Ten key issues to watch in Africa in 2021

We have identified ten key issues to watch in Africa in the year ahead.

• Tackling the COVID-19 pandemic and its economic fallout will remain the top priority for governments in 2021. But as a second wave has seen cases reach a new peak, vaccination campaigns will be uneven and slow to take off.
• The pandemic and improvements in ICT infrastructure will continue to spur rapid digital innovation across the continent. But with the tech sector’s spectacular growth will come growing cyber threats and increasing regulatory scrutiny.
• Democracy risks taking another step backwards in 2021 as elections test democratic institutions and reform promises in Ethiopia, Benin, Zambia and Gambia. Preparations for high-profile leadership successions will also start in Kenya and Nigeria.
  
  

Vaccine rollouts

COVID-19 vaccination campaigns will be uneven. Most African countries have yet to secure any doses, while others have secured supplies for no more than 10% of their populations. Most countries have been relying on the global COVAX initiative. However, only low-income countries will qualify for funding, with others having to finance vaccines themselves – no easy task amid ongoing fiscal challenges. To date, only South Africa has purchased supplies independently. Vaccines delivered through COVAX are not expected to arrive in the region until at least the second half of 2021.

Most countries are now relying on the African Union (AU), which in January secured 270m doses for Africa. Meanwhile, some countries have leveraged bilateral supplies. The result, a patchwork of supply deals with Chinese, Russian, Indian and Western suppliers, will be influenced by diplomatic considerations, uneven and often underwhelming. Conducting mass vaccination programmes through weak healthcare systems lacking cold storage facilities will be no less challenging.

Overall, the vast majority of countries in the region will not be able to vaccinate the required 80%-90% of populations required to achieve herd immunity. Interventions such as mandatory mask wearing, and in some cases curfews and border closures will likely remain in place over the coming year. Governments will continue to focus on capacity building in healthcare systems, including securing more hospitals beds and personal protective equipment (PPE), boosting pharmaceutical manufacturing, and building centralised digital health systems. 

COVID-19 spurs digital acceleration…

After a remarkable year of growth in which it eased the disruption caused by COVID-19, African tech has plenty of solid achievements to build on in 2021. Improvements in connectivity have enhanced prospects for the tech ecosystem. Construction of Google’s new Equiano submarine cable is expected to boost network capacity when it makes its first landing in Nigeria by the end of the year. Investments in data centre facilities will also accelerate in 2021, both in existing hubs for cloud providers such as South Africa or Kenya, but also in new markets. 

The combination of faster broadband and new habits from the pandemic will drive digital innovation across all sectors of the economy. E-commerce leader Jumia saw online grocery sales increase fourfold in 2020. E-commerce platforms have gained consumer trust and will continue to grow in capital cities as the virus remains in circulation. Mobile money and other fintech applications will benefit from more supportive regulators and investor enthusiasm, after high-profile acquisitions in 2020 such as payment service provider Paystack. 

… and brings new digital threats 

On the flip side, Africa’s digital acceleration is also increasing the continent’s vulnerability to cyber threats. 2020 saw a steep rise in cybersecurity incidents across the continent as urban residents embraced remote work and digital applications, forcing companies and institutions – many of which were relying on legacy software and hardware systems – to rapidly build up their cyber defences. As elsewhere, cybercriminals in Africa exploited citizens’ fear and uncertainty around COVID-19 and have launched thousands of pandemic-related malicious websites and scams aimed at fraud and identity theft. These lower-level threats will remain prominent in 2021. However, as threat actors look to connected economies on the African continent, we also expect more advanced and disruptive cybercriminal attacks like ransomware to increasingly affect critical economic sectors, particularly in South Africa, Nigeria and Kenya. 

Increased digitisation is also putting tech sector companies under the spotlight. Social media content will be increasingly monitored by governments fretting about misinformation as well as popular discontent. We expect most elections in 2021 to see some form of social media blackout, illustrated most recently in Uganda. Nigeria is also likely to tighten social media regulations on the back of the #EndSARS protest movement. Its previous proposal for a social media bill proved too unpopular, but its government, like others on the continent, will likely resort to new security laws, registration rules or taxation to monitor social media users. 

Other digital applications will not face the same degree of scrutiny. Regulators will still encourage digital applications, but will increasingly look to capture financial benefits from them. Data privacy is also a nascent but emerging field of regulation where African countries will play catch-up in the coming year. Most notably, South Africa’s new data protection legislation will enter into force in July 2021. 

Instability in the Horn of Africa

Although Ethiopian Prime Minister Abiy Ahmed claims his “law enforcement operation” in Tigray has been successful, fighting between federal forces and the Tigray People’s Liberation Front (TPLF) continues. Meanwhile, Ethiopia’s neighbours have inevitably been drawn into the conflict. Long-time TPLF foe Eritrea is deployed in Tigray in support of Abiy, while thousands of refugees have fled into Sudan. As Abiy prepares for a key electoral test in June, the government’s handling of the Tigray conflict and delicate balancing of regional and domestic interests will prove key to the stability outlook.

In Somalia, Ethiopia’s distractions with its internal affairs are leaving gaps in security provision in the Ethiopia-Somalia border region at a time when Somalia is struggling to hold its presidential election. Relations between Somalia and Kenya have reached an all-time low, and with the US withdrawing from the country, Somalia will increasingly have to deal with persistent insecurity arising from Islamist militant group al-Shabab on its own. These issues will create a complex operating environment in the coming year.

