Covoranavirus and the African Economy

Jun 18 17:38 2020 Salisu Garba Abdullahi Print This Article

The article analyzes the impact of coronavirus on economic activities of Africa and how lockdown and other restrictive measures affect welfare and poverty in Africa

Many people see coronavirus as one of the greatest calamities that have ever happened to humanity. The virus has claimed many lives and set the entire world economy into a state of quagmire. Some people see it as an economic virus on the ground that it has negatively affected the economic activities of many countries around the world ranging from a decline in total output,Guest Posting increase in number of people who lost their jobs, a rise in poverty incidence, and a decline in welfare, especially in Africa. This work seeks to analyze the effect of coronavirus on economic activities of Africa, and the effectiveness of lockdown and other restrictive measures in curtailing the spread of coronavirus and how these measures affect poverty and welfare.

However, it is important to begin by explaining what coronavirus is all about? Because many people specifically in Africa do not believe that the virus exists, and some see it as a conspiracy theory developed by the West. Coronavirus is a virus that causes respiratory infections in animals or humans starting from the common cold to more severe diseases. COVI-19 is the most recently discovered coronavirus (WHO, 2020). The most commonly found symptoms of Covid-19 are dry cough, fever, tiredness, and difficulty in breathing. It is important to note COVID-19 is not as deadly as one might think. According to the world health organization (WHO), only one out of every five people that contracted the disease is likely to become seriously ill. And that 80% of the people who got infected can recover without needing any hospital treatment.

The most challenging part of Covid-19 is that scientists are unable to develop the vaccine or drug that can be able to cure the disease, and also how the disease is quickly transmitted to other people. The disease can easily be spread through handshake with the patient, hugging, or when he sneezes, coughs or speaks. A lot of safety measures have been advocated by experts like covering one's sneeze or cough with tissue and throwing it properly in a dust bin, one should always use the face mask and frequently use hand sanitizer. Social distancing is also advocated by the experts by giving at least one meter away from other people. However, these measures prove to be ineffective in curtailing the spread of the disease as more new cases are increasing exponentially. As of early June 2020, the total confirmed cases stood at over 6million globally, with over 450,000 deaths. And this trend is likely to continue increasing.

The first case of Covid-19 was discovered in Wuhan, China, in December 2019. The number of cases kept on increasing and by late January the case had reached 1,700 with 171 number deaths. The increasing trend of cases and deaths forced the Chinese authorities to impose partial lockdown on some cities that were seriously affected. The lockdown has affected economic activities as businesses and industries were forced to temporarily closed. Transportation services including train services, domestic and international flights were also affected. Schools, markets, and movements of people were all restricted. As a result of these restrictive measures taken by the government, the Chinese economy has suffered a lot of challenges. According to the Indian council of world affairs, the industrial sector's value-added output declined by 13.5% in the months of January and February 2020. The manufacturing industry fell by 15.7% in the month of February. Similarly, employment had faced a major setback as a result of the lockdown as most people were restricted to go to their various places of work. The unemployment rate in China rose by 6.2% by the end of February.

On 30 January 2020, the World Health Organization (WHO) declared the coronavirus as a public health emergency of international concern. From then on countries around the world started to follow the footstep of China by imposing partial or total lockdown and social distancing measures. These restrictive measures taken by various countries around the world have severely affected the volume of world economic activities with the developed economies affected the most. For example, the US economy has been experiencing a major setback since the outbreak of the Covid-19 with the stock markets crashed it's lowest ebb since 1987. More than 30 million people lose their jobs. According to Gita Gopinath IMF's chief economist, the US economy is expected to contract by 5.9% in 2020 due to the pandemic. The United Kingdom is facing a similar challenge with over one million people out of jobs and the economy is likely to contract by 6.5% in 2020 against the initial forecast by IMF 1.4% growth. The Japanese factory activities have been contracted too. Germany's economy is not spared from the monster virus. As a result of this, the world economy is at the risk of losing over $9 trillion according to the IMF's forecast. And the volume of world trade of goods may drop by 10% to 30% in 2020 if the pandemic continues.

