Economic Impact of COVID-19 on Africa

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With all the major world economies going into recession due to COVID-19 not even a single nation across the world has remained unscathed. With almost the entire world on an unprecedented lockdown, the global economy has gone on a standstill, while only the daily essentials and medical supplies are still being bought and sold. All other supply chains and economic transactions like export/import, international travel and tourism, retailing, merchandising, etc. are impacted by the respective governments.

Till now, in Africa, the highest recorded cases of COVID-19 has been in South Africa followed by Algeria, Egypt and Morocco. If the outbreak becomes more severe then it would put tremendous strain on the already weak African healthcare system. 

As per reports published by South Africa’s Rand Merchant Bank, the countries which are at high economic risk due to COVID-19 are Kenya, Ghana and Egypt. Apart from this, Angola, Congo, Equatorial Guinea, Zambia, South Africa, Gabon and Nigeria would likely have their economic growth impacted as they export heavily to China.

Africa’s monetary policies are also limited for the effective mitigation of the pandemic, due to which many African countries are seeking debt pardoning and requesting international aid.

Effect on Pharmaceutical and Healthcare

Africa may face a medicinal supply shortage in future as many countries across the world have limited their exports in the generic and COVID specific drugs. WHO is currently aiding 36 African countries with testing kits and also training their healthcare workers. Personal Protective Equipments (PPE’s) like N95 masks and infection prevention suits are being supplied by the WHO. Only the local industries which are manufacturing drugs and PPE’s are likely to benefit from their business. It’s, therefore, essential for them to scale up their production to meet the huge surge in demand that is expected to arise across the continent. 

Retail and Software Sectors Benefit

Many companies have asked their employees to work from home. Those in the software developmental work profiles are expected to be less affected. The consumer production lines, construction, petroleum and all mining projects are already reeling under pressure and will be the worst hit. Online shopping is mildly effected as many people are opting for this option so as to avoid going out in crowded places. If the situation persists and spreads further in the continent the online shopping industry may be up for makeover to satisfy the resultant sales spike.

TOA Correspondent

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