Addis Ababa, March 14, 2020 (FBC) – The Economic Commission for Africa (ECA) on Friday warned the unfolding coronavirus crisis could seriously dent Africa’s already stagnant growth with oil exporting nations losing up to $65 billion in revenues as crude oil prices continue to tumble.
Speaking at a Press Conference in Addis Ababa, ECA Executive Secretary, Vera Songwe, said having already strongly hit Africa’s major trading partner, China, COVID-19 was inevitably impacting Africa’s trade.
She said although a few COVID-19 cases have been reported in some 15 countries far, the crisis was set to deal African economies a severe blow.
“Africa may lose half of its GDP with growth falling from 3.2% to about 2 % due to a number of reasons which include the disruption of global supply chains,” she said.
The Executive Secretary added the continent’s 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 $10.6 billion in unanticipated increases in health spending to curtail the virus from spreading, while on the other hand revenue losses could lead to unsustainable debt.
COVID-19, Songwe said, could reduce Nigeria’s total exports of crude oil in 2020 by between $14 billion and US$ 19 billion.
The ECA estimates COVID-19 could lead to Africa’s export revenues from fuels falling at around $101 billion in 2020.
Remittances and tourism 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 – hence job losses.
Pharmaceuticals, imported largely from Europe and other COVID-19 affected partners from outside the continent, 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 severely impact food availability and food security.
Furthermore, negative consequences are expected to worsen, if COVID-19 develops into an outbreak in Africa.
In addition, a decline in commodity prices could lead to fiscal pressures for Africa’s economic power houses such as South Africa, Nigeria, Algeria, Egypt and Angola.