Economic Implications

The Economic Impact of COVID-19 in Africa: A Round-Up of This Week’s Analysis

The coronavirus pandemic continues to take its toll on the African continent. While the continent as a whole still accounts for relatively few deaths from the disease, the numbers are rising, with more than 4,700 confirmed cases and 127 deaths. As countries scramble to contain the virus—and are affected by the efforts of other countries to do the same—the economic impacts grow.

Here’s a selection of this week’s coverage on the observed and expected economic impacts across the continent, divided into growth and income, sectors and sub-populations, policy responses, and commentary.

Growth and income analysis

  • McKinsey proposes different scenarios for Africa’s growth in the wake of COVID-19. Before the crisis, the 2020 growth estimate for the continent was 3.9 percent. In the “least-worst case,” characterized by the outbreak being somewhat contained both globally and in Africa, growth drops to 0.4 percent. In other scenarios (including a lack of containment globally and in Africa), the rate drops as low as -3.9 percent. The scenarios explicitly do not take into account either fiscal stimulus packages or currency devaluations.
  • Breisinger and others estimate monthly GDP losses for Egypt under a range of scenarios, with estimates around 0.7 to 0.8 percent.

Sector and sub-population analysis

  • The World Food Programme’s analysis for West and Central Africa highlights that 2019/2020 had been a strong agricultural season “with overall higher than average production of cereals,” which is good for food security. But despite that, the “consumer price index for food is at its highest since 2008 in the Monetary Union of West Africa zone.” They talk about informality, remittances, and migration, and here’s their take on agriculture:

    “More than 80 percent of rural population rely on subsistence farming in West and Central Africa. The 2020 off season harvests should be reaching markets and providing substantial incomes of stallholder farmer. However, market closure, restriction on internal and cross borders movement limit markets access. Planting period starts in May/June for the main agricultural season while the Covid-19 epidemic is forcing governments to cut agricultural expenses and to prioritize health-related expenditures. If the above-mentioned restrictions continue, famers won’t have access to market to buy good quality seeds and fertilizers.”

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The Economic Impact of COVID-19 in Africa: A Round-Up of This Week’s Analysis

The coronavirus pandemic continues to take its toll on the African continent. While the continent as a whole still accounts for relatively few deaths from the disease, the numbers are rising, with more than 4,700 confirmed cases and 127 deaths. As countries scramble to contain the virus—and are affected by the efforts of other countries to do the same—the economic impacts grow.

Here’s a selection of this week’s coverage on the observed and expected economic impacts across the continent, divided into growth and income, sectors and sub-populations, policy responses, and commentary.

Growth and income analysis

  • McKinsey proposes different scenarios for Africa’s growth in the wake of COVID-19. Before the crisis, the 2020 growth estimate for the continent was 3.9 percent. In the “least-worst case,” characterized by the outbreak being somewhat contained both globally and in Africa, growth drops to 0.4 percent. In other scenarios (including a lack of containment globally and in Africa), the rate drops as low as -3.9 percent. The scenarios explicitly do not take into account either fiscal stimulus packages or currency devaluations.
  • Breisinger and others estimate monthly GDP losses for Egypt under a range of scenarios, with estimates around 0.7 to 0.8 percent.

Sector and sub-population analysis

  • The World Food Programme’s analysis for West and Central Africa highlights that 2019/2020 had been a strong agricultural season “with overall higher than average production of cereals,” which is good for food security. But despite that, the “consumer price index for food is at its highest since 2008 in the Monetary Union of West Africa zone.” They talk about informality, remittances, and migration, and here’s their take on agriculture:

    “More than 80 percent of rural population rely on subsistence farming in West and Central Africa. The 2020 off season harvests should be reaching markets and providing substantial incomes of stallholder farmer. However, market closure, restriction on internal and cross borders movement limit markets access. Planting period starts in May/June for the main agricultural season while the Covid-19 epidemic is forcing governments to cut agricultural expenses and to prioritize health-related expenditures. If the above-mentioned restrictions continue, famers won’t have access to market to buy good quality seeds and fertilizers.”

READ FULL ARTICLE HERE

This is the human impact of COVID-19 – and how business can help

  • As business close to help prevent transmission of COVID-19, financial concerns and job losses are one of the first human impacts of the virus;
  • Not knowing how this pandemic will play out also affects our economic, physical and mental well-being;
  • Despite this fear, businesses and communities in many regions have shown a more altruistic response in the face of crisis – actions which could help countries preparing for COVID-19.

COVID-19 is in decline in China. There are now more new cases every day in Europe than there were in China at the epidemic’s peak and Italy has surpassed it as the country with the most deaths from the virusIt took 67 days to reach the first 100,000 confirmed cases worldwide, 11 days for this to increase to 200,000 and just four to reach 300,000 confirmed cases – a figure now exceeded.

The human consequences

In recent weeks, we have seen the significant economic impact of the coronavirus on financial markets and vulnerable industries such as manufacturing, tourism, hospitality and travel. Travel and tourism account for 10% of the global GDP and 50 million jobs are at risk worldwide. Global tourism, travel and hospitality companies closing down affects SMEs globally. This, in turn, affects many people, typically the least well-paid and those self-employed or working in informal environments in the gig economy or in part-time work with zero-hours contracts. Some governments have announced economic measures to safeguard jobs, guarantee wages and support the self-employed, but there is a lack of clarity in many countries about how these measures will be implemented and how people will manage a loss of income in the short-term.

 

READ FULL ARTICLE HERE