DM Monitoring
PARIS: Africa has so far been spared the worst of the coronavirus pandemic in terms of cases and deaths but its economy has not been so lucky, especially the poorer, smaller countries dependent on a single resource or sector.
The spread of the disease has also picked up speed in recent weeks, stoking concerns that worse is to come.
Here are some key features of the pandemic’s economic impact on Africa:
For 2020, the International Monetary Fund (IMF) estimates that the economy of sub-Saharan Africa will shrink 3.0 percent, “the worst outcome on record”. However, it should then grow 3.1 percent next year — although this is a much slower pace than elsewhere in the world.
In terms of per capita income, it has fallen 5.3 percent and back to 2013 levels in the space of just a few months.
Abebe Aemro Selassie, the head of the IMF’s African division, highlighted the fact that unlike in the 2008-09 global financial crisis, sub-Saharan countries were in a much worse budgetary position, with fewer resources available to face the crisis than their wealthier peers.
African countries can be classified as three economic types:
1). Diversified, such as in West Africa, with Ivory Coast, Senegal and Ghana. In the east, Kenya, Uganda and Tanzania.
In these economies, activity has slowed significantly but they are still managing to grow, the IMF says.
2). Oil producers such as Algeria, Angola and Nigeria. They have suffered very badly from the plunge in crude prices, especially in the early months of the crisis.
Since then, prices have firmed slowly to arrive back at around $50 per barrel.
3). Tourism-dependent countries such as Morocco, Tunisia and the Seychelles. The pandemic has brought travel to a virtual standstill, grounding airlines, which are struggling to survive.
“The crisis has confirmed the differences between diversified countries and the exporters of industrial raw materials but has also impacted North African countries which were in a growth rebound thanks to tourism since 2016,” noted Clement Gillet, economist with Societe Generale.
Standing on its own, South Africa, the continent’s second-biggest economy, has been hit the worst given that it was already in recession before the crisis hit.
Its economy is expected to shrink 8.0 percent this year. Again, the picture is mixed when it comes to how different countries manage debt and raise fresh funds.
