African Development Bank Predicts Bankruptcy in Africa amid the Virus

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Up to 50 million Africans might drown in poverty and bankruptcy amid coronavirus pandemic. The African Development Bank states the western and central regions of Africa could be affected most. As a result, Nigeria, the most populous state in Africa may experience an upsurge in poverty.

According to the bank’s ratings on living standards in Africa, a third live below the international poverty line, i.e. $1.90 US every day. With the flagging economy, Africa Development Bank predicts bankruptcy in the continent. However, the African economy could probably recover in 2021 if the governments impose restrictions to control coronavirus spread.

Bankruptcy and the Impacts of the Health crisis

There has been a surge in corona cases since WHO declared it a pandemic. It has impacted on the African economy owing to the poor financial status. Governments have tried various precautions to control its spread. However, the virus hasn’t seized and contributed to crippling economies.

Governments had imposed lockdown as their main precaution. Due to both partial and economic lockdown in different parts of the country, there was an economic reduction. This decrease is because of the closure of businesses in major towns of Africa. In turn, the closure negatively impacted on earning and profits across the country. Even the investment rates declined since most businessmen are investors.

Numerous cases of unemployment are also one of the problems related to the health crisis. Amid lockdown, most cooperatives closed down. This is right from travel companies to hotels. Following the order to restrict movement in and out of African, large companies like SAA closed down. Similarly, hotels also closed due to the corona pandemic. The closure resulted in most employees losing their jobs.

Loss of jobs comes handy with poor living standards. Amid the pandemic, most civilians in Africa have been living from hand to mouth. Some have even lost their homes upon failure to meet the monthly rent. Altogether, the fight against coronavirus is a difficult task.

The deteriorating economy has also affected stock performance in the majority of African states. Moreover, the more the economy plunges, the more the GDP reduces. The GDP of Africa’s economy contracted between 1.7 percent to 3.4 percent.

Solutions amid the pandemic

Countries across different continents have embarked on reopening seeking to save their economic status. Most especially the African states that are drowning in debt. Some countries in Africa have adopted opening in phases. Authorities have imposed such acts to return to normalcy.

Distribution of stimulus is another form of solution. Organizations, authorities, and governments have been giving out stimulus in the form of money, food, employment benefits to compensate the less fortunate.

Research organizations have also been endorsing optimism, restoring the hope of coming up with the corona vaccine. This intension is to urge people to remain strong despite the medical crisis. Countries in Africa are also endorsing for precautionary measures to control the virus.

Sanitization is now the main talk. Right from social media, people are endorsing for washing of hands. People have also been urged to wear masks to prevent intact with potential asymptomatic corona carriers.

Social distancing also plays a significant role. As a matter, governments have banned social gatherings. While for the essential ones like weddings, and funerals, governments have advised people to limit numbers.

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