IMPACTS OF CORONA VIRUS ON AFRICAN ECONOMIES
Effects on the African Economy
In Wuhan, China, the spread of Coronavirus infections has had a significant impact on world economics. There have been deaths and lockdowns in countries around the world as authorities fight the spread of the disease. In Africa, the sickness has been documented in more than 20 nations, including the United States. Lockdowns were put in place by the vast majority of African countries to prevent foreigners from entering and exiting their borders. People in some states have been advised to stay at home and avoid travel and business as a precaution. Numerous African countries’ economy have been adversely affected by the aforementioned restrictions.
Export and import commerce is the mainstay of the economy in the majority of African countries. Economic Commission for Africa (ECA) estimates that exports account for half of Africa’s GDP. Crops like coffee and tea, as well as crude petroleum products like crude oil, are shipped out of the country. Other minerals such as gold, copper, and diamonds are also exported from some countries.. To the United States, Europe, Asia, and Australia are the most common destinations for our items. COVID-19 has made it impossible for the specific and their consumers in the worldwide market to engage in these kinds of commercial operations. As a result, foreign travel involving businesspeople and their products has been restricted by the governments. Oil-exporting countries including Egypt, Tunisia, Morocco, Nigeria, and Libya are expected to lose more than $65 billion as a result of COVID-19, according to the Economic Commission for Africa (n.d.). As a result, prominent global economies, such as the EU, China, and US, are experiencing unfavorable market circumstances for oil goods.
A large number of African nations also rely on the importation of finished products from developed nations like the United States and China. Electronics, machinery, finished petroleum products, and household goods are the most common items. africon GmbH was Africa’s top importer in 2018. (n.d.). These products are unavailable in the market due to a lack of imports by retailers and wholesalers as a result of the present restrictions on overseas travel. Lockdowns imposed by the various governments have resulted in the closure of most retail and wholesale firms. Governments have been unable to recover any income from firms that report custom charges and taxes levied on the commodities that they sell (Fernandes, 2020). Economic growth has been severely curtailed as a result of these countries’ lower GDPs. Economic collapse could be imminent if the current COVID-19 bite persists.
According to this study, it is clear that the vast majority of African countries are still poor, relying on foreign help and debt to sustain their economies. (n.d.). A number of African countries have invested their limited resources in the fight against the COVID-19 epidemic, which has spread to Europe and the United States. This means that some countries will be unable to pay back their loans on time as a result of this. Many African countries’ economic progress has been stifled by rising foreign loans, as a large portion of their revenues are used to pay off the debts. (ECA predicts billions of losses in Africa due to COVID-19 impact | Africa Renewal) (n.d.).
Africa is a popular tourism location. Tourism is Africa’s second-largest industry, behind exports, according to the Economic Commission for Africa. An estimated 8.5% of Africa’s GDP is generated by tourism, according to a study conducted in April 2019 of Africa’s tourism market. (n.d.). Since the emergence of the COVID-19 pandemic, many governments have halted foreign travels as a precaution. Visitors to Africa are not as numerous as they once were. The upshot is that numerous states are losing money on tourism. Much of this has had a profound effect on the economic performance of many countries. As a result, several countries may struggle to return to their pre-crisis economic positions if the situation is not significantly contained.
REFERENCES
COVID-19 is estimated to have cost Africa billions of dollars, according to the ECA (n.d.). Covid-19 is estimated to cause billions of dollars in economic damages in Africa, according to the ECA (https://www.eca.org/news/coronavirus).
Theodore N. Fernandes, Jr. (2020). An analysis of the global economic impact of the Coronavirus Outbreak (COVID-19). SSRN 3557504 has it.
For the month of April 2019, we examined the African tourism market. (n.d.). Find out more about Africa’s tourist market in April 2019 with this article from atta.travel: https://news.atta.travel/2019/04/an-analysis/
This month’s SOTM is July’s. africon GmbH was Africa’s top importer in 2018. (n.d.). Get this data by going to Africa’s most important imports in 2018 at https://www.africon.de/
International help in Sub-Saharan Africa (PDF). (n.d.). The impact of foreign aid on Sub-Saharan Africa, retrieved from https://www.researchgate.net/publication/330934586
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