By Salewa Olawoye, York University, Toronto, Canada

Growing up, there was a popular Nigerian television show called “Tales by Moonlight”. It gave stories from an African perspective that provided lessons, especially moral lessons, to the listeners. In recent times, the world experienced a pandemic that has opened up various opportunities of lessons for the world to learn. The recent global pandemic, Covid-19, changed the world in a lot of ways. Countries experienced extended preventative measures such as lockdowns that were thought to last for 2 weeks and every part of the society was affected. The pandemic ushered in an era of people getting sick, some others dying, many losing their jobs or working from home, businesses folding up and a general feeling of gloom and despair. Economic effects include supply interruptions through a reduction in hours worked and supply chains were affected, which influenced inflation. As a result of these and other Covid related issues, life as we knew it changed.

The effects of this global pandemic on developing nations differed yet the severity of the situation was not lost on many countries. It did not matter if they had proper health systems or not, the world felt the effects of Covid-19 and systems had to be adjusted to survive the pandemic. In the developing world, there was a general feeling of fear and doom as the devastating effects of Covid-19 in the world were publicized. In a CNN interview, Melinda Gates talked about Covid-19 being devastating in developing countries with bodies being littered around, and predicted catastrophic effects in countries in Africa. The continent was expected to produce the most devastating casualties of Covid-19 in the world.

Despite these predictions, countries in Africa survived the pandemic much to the surprise of the rest of the world. It almost seemed like can anything good come out of Africa? While the rest of the world embraced her entertainment (the music and movies) on social media, everything else seemed to be shown in a negative light during the pandemic. However, African countries survived the pandemic and a lot of the ways of survival need to be studied along with the survival strategies of the rest of the world. Countries in Africa provide a great case study because each country is different in terms of development, structures and systems. While non-pharmaceutical Covid-19 preventive measures such as lockdowns to flatten the curve were easier in countries with a more developed system like South Africa, others like Nigeria had to reopen before flattening the curve as for quite a number of people who depended on daily physical work to survive, hunger was a bigger pandemic than Covid-19. In all countries, monetary and fiscal policies were used to regulate the economy from the various effects of Covid-19.

In studying monetary policies around the world, it is quite common to focus on the West. If this study is focusing on developing countries, a heavy focus is placed on Latin American countries and Asian countries. African countries are largely underemphasized. When studied, the complexities in African countries and different structures that exist in them are often ignored. However, these complexities and differences make African countries an interest study in the fight against Covid-19. Using Sub-Saharan Africa as a monetary policy case study, we see that countries in Africa have different monetary regimes. Some countries have independent central banks while others belong to one of two monetary authorities, the Central Bank of West African States (BCEAO) or the Bank of Central African States (BEAC). Our book, Covid-19 and the Response of Central Banks: Coping with Challenges in Sub-Saharan Africa, captures these differences in African countries and how various countries adopt various forms of monetary policy to suit issues in a country and the country specific effects of these policies adopted. To achieve this, eight Sub-Saharan African countries are analyzed. They include Nigeria, Cote d’Ivoire, Ghana, Senegal, the Republic of Congo (Congo-Brazaville), Cameroon, Sierra Leone and the Democratic Republic of Congo (Congo-Kinshasha).

It is not uncommon to hear the statement “Africa is not a country” used to highlight the various countries and their differences within the continent. This book further fuels this stance through the study of Covid-19 and monetary policy in Sub-Saharan Africa. It highlights the different monetary policies and their effects based on whether countries have an independent monetary authority or if a country belongs to a monetary union. From a central banking perspective, we see how different systems produce different outcome and how these different countries in Africa tackled the challenges that came with Covid-19. We see lessons from African countries for Africa and the world.

COVID-19 and the Response of Central Banks: Coping with Challenges in Sub-Saharan Africa Edited by Salewa Olawoye, Assistant Professor, York University, Toronto, Canada is available now.

Read the introduction and other free chapters on Elgaronline

Karin A. Bottom, John Diamond, Pamela T. Dunning and Ian C. Elliott give their insight on this interesting topic.

Alfred Marcus and Mazhar Islam examine how demographic changes introduce new challenges for businesses.

