The African Union has said that its latest study shows that about 20 million people are at risk of losing their jobs in Africa this year due to the coronavirus pandemic.
The AU study also revealed that the continent’s economies would shrink in 2020 due to the impact of the coronavirus pandemic.
As at April 5, 2020, Africa has only recorded over 8,000 cases of coronavirus with deaths hitting almost 400, but Africa’s figures are still the lowest across the world.
However the continent’s economies are being hit significantly due to plummeting oil and commodity prices and an imploding tourism sector.
About 15% of foreign direct investment into Africa could disappear this year and commodities imported could become scarce skyrocketing cost of products.
Exports and imports are projected to also drop at least 35% from 2019 levels, incurring a loss in the value of trade of around $270 billion.
Africa’s oil producers will be among the worst hit, with Nigeria and Angola alone losing $65 billion in income.
The AU study entitled “Impact of the coronavirus on the Africa economy” said Africa’s GDP growth will shrink further this year.
GDP to shrink on the continent
Just before the pandemic (GDP) growth for Africa was projected to reach 3.4% this year by the African Development Bank.
The AU researchers now say Africa’s economy will shrink by 0.8% although there are indications it could get worst, shrinking by 1.1%.
All these challenges according to the AU researchers would mean employment will be badly hit.
“Nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction on the continent if the situation continues,” the analysis said.
For many African economies, remittances sent from abroad form a significant portion of cash flow.
But the study found that “With economic activity in the doldrums in many advanced and emerging market countries, remittances to Africa could experience significant declines”.
African governments are also projected to lose up to 20 to 30% of their fiscal revenue, estimated at 500 billion in 2019.
According to the AU study “Under the average scenario, the tourism and travel sector in Africa could lose at least $50 billion due to the covid-19 pandemic and at least 2 million direct and indirect jobs”.
Africa’s major tourism spots Seychelles, Cape Verde, Mauritius and Gambia will shrink at least 7% due to the pandemic, the study said.
More findings of economic challenges
Global auditing firm McKinsey & Company’s has already estimated that Africa would lose up to $200 billion in 2020 due to the current coronavirus pandemic.
A paper put together by experts at the auditing firm said the pandemic will led to a cut of 3 to 8 percentage points to Africa’s GDP growth.
Entitled; “Tackling COVID-19 in Africa” the auditing firm released its predictions this week to give an outlook of Africa’s economies amid the pandemic.
The auditing firm predicts that African economies could experience a loss of between $90 billion and $200 billion in 2020.
Already African Airlines have reportedly lost $400m due to suspension and cancellation of flights to and from China since the outbreak of the coronavirus.
Most airlines suspended and even canceled flights to and from China in February when the outbreak became serious.
Source: Africafeeds.com
