AFRICAN exports and imports are projected to slump by 35% with a value estimation of US$270 billion in the wake of the Covid-19 pandemic which has killed nearly 100 000 people globally.
In a report titled Impact of coronavirus (Covid-19) on the African economy, the African Union assesses the impact of the crisis. “The Covid-19 pandemic has hit almost all African countries and appears poised to worsen dramatically. The disruption of the world economies through global value chains, the abrupt fall in commodity prices and fiscal revenues and the enforcement of travel and social restrictions in many African countries are the main causes of negative growth.
Exports and imports in African countries are projected to drop by at least 35% from the level recorded in 2019,” the report states.
“This loss of value is estimated at around US$270 billion. To fight against the spread of the virus and medical treatment will lead to an increase in public spending in Africa estimated to be by at least (US)$130 billion.”
The report reveals that the International Air Transport Association points out that international bookings dropped by 20% in March and April, with domestic bookings declining by 15% in March and 25% in April. Ticket refunds have increased by 75% in 2020 compared to the same period in 2019. The report states that it is estimated that foreign direct investment will fall between 5% and 15%.
Among the recommendations made by the report include countries revising their budgets in order for them to prioritise health as well as scaling up social protection.
The impact on Zimbabwe is likely to be much worse as it is already facing major headwinds of a debilitating liquidity crunch, acute fuel and foreign currency shortages, low capacity utilisation, runaway inflation and a severely crippled health system. Some analysts have predicted that the country will suffer double digit recession of up to 20% as a result of the impact of the coronavirus scourge.