The impacts on countries that have falling working-age populations – Japan, Germany, Russia, Taiwan, the US and China – are profound. First, a shortage of labour is leading to higher pay, which has resulted in an uptick in inflation. Second, economic growth, which arises from having more workers and their being more productive, has been slowing and it is likely to continue to slow. Countries with fewer workers have to increase their productivity rapidly, or else they face diminishing growth. At best, they can maintain the same level of economic activity. However, it will be hard for ageing countries to increase this level. Third, demand will fall.

These reflections about what will happen next are not speculations. Businesses must recognize that a decline in working-age adults means fewer taxpayers and, with fewer taxpayers, the stress on social security and welfare systems of countries that have fewer workers grows. As populations contract, the challenge for governments is to find sufficient revenue to fund programs that look after the elderly, while continuing to nourish the young. Governments must rely on their populations being replenished by immigration or their economies being transformed by technological advances. Without these, the decline in family size – families being neither large nor stable enough – presents a daunting challenge, one that no government has yet to master fully.

Already in the US the number of jobs is exceeding the number of job seekers, a development that makes perfect sense as the number of elderly rises and immigration is curtailed. Without increases in productivity, or delays in the age of retirement, businesses have to recognize that countries with fewer workers are not likely to grow rapidly. Were there to be another economic shock like the great recession of 2007–08 or some other unexpected event like the COVID-19 pandemic, it will be very difficult for countries with declining workforces to return to a normal level of growth.

The positive side of reduced growth in ageing countries is less negative environmental impact. Reduced growth boosts efforts to lower greenhouse gas emissions, but this reduction may be accompanied by declines in food, water, and energy consumption, and lower living standards. Therefore, technological innovation that is good for the planet and good for the corporate bottom line should be a high priority that is pursued vigorously by all companies. Companies also need to closely collaborate with government and policymakers in ageing countries so that the governments undertake policies that promote such technological innovation.

Immigration is the sensible way to replenish lagging working-age populations. Businesses should become major supporters of pro-immigration policies. However, until now, immigration at the scale needed to make a significant dent in the problem has been politically unfeasible in almost all countries. The rise of nationalist leaders around the world and their ascent to power is harming the ability of the world to adjust to the challenge of ageing. Businesses must do all they can to oppose these movements and to put a stop to the policies they represent. It is in the self-interest of business to do so.

The alternative, to persuade citizens to have more babies, or to incentivize them with monetary rewards, is a far slower and less certain way to approach the problem of ageing. Typically, most of the subsidies offered to people to have more children are absorbed by people who would have had such children without the subsidy. Experience in Europe with longer parental leaves as a way to encourage increased births suggests that such policies do not impact birth rates significantly. However, such benefits do lead to better parenting and positive societal benefits. Subsidized childcare does seem to help, though the effects are not sufficient for countries to move their fertility rates back to the replacement level which would guarantee population stability.

Therefore, businesses should support these subsidies. They should support them because they signal to women that they can have families and at the same time fully pursue their careers without impairing either quest to any great extent. Women need to feel that they can participate fully in the workforce. Their participation has never been needed as much as now, especially in ageing societies.

There are several other implications for management about how it should prepare for a situation in countries where the size of the working class is shrinking:

• Salaries and benefits might have to be increased to retain quality human capital which might
  be in great demand in these societies.
  
• Human resource practices must be implemented that attract employees who have traditionally
  remained outside the workforce.
  
• It must be recognized that demand patterns will be far different in ageing societies.
  Marketing and product development will change.

Management must devise strategies that take advantage of the world’s demographic diversity. It cannot rely solely on aging societies as their vitality will inevitably diminish to some degree. As well as making aggressive attempts to innovate technologically, businesses must never let up in their strong support for liberal immigration policies.

Demography and the Global Business Environment by Alfred A. Marcus and Mazhar Islam is out now.

Alfred A. Marcus is Edson Spencer Professor of Strategy and Technology Leadership, Carlson School of Management and the Technological Leadership Institute, College of Science and Engineering, University of Minnesota. Mazhar Islam is Assistant Professor of Management and the Chase Distinguished Professor of International Business, College of Business, Loyola University New Orleans, US

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