties: “I care deeply about sustainable practices, and with masks, it’s no different. We have the material in-house,” adds Heyns.
Wendren Setzer from The Wren Design, a Muizenberg-based South African company that hand-makes environmentally-friendly bags and accessories using recycled cement packaging paper, had a unique challenge. With the capacity to create 1,000 masks a week, Setzer’s first obstacle was developing a paper prototype.
“We wondered how we could make a face mask out of paper? Several prototypes later, we developed two unique mask patterns. We also researched coatings and found a way to coat the paper to offer more – the paper is coated with Si02 and a second layer of SiAg02 is applied making the surface anti-microbial,” explains Setzer.
Although Cheaky Co traditionally sells confectionery, Lucas R Adams, its founder and Sea Point-resident in Cape Town, decided to launch two different masks into his online store.
“We’ve been selling weekly quantities within the hundreds,” says Adams. “There’s obviously been a massive spike in the production and sale of fabric face masks by those within textiles, but it soon dawned on us we hadn’t yet seen anyone within the food category offering them, so we thought, ‘why not add a small range for our community’? In the end, we thought that offering the option to add a mask to one’s cart when shopping our plant-based treats was a no-brainer…”
For many small businesses, the decision to make masks is the only way to potentially weather the pandemic. It’s about turning non-essential production lines into essential manufacturing businesses.
According to a Stanford University study, masks are the first step in reopening the economy (and may help with transitioning into a post-Covid world).
“These business owners are not only fighting for themselves; they do what they do to a great extent to ensure the safety of their entire team and because they want to see South Africa thrive. At the end of the day, these aren’t just masks, but actual protective gear that could help save a life,” ends Heyns.
Fast Virus. Slow Growth: Ghana And Nigeria Brace For The Economic Nightmare Ahead
Ghana and Nigeria brace for the economic nightmare ahead, even as the region’s billionaires, entrepreneurs and innovators chip in for the fight against Covid-19.
The Labadi Beach Hotel, set amidst landscaped tropical gardens in the heart of Accra, is unusually quiet on the Tuesday morning FORBES AFRICA visits in mid-March. The usual bustle of the morning breakfast buffet frequented by the city’s elite has all but disappeared, and in its place, an air of uncertainty about the future of one of Accra’s longest-running hotels, at least in the interim.
You cannnot enter without going through the new mandatory protocols in place: hand-sanitizers, individual temperature screenings and metal detectors.
“Unfortunately, we are no longer accepting outside guests and the hotel will be closing until further notice,” says the bartender. The usually-packed lobby has only two in-house guests already scheduled to leave the hotel.
Ghana’s thriving hospitality industry was one of the first victims of the outbreak of the Covid-19 pandemic, once President Nana Akufo-Addo banned mass gatherings and ordered the closure of airports. Hotels in the Greater Accra region closed down, sending thousands of workers home, and leaving management to contend with the challenge of paying salaries and taxes sans customers.
It’s in stark contrast to 2019, when Ghana’s international PR campaign, The Year of Return 2019, brought in an additional 237,000 visitors representing an estimated $1.9 billion into the economy, according to Barbara Oteng Gyasi, Ghana’s Minister of Tourism. Most of the money was spent on the hospitality sector with the average spend per tourist estimated to be around $2,590.
And now, with the slow demise of the hospitality sector, a host of ancillary services are also feeling the pinch. Rashad McCrorey is the founder of Africa Cross Culture, a travel company that helps African-Americans reconnect to their roots by visiting countries on the African continent. He was one of those seduced by Ghana’s call to reconnect with the continent on the 400th anniversary of slaves landing in the United States, and so he arrived in Ghana with the goal of promoting his tourism business.
Ghana imposed a lockdown on movement in its two largest cities, Accra and Kumasi, from March 30, and effected a travel ban on people traveling from countries overseas with cases of Covid-19. In addition, the United States (US) State Department advised its citizens to return home immediately or face staying abroad for an indefinite period. “I was shocked. My initial thoughts were fear and panic. I was seeing all the development in the US, and New York has the highest amount of cases. The National Guard and US army had been deployed in the streets and my home was basically ground zero for the deadly virus,” says McCrorey.
After weighing his options, he made the decision to stay on in Ghana instead of returning home.
“At the time, ticket prices surged from $500 to about $6,000 and I was scared of exposing myself more to the virus. Also, going back meant that I risked spending the pre-paid money of my customers and that was also not ideal,” says McCrorey.
Gregory Lamptey, the founder of Black Cab, a logistics company providing transportation services to customers and businesses in Accra, is facing a similar conundrum. “Business has all but stopped since the lockdown in Ghana last week. I do not think we will be able to make it to the end of the year and I have had to start looking at other alternatives to make ends meet,” he rues.
