The Economic Commission for Africa (ECA) has warned that Nigeria could lose between US $14bn and US $19bn in crude oil exports this year due to the economic impacts of COVID-19. Speaking at a Press Conference in Addis Ababa, ECA Executive Secretary, Vera Songwe, said having already strongly hit Africa’s major trading partner, China, COVID-19 was inevitably impacting Africa’s trade. “Although a few COVID-19 cases have been reported in some 15 countries so far, the crisis is set to deal African economies a severe blow,” she said.
“Africa may lose half of its GDP with growth falling from 3.2% to about 2% due to a number of reasons which include the disruption of global supply chains,” said Ms, Songwe, adding the Continent’s interconnectedness to affected economies of the European Union, China and the United States was causing ripple effects.
The ECA estimates COVID-19 could lead to Africa’s export revenues from fuels falling at around US $101bn in 2020.In addition, a decline in commodity prices could lead to fiscal pressures for Africa’s economic power houses such as South Africa, Nigeria, Algeria, Egypt and Angola.
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Taking advantage of AfCFTA
However, Stephen Karingi, Director of the ECA’s Regional Integration and Trade Division, said the continent has an opportunity to take advantage of the African Continental Free Trade Area (AfCFTA) which is set to commence this July.
The ECA, in a presentation on the economic effects of the COVID-19 on Africa, suggests that African governments could review and revise their budgets to re-prioritize spending towards mitigating expected negative impacts from COVID-19 on their economies.
The COVID-19 virus has now claimed over 5,000 lives globally and infected 139,637 people.