A challenging year for democracy

2020 was a bad year for African democracy. Although the opposition victory in a court-ordered rerun of the 2019 presidential poll in Malawi was a rare bright spot, elections elsewhere often marked a step backwards. 2021 is unlikely to see improvements. The Ugandan general elections on 14 January saw violence and repression, while promised elections in Somalia continue to be delayed. In Benin and Zambia elections will test whether traditionally strong democracies can resist recent slides towards authoritarianism. In Ethiopia and Gambia elections will show whether relatively recent promises of democratic reform will be fulfilled. 

Kenya enters election mode

Elections are never far from politicians’ minds in Kenya. In 2021, coalition building ahead of the 2022 polls will dominate the political environment. President Uhuru Kenyatta and opposition leader Raila Odinga will continue their alliance under the Building Bridges Initiative (BBI), which proposes the creation of a post of prime minister to dilute the executive power of the president. On the other side of this debate will be self-styled populist Deputy President William Ruto, who claims that the BBI serves to protect the interests of prominent politicians. All this suggests that Kenya is headed towards a contentious constitutional referendum in the coming year, even as preparations for the 2022 elections commence.

Nigeria struggles to tackle security crises

In Nigeria, focus is also turning to President Muhammadu Buhari’s succession in 2023. But outside the economy, the government’s most pressing task in the coming year will be tackling the growing array of security challenges nationwide. Buhari was elected in part due to his military background and promises to improve security, but has made little progress. 

Islamist militancy in the north-east is set to continue, with security forces remaining constrained by limited funding and equipment, and the challenging topography and vast size of the area. Banditry and kidnapping in the north-west have increased, while crime in urban areas will remain a challenge. Separatist sentiment in the south-east and perceptions of marginalisation in the oil-producing Niger Delta have persisted, driving small-scale conflicts. To these can be added growing allegations of police brutality, which in October 2020 fuelled the country’s largest ever protest movement. These challenges will sustain insecurity throughout Nigeria in 2021.

COVID-19 and climate change disrupt Africa’s energy industry 

At the beginning of 2020 African leaders had high hopes for the continent’s energy sector. Historically lagging its peers in Europe, Asia and North America, regional initiatives aimed for a general energy mix with renewable sources making up 50% of the total. At the heart of these ambitions was a desire to expand rural electrification grids to transmit energy to the roughly 600m people currently living without power in Sub-Saharan Africa. The COVID-19 pandemic has diminished these ambitions. Energy, perhaps more than any other sector, requires state participation, and across the continent national budgets have been diverted to emergency response programmes. With the pandemic suppressing tax revenues and raising concerns about debt sustainability, Africa’s energy sector will have to wait beyond 2030 before these objectives can be met. 

That said, the international drive to “go green” and reduce emissions will continue to intensify in 2021, and development finance and investors’ capital allocations will further shift towards renewables. While the environment has become more challenging for capital-intensive projects, we expect growing support from policymakers for smaller-scale off-grid and micro-grid solutions, as well as energy storage systems. 

Africa’s free trade area takes effect 

As COVID-19 and fears of food shortages demonstrated Africa’s over-reliance on global supply chains, impetus is growing to strengthen value chains on the continent. After months of delays, the African Continental Free Trade Area (AfCFTA) came into force on 1 January. Bringing together 1.3bn people in a USD 3.4 trillion economic bloc, the AfCFTA is set to become the world’s largest free trade area since the establishment of the World Trade Organization in 1995. 

However, full implementation of the AfCFTA is likely to take time. A dozen of the zone’s 54 member states still need to submit their tariff reduction schedules, while the rules of origin – which determine which products can be subject to tariffs and duties – have yet to be finalised. Once these processes are complete – by July, according to AfCFTA officials – tariffs will then have to be gradually phased out, with 90% of them expected to be lifted by 2030.

Beyond tariff harmonisation, structural challenges – including poor road and rail infrastructure, inadequate border facilities and cumbersome bureaucracy in many countries – could slow implementation. Meanwhile, legislation in some countries will need to be brought into line with new AfCFTA requirements. For example, restrictions on foreign investment in Ethiopia’s financial sector could breach AfCFTA rules. To avoid the sort of popular backlash seen against free trade agreements in North America or Europe, the AfCFTA will also need to be perceived as benefiting both large industrial countries and smaller producing countries.

Trump goes, bilateral diplomacy stays 

Former US president Donald Trump may have shown little interest in Africa – leaving senior diplomatic posts on the continent unfilled and proposing deep cuts to foreign assistance – but his administration clearly established the direction of US engagement with the continent. The Prosper Africa Initiative and start of negotiations with Kenya over a bilateral trade deal to replace the African Growth and Opportunity Act (AGOA) highlighted a shift away from unilateral aid, or at least an attempt to use that aid to access commercial opportunities. 

The new US administration will not change direction. Trump may have accelerated the shift towards a more commercial diplomacy, but there were already signs of it during Barack Obama’s presidency (2009-17). It is the same direction that other traditional donors to Africa such as the EU are taking as they seek to keep pace not only with China, but with other geopolitical competitors such as Russia and the Gulf states.