Addis Ababa, Ethiopia, March 13, 2020 (ECA)听鈥撎齌he Economic Commission for Africa (ECA) on Friday warned the unfolding coronavirus crisis could seriously dent Africa鈥檚 already stagnant growth with oil exporting nations losing up to听US$听$65听billion in revenues听as听crude oil prices听continue to tumble.
Speaking at a Press Conference in Addis Ababa, ECA Executive Secretary, Vera Songwe, said听having听already strongly hit听Africa鈥檚 major trading partner, China, COVID-19 was听inevitably impacting Africa鈥檚 trade.
She said听although a few COVID-19 cases have been reported in some 15 countries far,听the crisis was set to deal African economies a severe blow.
鈥淎frica may lose half of its GDP with growth falling from 3.2% to about 2 % due to a number of reasons which听include the disruption of global supply chains,鈥� said Ms, Songwe, adding the Continent鈥檚 interconnectedness to affected economies of the European Union, China and the United States was causing ripple effects.
She said the continent would need up to US$ 10.6 billion in unanticipated increases in听health spending听to curtail the virus from spreading, while on the other hand revenue losses could lead to unsustainable debt.
COVID-19, Ms. Songwe said,听could reduce Nigeria鈥檚 total exports of听crude oil in 2020 by between US$听14 billion and US$ 19 billion.
The ECA estimates听COVID-19 could lead to Africa鈥檚 export revenues from fuels falling at around US$ 101 billion in 2020.
Remittances and tourism听are also being affected as the virus continues to spread worldwide, resulting in a decline in FDI flows; capital flight; domestic financial market tightening; and a slow-down in investments听- hence job losses.
Pharmaceuticals, imported largely from Europe and听other COVID-19 affected partners from outside the听continent,听could see their prices increasing and availability reduced for Africans.
With nearly two-thirds of African countries being net importers of basic food, shortages are feared to听severely impact food availability and food security.
Furthermore, negative听consequences听are expected to worsen, if COVID-19 develops into an outbreak in听Africa.
In addition, a decline in commodity prices could lead to fiscal pressures for Africa鈥檚 economic power houses听such as South Africa, Nigeria, Algeria, Egypt and Angola.
Speaking at the same Press Conference,听Stephen Karingi,听Director of the ECA鈥檚 Regional Integration and Trade Division, said there, however, was an opportunity听the Continent could take advantage of as听trading within the听African Continental Free Trade Area (AfCFTA) is set to commence this July.
鈥淭he intra-African market could help mitigate听some of the negative effects of COVID-19听through limiting dependence on external partners, especially in pharmaceuticals and听basic food,鈥� said Mr. Karingi, adding听diversifying economies听away from fuel-driven was听vital beyond COVID-19.
He emphasized听the need for听the continent to听urgently implement the听AfCFTA听as he urged听African countries who export drugs to听prioritize selling on the African market.
The ECA, in a presentation on the economic听effects of the COVID-19 on Africa, suggests听African governments could review and revise听their budgets to reprioritize spending towards mitigating expected negative impacts from COVID-19 on their economies.
As a safety net,听the think tank is urging governments to听provide听incentives for food importers to quickly forward purchases to ensure sufficient food reserves in key basic foods items.听
Mr. Karingi said听fiscal stimulus packages听are also crucial if the continent is to weather the COVID-19 storm which has听now claimed over听5,000听lives globally and infected听139,637 people.听
