African countries which are dependent on tourism and oil exporters are expected to be the hardest hit by the COVID-19 pandemic, according to an official at the African Development Bank (AfDB).
The AfDB’s Director of Macroeconomic Policy, Forecasting and Research Hanan Morsy spoke to London-based Arise News following the release of a report by the AfDB titled African Economic Outlook (AEO) 2020 Supplement which sought to analyse the effects of the pandemic on economies in Africa.
Morsy said that the effects of the pandemic will result in a recession overall in the continent but its magnitude will depend on the dynamism of the pandemic.
“Tourist-dependent economies, we expect that they will suffer from a contraction between seven percent and 10 percent in 2020 and for oil exporters we expect the contractions, on average, to be between two percent and four percent,” Morsy said.
Oil exporters such as Nigeria, Angola and Libya have seen their economies come under pressure in recent months after oil prices dropped sharply following a dispute between Russia and Saudi Arabia over a deeper production cut and effects brought about by the COVID-19 pandemic.
Meanwhile, countries with vibrant tourism sectors such as Egypt, South Africa, Kenya and Morocco have seen significant negative effects result in a decline in foreign exchange and massive job losses.
Morsy said that the AfDB expected there to be a partial recovery from the effects of the pandemic whereby some economic sectors will take longer to recover than others. Tourism, transport, and entertainment were the sectors that she said were expected to take time to recover.
Morsy said that Africa was generally expected to record a baseline economic recovery of three percent while the worst case scenario would see the economy recover by 2.4 percent. She, however, pointed out that there were several factors that made it difficult to be certain of the kind of recovery the continent will have.
“It is very important to keep in mind that we have a large degree of uncertainty and degree of risks to the outlook: potential second outbreak of COVID-19, potentially continued restricted measures, resistance to low commodity prices and continued capital flight to safety.”
“Growth will be coming from basically going back to normalizing activities and going back to easing of movement restrictions, of lockdowns, restarting of all these businesses; and we expect that the recovery will not be even across sectors.”