WHO says COVID-19 economic impact in Africa more severe than disease itself as continent struggles to raise remaining $44 billion of $110 billion needed

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The economic impact of COVID-19 in Africa is more severe than the disease itself, at least for now, the World Health Organization Africa region said on Thursday. But the disease is accelerating aggressively and dangerously in the region, the data show.

The comment was made by Dr Matshidiso Moeti, WHO Regional Director for Africa, during a virtual media briefing on COVID-19 update in the region.

Matshidiso Moeti
Matshidiso Moeti

Also in attendance were Dr. Amani Abou-Zeid, Commissioner for Infrastructure and Energy at the African Union Commission (AUC), Prosper Zo’o Minto’oRegional Director, Western and Central Africa, International Civil Aviation Organization (ICAO) and Dr Michel Yao, World Health Organization Emergency Operations Program Manager. It was moderated by Adrian Monck, Managing Director, World Economic Forum. 

The number of new cases in Africa has been rising dramatically in recent weeks, however, Africa still has one of the lowest infection rates in the world. On Wednesday, Africa Center for Disease Control reported that cumulatively, 405,581 people have contracted the virus in Africa, 193,169 have recovered and 10,165 have died. This remains a bit low compared with the over half a million people who have died globally and more than 10.5 million infections that have been recorded in the world.

But, even with relatively low numbers compared with the rest of the world, the economy is suffering greatly in the continent at the same time when African leaders are engaging in massive borrowing from multilateral lenders.

The lockdown and shutdown measures taken by African leaders to mitigate the impact of the respiratory disease caused by the novel coronavirus kept hundreds of millions of Africans confined to their homes. Stores were shut, airports and seaports were closed, tourism and all other business activities came to an abrupt halt. As a result, the economy crashed.

With the collapse of revenues and mounting economic crisis, African nations have turned to multilateral lenders such as the African Development Bank, the World Bank and International Monetary Fund for loans.

So far, the IMF has loans more than $15 billion to around 30 countries in Africa and the World Bank announced again on Wednesday that it would be lending $50 billion to 48 countries in Africa to mitigate the impact of the coronavirus. The African Development Bank has also dished out billions of dollars in loans to countries in the region to respond to the global threat.

But these loans can become very expensive, and the IMF has advised countries receiving billions of dollars at low interest rate to spend the COVID-19 money but keep the receipts.

In the Africa economic outlook for 2020 released on Monday, the IMF forecast economic turmoil for the continent, saying growth would shrink by 3.2 percent for the region with some economies such as South Africa seeing a contraction of 8 percent and Nigeria growing in the negative by 5.4 percent.

Asked whether the African Union was engaged international partners and multilateral lenders on more debt relief for the continent, Dr. Amani Abou-Zeid, Commissioner for Infrastructure and Energy at the African Union Commission (AUC), said there have been engagement from the African Union Commission led by Moussa Faki Mahamat, the Chairperson of the African Union Commission, and the African Union presidency led by South African leader Cyril Ramaphosa for more financial assistance to the continent to respond to COVID-19.

In April, President Ramaphosa appointed Dr Ngozi Okonjo-IwealaDr Donald KaberukaMr Tidjane Thiam and Mr Trevor Manuel as Special Envoys of the African Union on COVID-19 economic turbulence.

Their job is to “mobilize international support for Africa’s efforts to address the economic challenges African countries will face as a result of the COVID-19 pandemic,” the AU said in a statement received by TODAY NEWS AFRICA in Washington D.C. on Sunday.

The statement added that the Special Envoys will be “tasked with soliciting rapid and concrete support as pledged by the G20, the European Union and other international financial institutions.”

“In the light of the devastating socio-economic and political impact of the pandemic on African countries these institutions need to support African economies that are facing serious economic challenges with a comprehensive stimulus package for Africa, including deferred debt and interest payments,” said President Ramaphosa.

“The impact of the coronavirus pandemic has been global in both scale and reach, and this necessitates coordinated international action to capacitate all countries to respond effectively, but most particularly developing countries that continue to shoulder a historical burden of poverty, inequality and underdevelopment,” President Ramaphosa said on April 12.

But even with their best efforts, Africa needs $110 billion to respond to COVID-19 crisis but $44 billion of that financing needs is yet to be financed, the IMF said on Monday.

“More international support is needed urgently. This year alone, countries in the region face will additional financing needs of over $110 billion, and despite the efforts outlined above, $44 billion of this has yet to be financed,” said Abebe Aemro Selassie, Director of the IMF’s African Department.

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Simon Ateba
Simon Ateba
Based in Washington, District of Columbia, United States of America, Simon leads a brilliant team of reporters, freelance journalists, analysts, researchers and contributors from around the world to run TODAY NEWS AFRICA as editor-in-chief. Simon Ateba's journalistic experience spans over 10 years and covers many beats, including business and investment, information technology, politics, diplomacy, human rights, science reporting and much more. Write him: simonateba@todaynewsafrica.com

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