SOURCE / INDUSTRIES
COVID-19 impact set to worsen in Africa
Pandemic affecting socio-economic conditions of ‘almost all’ countries on the continent: AU report
Published: Apr 07, 2020 07:28 PM

Health workers in Antananarivo, Madagascar collect blood samples from a child to test for COVID-19 on April 3. Photo: AFP



The socio-economic conditions of "almost all African countries" have been affected by the COVID-19 pandemic which is poised to worsen dramatically as tourism, air transport and oil sectors are "visibly impacted," according to a new report published by the African Union (AU) on Monday.

The 55-member African bloc said in its latest report on the impact of COVID-19 on African economies issued on Monday that "some key sectors of the African economy are already experiencing a slowdown as a result of the pandemic." The report noted that the COVID-19 crisis is affecting both the African and world economies.

"The COVID-19 pandemic has hit almost all African countries and appears poised to worsen dramatically. The disruption of the world economy through global value chains, the abrupt falls in commodity prices and fiscal revenues and the enforcement of travel and social restrictions in many African countries are the main causes of the negative growth," the newly published report read.

The AU also projected exports and imports of African countries would drop by at least 35 percent from the level reached in 2019. The loss is estimated to be around $270 billion.

"The fight against the spread of the virus and medical treatment will lead to an increase of public spending in Africa estimated to be at least $130 billion," the report revealed.

According to the AU, due to the African continent's openness to international trade and migration, it is not immune to the harmful endogenous and exogenous effects of COVID-19.

The AU says the exogenous effects of COVID-19 have had an impact on Africa's direct trade links with affected partner continents like Asia, Europe and North America. 

It said its lagging tourism sector, the decline in remittances from the African diaspora, reduced foreign direct investment and official development assistance, as well as illicit financing flows and domestic financial market tightening are among the major exogenous impacts of COVID-19 on African economies.

The endogenous effects of COVID-19 are occurring as a result of the rapid spread of the virus in many African countries. They are linked to morbidity and mortality and lead to a disruption of economic activities, according to the AU.

"It is important to assess the socio-economic impact of COVID-19, although the pandemic is at a less advanced stage in Africa due to its lesser quantity of international migrants' arrivals relative to Asia, Europe and North America and strong precaution measures in some African countries," the report read.

The newly published report, which noted that African economies remain informal and very extroverted and vulnerable to external shocks, envisaged the possible socio-economic repercussions of the virus in order to make policy recommendations in response to the crisis. It was necessary mainly due to the difficulty of quantifying the real impact as a result of uncertainties, the rapidly evolving nature of the pandemic and the scarcity of data.

According to the report, tourism, air transport and oil sectors have been "visibly impacted." It also stressed that invisible impacts of COVID-19 are expected in 2020 regardless of the duration of the pandemic.

"The socio-economic impact of the COVID-19 crisis is real. It is therefore essential to inform the populations on the impact and advise policymakers in order to better prepare and lessen the adverse impact of the pandemic," read the report.

"With the negative impact on key sectors of the economy such as tourism, travel, exports; with falling commodity prices, declining governmental resources to finance public investment, it would be [seemingly] impossible to achieve an optimistic forecast of growth rates in 2020," the AU stressed.

The report noted the higher impact of COVID-19 on Africa's tourism industry. For 15 African countries, the tourism sector represents more than 10 percent of GDP, and for 20, it is more than 8 percent.

Figures from the AU show the tourism sector contributes much more to GDP in countries like Seychelles, Cape Verde and Mauritius (above 25 percent of GDP) while it also employs more than a million people in Nigeria, Ethiopia, South Africa, Kenya and Tanzania. Tourism employment comprises more than 20 percent of total employment in Seychelles, Cape Verde, Sao Tome and Principe, and Mauritius.

The report came as the COVID-19 death toll on the African continent hit 414 and confirmed cases reached 9,178, the Africa Centers for Disease Control and Prevention revealed on Monday.