The Economic Commission for Africa (ECA) has warned that Africa may lose half of its GDP due to the impact of coronavirus across the globe.
The UN body made this known in a statement. According to ECA Executive Secretary, Vera Songwe, COVID-19 was inevitably impacting Africa’s trade having already strongly hit Africa’s major trading partner, China.
Songwe said, “Africa may lose half of its GDP with growth falling from 3.2 per cent to about 2 per cent due to a number of reasons.
“They include the disruption of global supply chains,” She said.
She also added that the continent’s interconnectedness to affected economies of the European Union, China and United States was causing ripple effects.
Songwe said Africa 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 debt.
Songwe said COVID-19 could reduce Nigeria’s total exports of crude oil in 2020 by between US$14 billion and US$ 19 billion.
The ECA estimates COVID-19 could lead to Africa’s export revenues from fuels falling at around US$ 101 billion in 2020.
Songwe explained that remittances and tourism were also being affected as the virus continues to spread worldwide.
She said this would result in a decline in FDI flows; capital flight; domestic financial market tightening and a slow-down in investments – hence job losses.
The global pandemic has claimed over 5,000 lives globally and infected 139,637 people.
