Potential health and economic disaster looming for African countries as Africa Centres for Disease Control and Prevention (Africa CDC) revealed that there are now 7,028 confirmed cases of Coronavirus (COVID-19) in 50 countries across the continent.
The coronavirus case numbers Compared to Europe remain relatively low: over 7,028 cases in 50 African countries. But those figures are rising quickly, and there are real worries that the low case numbers might reflect low testing capacity.
The virus seems to spread equally well in African countries and those with compromised immune systems are particularly vulnerable. Millions in Africa suffer from HIV/AIDS or tuberculosis and lived in cramped unsanitary settlements yet there was no economy shutdown.
Mitigating the tremendous economic hardship and personal suffering from COVID-19 is undoubtedly the priority, but policymakers should also start thinking about how they could use the fallout to shape a more just, sustainable, and prosperous vision of the future.
Africa countries currencies are losing value against the dollar in an uncertain global economy. Several countries have both of these challenges, as international investors start to turn away from Africa to worry about the problems at home.
Like another big oil producer, Angola, Nigeria has seen oil prices drop by some 50% since the start of the year. IMF estimates “each 10% decline in oil prices will, on average, lower growth in oil exporters by 0.6% and increase overall fiscal deficits by 0.8% of GDP.”
The continent is already vulnerable to debt distress risks, is bearing the brunt of this shock to global demand. Three of its six leading economies (Algeria, Angola, Egypt, Morocco, Nigeria and South Africa, i.e., 65% of the continent’s GDP) are highly dependent on oil (Algeria, Angola and Nigeria)
many African countries have piled on debt to meet various needs, from infrastructure to health and education. But the terms of that credit haven’t always been the best, and the repayments will be much more onerous in the changed economic environment.
Though, IMF and the World Bank have already called for debt relief for the world’s poorest countries, but also those with an unsustainable debt situation. Many African countries fall into both camps
Coronavirus will not just bring a health crisis,but affect exchange rate…The depreciations will push up local inflation and trigger monetary policy and financial tightening.” Meaning the repayments on the rising dollar debt will be even more difficult to cover.
The disease pandemic will have to teach Africa countries to start processing their raw materials, which alone is actually capable of creating value and jobs and diversifying the productive base of economies. Via its own production, Africa will be able to supply its future domestic market of more than two billion inhabitants and reduce its dependence on the rest of the world.
It’s truly toxic for Africa limiting itself to exporting raw materials to the rest of the world and passively waiting in return to receive the volatile financial resources that fuel renter economies