About 20 million jobs are at risk in Africa as the continent’s economies are projected to shrink in 2020 due to the impact of the coronavirus pandemic, according an African Union (AU) study.
So far, Africa accounts for just a fraction of total cases of the disease which has infected more than one million people worldwide, according to a Reuters tally.
But African economies are already facing an impending global economic downturn, plummeting oil and commodity prices and an imploding tourism sector.
In this video below, UN concerned about COVID-19 impact in Africa:
Before the onset of the pandemic, continent-wide gross domestic product (GDP) growth had been projected by the African Development Bank to reach 3.4% in 2020.
However, in both scenarios modeled by the AU study – seen by Reuters and entitled “Impact of the coronavirus on the Africa economy” – GDP will now shrink.
Under what the AU researchers deemed their realistic scenario, Africa’s economy will shrink 0.8%, while the pessimistic scenario said there would be a 1.1% dip.
Up to 15% for foreign direct investment could disappear.
The impact on employment will be dramatic.
“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.
African governments could lose up to 20 to 30% of their fiscal revenue, estimated at 500 billion in 2019, it found.
Exports and imports are meanwhile projected to drop at least 35% from 2019 levels, incurring a loss in the value of trade of around $270 billion. This at a time when the fight against the virus’ spread will lead to an increase in public spending of at least $130 billion.