This year has been one of the worst years ever. This is due to the coronavirus pandemic that has disrupted all economic sectors. The epidemic has caused a considerable decline in the global economy. Several countries have tried to put measures to mitigate the effects of the pandemic. International Monetary Fund (IMF) estimates the economic decline in Sub-Saharan Africa. However, this might not be the case taking into action the current play of events.
COVID-19 has dramatically affected the stock market since prices of stock are fluctuating and hence unpredictable. Recently, Warren Buffet gave up on his airline stocks, and he received critics from day traders. Besides, the pandemic has caused many people to close down their businesses, such as salons, bars, and restaurants.
The tourism sector that contributes positively to a nation’s economy received a heavy blow from the pandemic. Many countries had closed down their borders to curb the virus’s spread, and they lost a lot of money. However, countries such as Kenya have relaxed their measures and is ready to receive tourists from the rest of the world.
The pandemic did not only affect tourism, businesses, and the stock market, but also it made people lose jobs. Many companies lost a lot of money, and they could not pay salaries to their employees, hence laying them off. In the United States, millions of people lost jobs, which affected the US economy. The government of the United States gave relief funds to people to help them cope with the situation.
COVID-19 and the Global Economy.
The International Monetary Fund estimates a 4.4% decrease in growth this year as the world’s economy tries to recover from the recession.
Sub-Saharan Africa and Economic Recovery.
The IMF relayed that developing states are doing better than developed countries. In the Sub-Saharan African countries, the lending agency predicted growth to decline by more than 2.5% (2020). However, there might be some growth of over 3% currently forecast for next year.
According to this forecast, some states could show positive growth. These countries are Botswana, Ethiopia, Guinea, Tanzania, Ivory Coast, Kenya, and Ghana. Other countries, such as Nigeria, could lose more than 3 points on its economic growth. South Africa, Africa’s most industrialized state, could have an economic decline of over 7.5%. SA was already in an economic recession before the pandemic struck the African Continent.
The Economy of Africa
As of 2013, Africa was the globe’s fastest-growing region at more than 5% a year. The GDP increases by an average of more than 5.5% a year between 2013 and 2023. In 2017, the ADB announced Africa to be the globe’s 2nd-fastest growing economy and predicts that average growth will rebound to over 3% in 2017. Growth was to rise by more than 4% in 2018. Throughout the region, growth has been present, with over one-third of African states posting high growth rates and another 40% growing between 4%-6% annually.
Many countries across the world are hoping that scientists may come up with a vaccine. This may impact the economy positively and encourage more states to resume their operations normally.
MORE:
- What Africa Should Emulate from Asia’s Economic Growth
- South Africa’s Economy Contracts 51% in the 2nd Quarter
