A Dialogue with Goolam Ballim, Chief Economist, Standard Bank

On May 20, 2020, Corporate Council on Africa in partnership with National Association of Securities Professionals and MiDA Advisors hosted a webinar featuring Goolam Ballim, Chief Economist and Head of Research, Standard Bank to discuss the pandemic's impact on African economies and private sector investments. The dialogue was moderated by Christian Dunbar, City Treasurer, City of Philadelphia, and Chairman, MiDA Advisors.Mr. Ballim began the dialogue by highlighting the stellar GDP growth that Africa has experienced over the past two decades with surging exports and flourishing trade with BRIC countries. Presently, however, Mr. Ballim believes that the impending economic downturn resulting from COVID-19 will be detrimental to the continent with a potential 4% GDP contraction in 2021.In recent decades, there has been volatility in oil-based economies, volatility but resilience in other resource-intensive economies, and little volatility in non-resource intensive economies. Mr. Ballim declared that oil-based economies will take the hardest hit with an anticipated 4% contraction versus a 3% contraction for other resource-intensive economies, and marginal growth for non-resource economies. Mr. Ballim attributed Africa’s early preparation for COVID-19, and their lead in adopting nonmedical approaches to COVID-19, to the initial appearance of the virus in Europe and the U.S. first. He highlighted that West Africa leads the number of cases on the continent and that across the region there are .25 doctors for every 1000 people.Some of the key socio-economic consequences of COVID-19 in Africa include a shock to one-third of GDP due to disruptions in supply chains and demand, FDI deferrals and reductions, school closures, and lockdowns reducing household incomes. Mr. Ballim outlined key responses to this as the provision of fiscal stimuli, monetary easing by providing banks with liquidity relief and easing capital regulations, solidarity funds, loan restructuring, and payment deferrals. He also advised that firms resurrect business activities while adopting aggressive workplace protocols to minimize virus transmission, which could influence governments to lower levels of lockdown. He further recommended a multi-phase approach to the response, where the first phase is lockdown and stimulus programs, the second phase is opening up, and the third phase is a recovery and stimulus program.Mr. Ballim stated that SMEs, despite being the most acutely vulnerable sector, play a very significant role in Africa encompassing over 80% of employment on the continent. In response to the COVID-19 impact on SMEs Standard Bank has chosen a blanket approach of restructuring payment holidays and considering 0% loans for clients with good standing. In reference to policy changes with respect to China, Mr. Ballim believes the continent will need funds from wherever it can get it, and because of this China’s impact on the continent may increase.Ronald C. Parker, President, and CEO, National Association of Securities Professionals (NASP) gave final remarks encouraging sustained engagement for global growth and reiterating the importance of data, insight, leadership. Ms. Liser, in her closing remarks, underscored CCAs enthusiasm to bring U.S. and African businesses together to encourage responsible investment in Africa.