Delivering the AAM2022 opening day keynote address yesterday, Prof. Spence, the 2001 Nobel Laureate in Economics and the William R Berkeley Professor of Economics and Business at the Stern School of Business at New York University, said that, in a post Covid-19 environment and in the face of the Ukraine crisis, the global economy was facing a regime change that called for an urgent rethink.
Africa must “rethink the things we’ve taken for granted” in order to confront and surmount the radically complex and uncertain challenges confronting the world, Nobel Laureate Prof. Michael Spence has told participants in the 2022 Afreximbank Annual Meetings (AAM2022) in Cairo.
“Banks and governments are facing radically complex and uncertain challenges and must do a good job of managing uncertainty whilst moving forward to meet set objectives, despite the increasing fragility and risk,” said Prof. Spence who argued that the reordering of supply chains presented both opportunities and threats.
He argued that while supply chain congestion was more serious than most people thought, due to the dramatically rising prices, inflation and debt which it had triggered, the level of optimism was truly extraordinary.
“Due to the rapid increase in digital and tech infrastructure to support remote working over the pandemic, there’s been an upsurge in digital unicorns in Africa, with brands such as Chipper’s Cash, Andela, OPay and Flutterwave, boosting the economy and leading the way, he pointed out. “Founders of these businesses are serving as angel investors and mentors for the next generation of entrepreneurs and many of these businesses are aligned with the social objective of serving less populated areas and encouraging inclusiveness.”
Prof. Spence said that, because of these developments, healthcare, education and e-payment were now more accessible and immediate, allowing for technology, such as
image recognition, to be used to detect early symptoms of skin cancer and for more rural areas to have access to improved standards of education.
He, however, warned that, “despite this flurry of tech innovation, we’re in for a bumpy ride over the next two to three years due to very large shifts in the labour market contributing to supply and inflationary pressures and creating “a period of extraordinarily complex and rapid change”.
Prof. Spence is also the Philip H. Knight Professor of Management, Emeritus, and Dean, Emeritus, of the Stanford School of Business.
In a panel discussion following the keynote address, Amb. Albert Muchanga, African Union Commissioner for Economic Development said that vision of the African Union was “to create an integrated Africa that has leverage in the global economy. We need to create a single Africa as soon as possible.”
Dr. Vera Songwe, Executive Secretary of the United Nations Economic Commission for Africa, commended Afreximbank’s role in the African economic development space, saying that, due to Afreximbank, “Africa can now do things on its own, such as raise the resources needed to buy its own vaccines.”
She added that there had also been innovations and programmes, such as encouraging businesses to procure more from Africa, new payments systems to facilitate intra-African trade and better roads and transport, which, together, would provide greater opportunities for job creation.
Dr. Rami Abulnaga, Deputy Governor, Central Bank of Egypt, called for an improved regulatory environment and the setting of appropriate fiscal and monetary policies to support the African Continental Free Trade Agreement, arguing that Africa must be a lot more agile and flexible in order to deal with the changing economic landscape.
“We must embark on opportunities to inject liquidity into the economy and must not be deaf to the changes,” he concluded.
Christian Yoka, Director of the African Department at the French Development Agency, highlighted the power of unification, pointing out that Europe had been able to be at peace, thanks to its common market. “This has been a real game changer,” he added.