How I&P responds to the Covid-19 crisisSubmitted by Admin on Wed, 04/29/2020 - 14:58
As an impact investor dedicated to African SMEs, I&P bears a specific responsibility in the response to be brought to the economic crisis that is hitting the African continent, perhaps even more than the health crisis.
We are pleading for public policies to take the necessary measures to protect and revive an African private sector that has been hit hard and we are strongly committed to our partner companies, trying to advise them in the best possible way and mobilizing financial resources. We are also exploring the possibility of raising a new vehicle, financed by grants and subsidies, to help African SMEs and startups to get through the crisis. Now is the time to take action, not only to address the emergency, but also to start building tomorrow's African economy.
This article is a review of I&P's commitments in response to the crisis:
Perhaps even more than the health crisis, it is the economic crisis that is hitting the African continent. No one yet knows the scale of this crisis, but it is wise to anticipate a very difficult situation. Regardless of its scale, the coronavirus crisis will undoubtedly kill fewer people in Africa than the economic crisis, in a continent where so many people are on the edge of survival.
As an impact investor dedicated to African SMEs, I&P bears a specific responsibility in the response to be brought to this crisis.
First of all, we must plead for public policies to take the necessary measures to protect and revive an African private sector that has been hit hard by the disruption of logistics chains with China, the sudden halt of exports to Chinese and European markets, and the sudden interruption of capital flows. This supply shock will be aggravated by a demand shock resulting from the decline in public procurement, domestic arrears and falling incomes, especially in the informal sector. If the prices of oil and minerals remain low, the exporting countries will remain deeply and persistently depressed, and the debt crisis will deepen. The economic plans in preparation must, of course, massively finance the health effort to contain the pandemic. But they must also focus on rescuing national small businesses: their disappearance would deepen the social crisis and hinder the rapid recovery of the economy. Ten or twenty years of development progress could easily be lost.
I&P is also strongly committed to its partner companies. We stand at their side, trying to advise them in the best possible way, mobilizing financial resources to solve liquidity problems when they arise, and of course working with them to reduce health risk among their employees and their families. We hope to achieve good results at all levels, but only through intense commitment of our teams on the field. We are teleworking in all our offices, although in some countries, such as Madagascar, the government is gradually relaxing the teleworking constraint.
In this context, the availability of European funds and of our donors' funds for I&P's acceleration programs is highly valuable. It enables us to find innovative solutions, notably in the Sahel, a region severely affected by a conjunction of acute problems. This is why, inspired by these new programs, we are exploring the possibility of raising a new vehicle, "I&P Covid 19", financed by grants and subsidies. It would provide highly concessional loans and technical assistance to a significant range of SMEs and start-ups to enable them to get through the crisis and to help them provide concrete solutions to health and social challenges. We hope that this fund will draw the interest of the stakeholders promoting African entrepreneurship. If launched rapidly, the fund could play a significant role in the fight against both the pandemic and the economic crisis.
Now is the time to take action, not only to address the emergency, but also to start building tomorrow's African economy. The world we know will undoubtedly be partly transformed, with shorter value chains, greater emphasis on the health and epidemic issues, and deeper environmental concerns. All of this in a continent where youth and population growth will remain the hallmark.
In a context where it is "difficult to predict the unpredictable", the economist Paul Derreumaux discuss in his article "Africa: The spectrum of coronavirus" the unprecedented and global crisis of Covid-19 and its potential consequences in Africa, both in health and economic terms.
With several companies operating in the education sector in its portfolio, I&P has been able to observe the difficulties but also the great adaptability of the sector. Tom Dilly traces these different strategies in the article, broadening the debate to longer-term perspectives for the African education sector.
► The African Management Institute, specialized in distance learning, has launched a "Covid-19 business survival bootcamp" for African SMEs, a short learning programme entirely free of charge. Read more
► Africa Radio is committed to the fight against Covid-19: special programmes, prevention messages, advice to accompany lockdown ... Its CEO Dominique Guihot explains how the radio adapts to maintain the link with its listeners. Read more (in Fench)
► The network of African high schools Enko Education has also reacted quickly to offer distance education to all of its students, with specific devices for students who do not have access to the Internet at home. Read more
To track the number of cases worldwide and in Africa
- The Jeune Afrique Map
- The map put online by Cédric Moro, in partnership with 35°N
- A map to monitor global developments
What's app/Telegram groups to follow, in French, the evolution of the virus in Africa from day to day
Responses from impact investing networks