The last continent to face up COVID-19, Africa ‘needs to wake up’

Piling on more debt on to the shoulders of developing countries will not help them recover from the Covid-19 crisis, write Isabelle Brachet and Maria Jose Romero. EPA-EFE/ISRAEL OPHORI

As Europe and North American countries go into self-imposed economic and social lockdown to curb the coronavirus (COVID-19) pandemic, Africa remains the continent least affected by the virus. Still, a raft of African governments were quick to impose travel bans on airlines carrying passengers from Europe last week.

But there’s no room for complacency. “Africa should wake up, my continent should wake up,” World Health Organisation chief, Tedros Adhanom Ghebreyesus, said on Thursday (19 March).

WHO officials confirmed on Thursday that there had been 760 confirmed cases of coronavirus across the 54 African countries, the majority of them in Egypt, South Africa and Algeria.

The WHO believes that lessons learnt from the Ebola crisis in 2014 have improved the resilience of African healthcare systems and their capacity to test and successfully impose quarantine.

Botswana, Uganda and Zambia have already announced school closures from next week, even though only Zambia has recorded two confirmed cases. Lagos, Nigeria’s economic hub, will also impose school closures.

South Africa, meanwhile, which has around 150 confirmed cases, has declared a state of national disaster, restricting travel, closing schools, and banning mass gatherings.

Thirty-three of 47 sub-Saharan African countries currently have testing facilities, a dramatic increase from January when only South Africa and Senegal were equipped, and health officials across sub-Saharan Africa say there has been an unprecedented level of mobilisation for COVID-19.

Yet health officials in a number of countries concede that the number of cases is far higher than those confirmed. Sudan’s first case was reported posthumously, indicating that the virus has been present for some weeks, and many of the continent’s poorest countries lack testing facilities.

There are also fears that social distancing will be impossible for poor countries with high population density.

For the moment, African is likely to suffer a less severe economic hit than Europe. While Europe and North America are staring at a recession likely to be deeper than the 2008 financial crash, the United Nations Economic Commission for Africa (UNECA) now estimates that Africa’s GDP growth rate will fall from 3.2% to 1.8% this year.

Yet unlike in Europe, few African countries have the fiscal space to come close to matching the fiscal stimulus packages that are about to be unleashed to prop up businesses in wealthy economies.

Beyond central bank rate cuts, most African governments will be able to do little more to cushion the effects. South African President Cyril Ramaphosa’s government already faced a weak economic outlook and a credit rating downgrade to junk status that will “prevent the government from announcing significant stimulus”, says Capital Economics’ John Ashbourne.

The bulk of the severity of the economic hit is likely to be dictated by China, where COVID-19 originated.

Though China is expected to avoid recession in 2020, its growth rate is now forecast to fall to 4.5% from 6%. Demand for Africa’s raw materials and commodities in China has already fallen and Africa’s access to industrial components and manufactured goods from the region has been reduced.

“This is going to deal a very severe blow to growth,” said Vera Songwe, secretary-general of the United Nations Economic Commission for Africa, “when you look at the economics, I think that is where the big story is for Africa. We are being severely affected.”

Oil and commodities exporters – who have seen oil prices tumble to around $30 per barrel and copper prices plummet – will be particularly badly hit, according to the most common thesis. The UNECA reckons that Nigeria could suffer a $19 billion hit, largely from lost oil revenues.

Yet that view is not universally shared. Imposing additional barriers to trade will hit regional trade hubs. That puts the likes of South Africa, which has already closed almost half of its 72 land border crossings and two of its eight sea ports, as well as Kenya, Ghana and Morocco in the economic firing line.

A report by South Africa’s Rand Merchant Bank argues that the economic impact on Africa will depend on individual countries’ trade links with China.

As a result, Rand’s research believes that Kenya’s economy has the highest overall COVID-19 risk, followed by Ghana and Egypt, in large part because of the recent cancellation of ships scheduled to dock at the port of Mombasa, a trading hub which serves the wider East African region.

Covid-19 has also temporarily derailed planned talks in Addis Ababa aimed at completing the African Continental Free Trade Area, which is scheduled to launch on 1 July. Insiders say that without these talks being speedily re-arranged via teleconferencing, the July deadline will be missed, itself a symbolic blow to the continent’s plans to boost internal trade.

It also threatens to further delay the talks between the EU and the African, Caribbean and Pacific community on the successor to the Cotonou Agreement.

The Cotonou pact was last month extended until December, with the EU’s International Partnerships Commissioner Jutta Urpilainen setting an April deadline to finalise a new deal. That now looks almost certain to be missed.

[Edited by Zoran Radosavljevic]

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