In Ghana, there were 4,700 confirmed cases with 22 deaths as of May 12. Ghana has undertaken 160,501 tests since the outbreak as of this date, a figure the president lauded as the highest per million people than any other country in Africa.
But as elsewhere on the continent, it’s the workers in the informal sector that are most at risk.
“They face a very difficult choice: keep going to work and risk contracting or spreading the virus, or stay at home and risk their family starving,” observes Nana Kwame Bediako, the founder of Kwarleyz Group, an umbrella company which encompasses Wonda World Estates and Petronia City Development that has designed and developed over 500 residential and retail units in Ghana. The company is currently negotiating to pledge one of its premier properties, Number 1 Oxford Street, five-star luxury serviced apartments, as a quarantine location, isolation center, temporary hospital or safe place for nurses, doctors and other medical personnel should the need arise.
“This is the most challenging economic downturn globally,” says Franklin Cudjoe, President of Imani-Africa, a leading think-tank in Ghana. “This is going to affect businesses all over the world in a much more significant way than ever before.”
This was perhaps the rationale behind Ghana easing its lockdown restrictions in less than a month to allow people to return to work. There is, however, still a ban on public gatherings and a national requirement for face masks to be worn by everyone.
But Kwame Ofori, a financial analyst with the Ghana Stock Exchange, is currently on the fence on how the Ghanaian economy will recover.
“Everything depends on how long this period lasts, but if it goes on for a long time, it’s going to be a big financial and economic crisis for Ghana. Most businesses in Ghana cannot realistically afford a lockdown,” avers Ofori.
It is within this context that Ken Ofori-Atta, Ghana’s Minister of Finance, said in a Financial Times interview that Africa has reached a “break the glass moment”.
Through a partnership between the ministers of finance and economic planning on March 30, a series of strategies were outlined, which includes fiscal measures to mitigate the impact of the coronavirus pandemic including the Coronavirus Alleviation Programme. Consequently, the government estimates of the immediate impact of Covid-19 is a decline in GDP growth from a projected 6.8% to 2.6%.
Along the pristine coastline of the Labadi Beach, sits a five-storey apartment complex boasting beautiful ocean views, underground parking for tenants, a gymnasium, two restaurants and a supermarket. The developer, Kofi Appiah, is a British-Ghanaian architect who relocated to Ghana two years ago.
“I started building and selling a couple of years ago in Ghana and things were great. Right now, we cannot even get anyone to come and look at our developments. I have had to lay off the entire sales team and we are now depending on social media to attract buyers,” says Appiah.
“Buyers need to imagine themselves living in the apartments and this is very difficult to imagine with just videos and pictures on Instagram. I don’t imagine we are going to be selling any of these units at least for the next six months.”
About 40 minutes from Ghana, Nigeria, Africa’s most populous country, is also battening down the hatches. With plunging oil prices caused by the price war between Russia and Saudi Arabia, and the novel coronavirus outbreak, Nigeria is in a much more precarious economic position.
Nigerian stocks have gone through weeks of losses with the fall in oil prices from $57 to $30 per barrel subsequently leading to an increase in external debt and a depreciating currency. This year, Nigeria’s budget stood at $37 billion based on oil prices staying at $57 per barrel. With the sharp decline in these prices, Nigeria cannot currently fund its budget.
“Nigeria might very well be in trouble here. Even though Parliament recently granted President Muhammadu Buhari’s request for $22.7 billion in foreign borrowing, the significant fall in global oil prices will erode any boost from this stimulus. Many analysts are of the opinion that the Nigerian naira has deteriorated markedly and remains set for a sharp fall this year if current conditions persist,” says Ofori.
One of the major side-effects of this in the country is a US dollar shortage that is creeping up with the informal dollar dealers on the black market. Nigeria’s official exchange rate which is fixed by the central bank, has stayed at around N360 to the dollar since the country emerged out of recession in 2017. Today, the rate is N445.
“Everyone is currently hunting for dollars and we don’t have any more. Even the agents we get them from are not releasing the dollars because they believe the rates will go even higher so this is becoming a big problem,” says Audu, a black-market agent.
The coronavirus is simply adding insult to injury for Nigeria’s economic woes. As of May 12, there are over 5,000 confirmed cases of Covid-19 in Nigeria. The country issued a nationwide lockdown between March and April but similar to Ghana, has eased restrictions on movement to enable its 200 million population to return to work while practising social distancing.
Billionaire Jack Ma, founder of Alibaba, announced a donation of essential medical supplies to help fight the pandemic. Along with making global headlines, his actions have also galvanized other private businesses and Nigeria’s most successful entrepreneurs to utilize their assets and funds for social good amid the devastating outbreak.
