Africa has until now not been as affected as other places by the CCP virus. But, as of May 13, every African country has recorded an infection. According to the latest data by the John Hopkins University and Africa Center for Disease Control on COVID-19 in Africa, As of June 10, there were over 140,000 confirmed cases of virus across the continent with at least 5,000 deaths. If the COVID-19 is not properly contained, it could affect all sectors of the African economy, including the loss of human life.
To date, the economic impact that COVID-19 and the lockdowns are having on developing countries has not been assessed in full. Yet, early studies conducted by the International Food Policy Research Institute (IFPRI) have shown that many African economies are showing signs of being severely affected in a number of ways. The non-poor urban households face the largest income losses. Poorer households, who were already on the brink of starvation even before the pandemic, are the most vulnerable.
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Nigeria became Africa’s third most impacted country on Friday, June 5 after 9,000 infections were confirmed. The only countries that have more cases are South Africa and Egypt. Nigeria’s food prices have skyrocketed, increasing up to 50 percent in some instances. Locals have blamed the government for implementing the lockdown, claiming that it’s causing more harm than good, especially as Nigeria’s informal sector was hit hardest.
Logistics from a long-distance trucking firm, Kobo360, reported that 30 percent of its fleet across Nigeria, Kenya, Togo, Ghana, and Uganda was not operating as a result of the COVID-19 lockdown. There were also several reports of farmers saying that many crops were left rotting in the fields. Produce delivered at depots were not collected by the trucks, and millers complained that they could not get their milled rice to buyers.
As domestic crops are wasting away and businesses go downhill, the imports on which the regions relied on have also dried up as Africa’s major suppliers like India, Vietnam, and Cambodia have since drastically reduced or even banned rice exports. This was put in place as a measure to protect their countries from shortages.
Figures from the U.S. Department of Agriculture (USDA) reflect that Nigeria imports at least a third of what it consumes. Countries across sub-Saharan Africa rely heavily on imports for roughly 40 percent of rice consumption. Outside East Africa, for countries such as Nigeria, growing rice is crucial, especially since the recent plague of locusts practically decimated crops intended for this year’s consumption. “If imports don’t pick up, East Africa alone could face a shortfall of at least 50,000-60,000 tonnes by the end of the month,” said Mital Shah, managing director of Kenya-based Sunrice, one of the region’s largest rice importers.
South Africa’s economic growth projections deteriorated alarmingly after the government imposed one of the strictest lockdowns from March 27. The SARB (South African Reserve Bank) anticipates a GDP decrease of 7 percent in 2020, the first full-year growth slump since 2009. The economy is facing the worst full-year GDP growth performance since World War 2. Many more people, half of whom live below the official poverty line, are at risk of hunger because of the shutdown. Nigeria is Africa’s largest economy and is estimated to have had a 38 percent drop in GDP during the five-week lockdown, beginning late March to the end of April. Rwanda’s GDP almost halved during that country’s six-week lockdown.
The lockdown measures are certainly playing a large role in disrupting domestic supply chains and halting food production over the entire African continent. This has radically intensified economic and food insecurity.
The effects of the lockdown on Africa’s economy are a huge cause for concern. Facing the pressure of enforcing city-wide lockdowns is simply impossible in many parts of the continent. The majority of city inhabitants work in the informal sector, and they simply cannot afford to stay at home.
The stupendous economic costs from the lockdown are making it difficult for governments to maintain support for their policies.
“To transform its economies, Africa needs more than economic growth, or else health, economic and political shocks will continue to haunt Africa,” the Africa Center for Economic Transformation (ACET) studies advised. The solution lies in the diversification of both production and exports.