According to the United Nations, African states have recorded a $29 billion economic loss from the Covid-19 pandemic. The Economic Commission for Africa has estimated a 1.4 percent shave off $2.1 trillion of the African GDP following the ongoing economic disruption across the world. As per the statistics done, by the end of March, the annual economic growth is likely to go down from 3.2 percent to 1.8 percent.
The United Nations has also cautioned Africa countries as the situation may get worse in the coming months because the virus spread rate is going up day after day. Vera Songwe, the Executive Secretary of the Economic Commission of Africa, says that Africa might lose almost half of its Net domestic product. The main reason for this loss is the economic disruption caused by the Corona virus outbreak. For instance, in East Africa Community area, Rwanda, Kenya, and Tanzania have reported several cases.
Covid-19 lockdown scenario
For the past two weeks, African countries have urged people to remain at home so as they can reduce the spread of the dangerous Covid-19 virus. Lockdown number seems to increase each day because of the fear and panic experienced by the people. Many industries and companies are mainly affected by this lockdown policy. Some of the infected sectors are tourism, aviation, oil exports, as well as the agricultural industry. The listed industries are one of the pivotal sources of economic support in Africa.
For instance, countries that export petroleum products are expecting to lose billions of dollars of revenue as everyone is under lockdown. A good example is Angola and Nigeria. Furthermore, take a look at the aviation industry. All flights across the continent are banned, and that constitutes a sharp decline of Foreign Direct Investments.
Sluggish Economic development in Africa
Due to the Corona virus outbreak, the whole of the African continent expects to spend more than ten billion US dollars. Following the rapid increase of health situations. The urgent rise in the health budget constitutes a severe dent in the Africa economy. According to Dr. Songwe, the number one of Africa’s trading partners; China is severely hit by Covid-19.
Consequently, that will bring a negative impact on the Africa trade as well as the universal supply chains. According to the United Nations document. The increased interconnection between Africa and the rest of the world is the main reason the continent is exposed, first cases reported from Wuhan, China.
Health specialists have warned Africa that the virus may cause massive challenges to economic growth. For instance, take a close look at the situation, all flights in and out the continent are suspended. Large number of people who work for companies are indoors. All that revenue generated from the companies and industries is gone. The economy is negatively affected. It will be wise for Africa nations to come up with new resolutions to fix this problem because if this goes on for long, eventually the economy will fall.