The African economy has not been spared from the effects of Covid-19. Although the continent has the least cases of coronavirus relative to other regions of the world but its economy has been badly affected. African countries mostly trade with developed countries and China than they do with each other. Therefore the economic crises faced by developed countries will definitely have a spillover effect on the African economy. China is the main supplier of goods to Africa the disruption in industrial activities in China affects the supply chain to Africa. This means fewer goods will be available for consumption and this affects aggregate consumption that leads to slower economic growth. The continent's growth is to drop from 3.2% to only 1.8% according to the United Nations Economic Commission for Africa's (UNECA) estimates. On the other hand, African countries have imposed a travel ban on most of the countries affected by Covid-19 and this action affects the employment and revenues they generate through tourism. The continent is generating more than $169 billion annually from travel and tourism. This amount represents 7.1% of the continent's GDP. And the sector provides more than 24.6 million jobs (World Travel and Tourism Council). Africa's tourism sector is expected to lose up to $7.2 billion dollars according to UNECA.

Another major setback faced by African countries is the crash in prices of crude oil in the global market. Countries like Nigeria and Angola find it hard to cope with the situation. Crude oil supply is the cornerstone of Nigeria's export with the cut in demand for the oil and crash in its price in the world market, the Nigerian economy is in big trouble. According to the United Nations Economic Commission for Africa, the exporters of crude oil in Africa are expected to lose up to $65 billion due to the pandemic. South Africa, which is the second-largest economy in Africa has been in recession since 2019. And the imposition of lockdown only makes the situation worst than it was before. The question is can Africa continue to impose lockdown and other social distancing measures? The restrictive measures have done more damage to Africa than the COVID-19 pandemic. Since lockdown has been adopted by many African countries unemployment and poverty have been on the increase. In Nigeria for example, the lockdown was first introduced on 30th March, 2020 in three states which include Lagos, Abuja, and Ogun where a lot of people have been lamenting the hardship this action has subjected them to.

The living condition in Africa is not the same with other parts of the world. Most of the people in Africa live below the poverty line (living in less than $1.9 day). Out of the 28 poorest countries in the world, 27 are from Africa (World Bank, 2019). Most people in Africa work in the informal sectors like unskilled workers and roadside vendors that sell some goods to earn their daily bread. These set of people if they did not work it would be extremely difficult for them to survive.
Another important thing to be taken into consideration is the absence of efficient infrastructure like power supply, water supply, and other amenities to support the imposition of the lockdown. As a result of that people find it difficult to comply. Similarly, the governments in Africa do not provide the necessary financial support to small scale businesses to survive during the pandemics neither provide palliatives to their people. Where the palliatives are provided there is the risk of diverting it to other purposes. For example, in Nigeria, there is a lot of corruption allegation attributed to the distribution of the palliatives. Finally, the system of government practiced in most African countries is not likely to provide the desired outcome. Countries in Africa mostly practiced democracy where the people have the right to criticize and sometimes protest the imposition of the lockdown. Unlike other countries like China where they practiced socialism and that is why the lockdown has been successful there.

The importance of restrictive measures and other social distancing strategies cannot be overemphasized in containing the spread of COVID-19 in Africa and the rest of the world. Given the success stories recorded in other parts of the world where it is properly implemented. But it is important to note that not every model that has been successfully practiced in other parts of the world can work in Africa. Leaders in Africa most work as a team and should try as a matter of urgency to come up with their unique ways of fighting the COVID-19 pandemic. Africa must open its economy again and learn how to live with the virus. Like what Muhammad Mahful, Indonesian minister of political, legal, and security affairs said " Coronavirus is like your wife, initially you try to control it then you realized you can't, then you learn to live with it". The lockdown strategy has done more damage to Africa than the Coronavirus itself. Economic activities must be open and then efficient safety measures have to be provided. Wearing a face mask must be made compulsory in all offices and business places. A distance of one meter must be maintained between people in all markets and other places where economic activities take place. Sufficient sanitizers and other protective equipments must be sufficiently supplied and made available to people at affordable prices.


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About Article Author

Salisu Garba Abdullahi
Salisu Garba Abdullahi

Salisu Garba Abdullahi is a writer and activist. He is also graduate student of economics at Sharda University, India. 

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