COVID-19: Expected effects on African States

The magnitude of the effect of COVID 19 to Africa will depend on the public reaction to the pandemic, the spread of the disease and the policy responses put by the respective governments. In this article, I will discuss economic, social and geopolitical effects that are likely to face Africa as a result of COVID-19 spread.

Economic effects: Both demand and supply side of the economy are likely to be negatively affected. On the demand side, the production firms will close meaning factors of production; capital, labour will be underutilized and if the pandemic continues for a long time, technology will start experiencing the shocks. Organizations will employ downsizing to respond to the expected poor economic conditions through retrenchment. Production will go down and supply will not be able to offset the increased demand. With sensitive consumers, depleted savings and income, demand will eventually decrease. With citizens difficulty to afford goods the government and NGOs will intervene in the market as buyers. This increased demand will create pressure on already struggling supply side leaving the market imbalanced.Unemployment rate will increase especially for countries like Namibia, Angola and South Africa which are already facing high unemployment rates.Tourism will be hit hard as the lockdowns progress in different African countries and is likely to take too long to recover specially in East Africa whose economies partially depend on tourism. Decrease in foreign aid, foreign financing from remittances, FDI flows, and capital flights will be experienced in the continent. Africa’s GDP is expected to fall from the current 3.2% to about 2%

Social effects: Education programs will be distorted in Africa where schools have not yet adopted distance learning and the tutors are not equipped with the virtual learning tools. Poverty and famine is likely to cripple most economies in South and Horn of Africa. Women and the elderly are the majority of farmers in Africa and are the most vulnerable to the disease and if Africa is hit hard, food insecurity will be inevitable. The Horn of Africa is more susceptible as it has been constantly hit by drought and famine and this pandemic is not likely to spare the region. Crime rate is going to increase exponentially as the young people are laid off and informal sectors cripple without market. The weak health sector in most African countries will be overstretched but with Africa’s experience in dealing with pandemics such as Ebola, Malaria and Tuberculosis and the continents' proactive response to the disease, the mortality rate will be lower than in Europe or Asia. But this will depend on the availability of testing kits, ventilators and public attitude towards the disease.

Geopolitical effects: After the spread of the pandemic stops, Africa will have to realign itself with the superpowers. Africa has been a recipient of funding and aid for a long time and this is likely to change as the pandemic will have adverse economic impact on the superpowers leaving them with the urge to inject capital and establish aid programs for their affected sectors. China, the greatest supplier of cheap goods and constant cheap and accessible funder for infrastructural projects will strategically repriotise its interests in Africa and thus other powers like India, Japan and Turkey may plug the gap and position themselves as alternative development partners of African continent. Oil producing countries whose main income comes from oil exports will feel the crisis in the short run as oil prices and China’s demand for the good continue to decline. If this continues, these African economies will face recession. Unstable nations in Africa such as Somalia, South Sudan, DRC and Burundi will be tested and both global and regional powers may want to intervene mainly to control the resources and rebuilt their economies from Africa.

It is clear that Africa is expecting economic, social and geopolitical implications which as per now, seems inevitable and it is therefore important for the continent and its inhabitants to be well prepared for the forecasted effects. The common citizen, youth and women are likely to feel a greater impact than other groups. These are the people in small-scale cross-border trade, startups, Small Medium Businesses and the majority in the informal sector. It is however important to note that during global crises, challenges rarely respect boundaries, classes and so the world shall all feel the impact.

Ideas were borrowed from,

The World Bank, (2020).COVID-19 Drives Sub-Saharan Africa Towards First Recession in 25 years https://www.worldbank.org/en/news/press-release/2020/04/09/covid-19-coronavirus-drives-sub-saharan-africa-toward-first-recession-in-25-years

Mishra A. (2020) Covid-19 and its Impacts on Africa: Are African countries ready to handle a potential outbreak? https://www.orfonline.org/expert-speak/covid19-its-impact-africa-63541/