BUSINESS MAVERICK
The IMF and six charts on Covid-19’s unfolding impact on Africa
As the world’s poorest continent, Africa is extremely vulnerable on a range of fronts to the Covid-19 pandemic. The International Monetary Fund has produced six charts that illustrate this in chilling detail.
The latest in the IMF “chart series” is sobering for sub-Saharan Africa.
“Covid-19 threatens to unleash an unprecedented health crisis in sub-Saharan Africa… The rapid spread of the virus, if left unchecked, threatens to overwhelm weak healthcare systems and exact a large humanitarian toll,” the Fund notes on its website.
It also notes the economic crisis for vulnerable communities and households.
“The health shock is precipitating an economic crisis and upending the livelihoods of already vulnerable groups. Containment and mitigation measures needed to slow the spread of the virus will severely impact economic activity. Furthermore, a lockdown can have devastating effects — for example, on food insecurity — on households who live hand to mouth and have limited access to social safety nets,” it says.
Measures taken to slow coronavirus in sub-Saharan Africa
The travel restrictions needed to contain the spread of the virus will disrupt economic activity and imperil livelihoods.
Sub-Saharan Africa has also seen capital outflows of $4.2-billion since the end of February — a record. Capital flight has long been one of the many obstacles to African development, and it looks like the continent is bleeding capital — the lifeblood of any economy — at the moment. That, in turn, will pressure currencies and hamper the region’s ability to finance foreign debt obligations or import crucial goods and services.
Africa’s trading partners are also seeing slower growth, denting demand for the continent’s exports, which are still mostly generated from the resource sector.
And no country will be spared.
“GDP in sub-Saharan Africa is projected to contract by –1.6% this year — the worst reading on record. While the effect across countries is expected to differ depending on factors such as extent of diversification and dependence on tourism, no country will be spared. Compared to projections made six months ago, growth for 2020 has been revised down for all countries in the region,” the IMF said.
It further warns that rising debt and interest payments will leave less funds available for social and development spending.
Finally, it ends with a bit of typical IMF jargon:
“A comprehensive and co-ordinated effort by all development partners is essential to respond effectively to this crisis.”
The graphs and the data speak for themselves. Africa is in for a profound crisis. BM