How Covid-19 will impact African economy

Written By: Dr Abdiqani Sheikh Omar

The writer, Dr. Abdiqani Sheikh Omar is a Senior WASH Strategic Policy Advisor atthe Ministry of Energy and Water in Somalia and Former Director General at Ministry of Women and Human Rights.

Covid-19 pandemic has resulted in mass production shut-downs and supplies chain disruptions due to port closures in China, causing global ripple effects across all economic sectors in Africa.

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Africa is beginning to feel the impact of the pandemic and plans to control and manage the humanitarian challenges of the virus need to be given a priority.

I am hopeful the rebound from Covid-19 will coincide with the implementation of the African Continental Free Trade Area (AfCFTA) in July 2020.

As applied in other continents, some African nations have applied lockdowns, which have brought economic activity to a halt in many African countries. In cushioning the virus impact on the economy, various Central Banks have employed measures to derail the pandemic burden.

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For Africa’s economies, the implications of these challenges are far-reaching. A slowdown in overall economic growth is already being felt, and this is acute in hard-hit sectors such as tourism.

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Many businesses, particularly SMEs, are under significant cost pressure and face potential closure and bankruptcy.That is likely to lead to widespread job losses.

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The pandemic will impact productivity across many sectors. Closure of schools and universities could create longer-term human capital issues for African economies and could disproportionately affect girls, many of whom may not return to school.

African governments might face rising deficits and increased pressure on currencies. In the absence of significant fiscal stimulus packages, the combined impact of these economic, fiscal, and monetary challenges could greatly reduce Africa’s GDP growth in 2020.

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Economic responses to the Covid-19 in Africa need to be structured with a view toward sustainability. The longer the pandemic lasts, the more difficult things will get for our continent.

Policymakers need to act swiftly and boldly by implementing historically large rescue programs with policies structured with a view toward sustainability. Swift, large and sustainable is what our present moment demands.


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