Tony Elumelu, Chairman of Heirs Holding and United Bank for Africa (UBA), announced N5 billion ($12.8 million), through the UBA foundation, to kick-start a comprehensive pan-African response to the fight against the coronavirus. The donation is aimed at providing significant support to Nigeria and other African countries through the provision of critical care facilities and materials.
“I believe we all have a part to play in this global crisis and I hope that this is the time the private sector and government work together to help the most vulnerable people to battle the virus. We need to act fast and we commend the work the government is already doing to ensure we stem the spread of this global pandemic,” says Elumelu.
For African countries, this virus is expected to overwhelm an already insufficient healthcare system and reverse the economic growth that many countries have been experiencing in recent years. The United Nations Economic Commission for Africa (UNECA) has revised Africa’s growth, falling from 3.2% to 2%.
“We need to deal with the human crisis first before we can begin to address the economic impact of the virus on us. I am confident we will pull through this crisis just like we have in several other adverse situations that have come before,” says Oscar Onyema, CEO of the Nigerian Stock Exchange.
Nigeria’s richest woman, Folorunso Alakija, is also stepping in to help fight the pandemic. Through her Famfa Oil, one of the leading indigenous exploration and oil production companies in Nigeria, she has pledged N1 billion ($2.56 million) to support Nigeria’s fight against Covid-19.
“These are truly difficult times for us. As the world rallies to deal with the health security, economic and social implications of the coronavirus, it is clear we feel the effects more deeply than most of the developed world. Managing a crisis of this magnitude means that the strength of our response will determine our ability to weather the storm but I believe with God, nothing is impossible,” says Alakija.
“Millions of Nigerians are under 30 and live from hand-to-mouth and quite frankly, cannot afford a lockdown. They depend on going out each day to earn a living on the streets as well as buying food from crowded markets. If this lockdown continues, there could be a mass unrest which could further cripple Nigeria,” says Idrisu Bello, a Nigerian economist.
President Buhari in an address in March ordered financial intervention schemes to be rolled out for the most vulnerable.
“This represents about 10,695,360 individuals in 35 states across the country as the poorest and most vulnerable Nigerians,” says Bello.
The Aliko Dangote Foundation (ADF) has also pledged N200 million ($516,000) to support the current effort of the Nigerian government to fight the disease.
Zouera Youssoufou, Managing Director and CEO of ADF, says the donation is part of the foundation’s cardinal objective of partnering with governments to combat the disease.
“The Dangote Foundation has been at the forefront of helping Nigerians fight against diseases and providing economic development for Nigeria. At this very difficult time, we are committed to providing the much-needed support to help the government provide help to millions of vulnerable Nigerians,” says Youssoufou.
As corona cases continue to rise, Nigeria, along with other African countries, has also shut its airports and air travel.
The International Air Transport Association (IATA) estimates that around 330,000 jobs and $1.2 billion are at stake in Ethiopia’s economy, around 190,000 jobs and $3.8 billion in South Africa’s economy, around 138,000 jobs and $1.1 billion to Kenya’s economy and 91,000 jobs in Nigeria with $650 million lost.
Then there is the worrying problem of medical care.
Lagos-based air ambulance and offshore medical solutions contractor Flying Doctors Nigeria, founded and run by entrepreneur Ola Brown, is calling this a true pandemic.
“Africa has to be cautious because of the challenges we have in our healthcare. There are significant deficits and a huge lack of medical and financial resources which means we face an unprecedented time ahead,” says Brown.
However, in spite of the insurmountable challenges, a number of local entrepreneurs are providing innovative solutions to help the government in its fight against the disease.
Accra-based company DTRT Apparel is gearing up to manufacture a range of personal protective equipment (PPEs) to supply Africa and the rest of the world. DTRT supplies products to major US and EU-based brands via a global network spanning three continents. The company employs over 2,000 people in West Africa, procures textiles from Asia and exports primarily to the EU and US markets.
“Now is the time for companies all over Africa to work together for the greater good of the continent. We want to do our part to ensure we are contributing to the fight against this pandemic by providing resources to the healthcare system,” says Salma Salifu, Managing Director of DTRT.
In Nigeria, Bamigbose Adams, a furniture-maker, has begun turning old metal drums into custom hand-washing basins to be sold in Lagos.
Around 157 million Nigerians lack access to proper hand-washing facilities, according to a 2018 report by WaterAid Nigeria and Adams saw this as an opportunity to innovate to survive.
“Business has been slow for a while so I was looking at different ways of making money to feed my family. I got the idea to use the drum from my local area where some people use them to store water. I created the first drum and it worked and then the publicity began to create a demand,” says Adams.
His main clients are local businesses that want a temporary solution to help combat the spread of the virus.
As governments rally to find solutions to help their economies, it is very clear that the way we live and do business will not be the same. Ever again.
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