Sunday, May 9, 2021

ECA Estimates Billion Dollar Losses For Africa Due To Covid-19 Impact

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The United Nations Economic Commission for Africa (ECA) has warned that the unfolding coronavirus crisis could seriously dent Africa’s already stagnant growth with oil exporting nations losing up to US$65 billion in revenue, as crude oil prices continue to tumble.
Speaking at a press conference in Addis Ababa, ECA Executive Secretary Vera Songwe, said having already strongly hit Africa’s major trading partner China, COVID-19 was inevitably impacting on Africa’s trade.

She said although a few COVID-19 cases have been reportedly confirmed in some countries in Africa, the crisis was set to deal a severe blow to African economies.

Songwe went on to say that “Africa may lose half of its GDP with growth falling from 3.2% to about 2% due to a number of reasons which include the disruption of global supply chains’’; that the continent’s interconnectedness to affected economies of the European Union, China and the United, is causing ripple effects on the continent.

Songwe disclosed that the continent would need up to US$10.6 billion in unanticipated increases in health spending, to curtail the virus from spreading while on the other hand, revenue losses could lead to unsustainable debts.

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“The ECA estimates COVID-19 could lead to Africa’s export revenues from fuel falling at around US$101 billion in 2020. Remittances and tourism are also being affected as the virus continues to spread worldwide, resulting in a decline in FDI flows, capital flight, domestic financial market tightening and a slow-down in investment; hence job losses,” she said.

Also speaking at the press conference was Stephen Karingi, the Director of the ECA’s Regional Integration and Trade Division. Mr. Karingi said the continent could take advantage of trading within the Africa Continental Free Trade Area (AfCFTA) which is set to commence in July 2020.

“The intra-African market could help mitigate some of the negative effects of COVID-19 through limiting dependence on external partners especially in pharmaceuticals and basic food items,” Karingi said; that there is need for the continent to urgently implement the AfCFTA and urged African countries who export drugs, to prioritize selling on the African market.

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