IMPACT OF THE CORONA VIRUS ON AFRICA’S ECONOMY

If you were to ask most millennials to name some of the biggest predicaments that they have witnessed in their lifetime you’ll have to question their sanity if they were to leave out terrorism, HIV and AIDs, Ebola, famine and the recent member on the list  “the Corona virus COVID-19”. All these misfortunes tend to leave a painful mark on the face of the earth as they tend to affect people’s wellbeing and livelihoods playing the Grim Reaper role in breaking families. But apart from breaking families and claiming lives such calamities also bruise the global economic sector.  Recently, there have been reports of the virus in the continent’s countries like South Africa, Nigeria, and Senegal leading the World Health Organization (WHO) to declare the virus a global crisis. The WHO have also designated about US $12 billion to help combat the deadly disease. My main opinionated focus in this write-up is to discuss the effects of this global catastrophe on Africa’s already impaired economy.
Being China’s biggest trade partner, Africa just like most parts of the world, is most likely to suffer an economic blow with the Corona virus outbreak. Currently, there are about 10, 000 Chinese firms operating in Africa (www.bbc.com) which are expected to be put on halt. According to Dr. John Nkengasong Air traffic between China and Africa has risen by over 600% over the past decade as a result of the rapid expansion of Chinese investment in Africa. This doesn’t require one to be an expert in contagious disease prevention to know that the next move to further combat the spread of the disease in the continent is to suspend flights between China and Africa. The postponement of these flights will hinder the airline markets which also contribute to African Nations like Ethiopia which harbors Ethiopian Airlines, the continents biggest airline company. Globally, the airline industry is set to lose $29 billion (International Air Transport Association).
Economist Intelligence Unit has projected that the corona virus which has killed and infected thousands could take 0.5 to 1 percent off China’s GDP growth. Economists polled by Reuters expect Chinas growth to slump by up to 4.5% in the first quarter of this year  from 6% in the previous quarter (Aljazeera).Due to this deterioration China’s demand for African exports is most likely to go down. Some of the exports that African exporters should expect to reduce include minerals, petroleum products and other raw materials. These sales will not only affect the exporting countries but Africa as a whole. On the 4th of March 2020, the BBC reported that 90% of South Africa’s lobsters and sea weed are exported to China and with the corona virus epidemic thousands of jobs have been put on the line. Now this can be seen to indirectly affect countries like Malawi as well who has most of its citizens employed in the rainbow nation.
Africa’s tourism sector is also another part that is more likely to suffer from the deadly disease’s grip. Even though the decline in the tourists numbers have not started showing yet the impact is anticipated to be long term. This is so since the spread of the virus to European and American countries will not only end up restricting Chinese tourists but tourists from elsewhere as well since mobility will be contained due to the fear of the COVID-19 outbreak.
Another thing that African countries should brace for is the rise of borrowing costs. Due to the poor performance which may come about because of the aforementioned reasons leading to recession in most of our economies governments may introduce monetary policies as a remedy. The recession may also come about as a result of redirecting most of African budgets to precautionary measures in the health sector as a way of tackling the epidemic. The poor performance may also lead to an inflation in most of the global economies. According to theafricanreport.com much like in 2015, African countries are likely to see downward revisions in the coming weeks, as expectations around china are downgraded. As recently as 2015-16, adjusted expectations for China’s medium to long term economic growth rate, demand for resources and volatility in its financial market were felt across Africa.
Africa may not be directly affected in terms of the fatalities caused by the deadly virus but still, in a global community, such crises are not only for the country of origin to deal with but for us all as a collective. These are some of the things that should be taken note of if we are to write down in the history books the toll that the corona virus took on the face of the African continent and the rest of the world.