COVID-19: AfDB forecast $88.3 billion drop in Africa’s GDP

COVID-19: AfDB forecast $88.3 billion drop in Africa’s GDP

The African Development Bank (AfDB) has projected that the ongoing Coronavirus (COVID-19) pandemic ravaging economies globally could cause Africa’s Gross Domestic Product (GDP) to drop by between $22.1billion and $88.3billion. According to the Bank, before the advent of COVID-19, West Africa was home to at least four of the continent’s fastest-growing economies, but has strongly

The African Development Bank (AfDB) has projected that the ongoing Coronavirus (COVID-19) pandemic ravaging economies globally could cause Africa’s Gross Domestic Product (GDP) to drop by between $22.1billion and $88.3billion.

According to the Bank, before the advent of COVID-19, West Africa was home to at least four of the continent’s fastest-growing economies, but has strongly felt the impact of the disease, as borders remain closed, and economic and social distress deepened.

The Bank said as of June 12, its COVID-19 emergency packages had reached the continent’s five geographic regions, noting that African countries, with the experience of Ebola control, are working to adapt to the new threat and looking to the Bank for an effective, multilateral response to the crisis.

Going by the data obtained from AfDB by The Guardian, the Bank has deployed over €1.3 billion and $49.7 million to 11 countries in the continent, plus the Economic Community of West African States (ECOWAS).

According to the data, €481.5 million and $22 million have been deployed so far by the Bank, to the West African region, to enable the governments to provide shortfall cash to the millions of people who have been affected by mass layoffs or are unable to work because of lockdowns.

About €288.5 million was deployed to Nigeria, €88 million to Senegal, €75 million to Côte d’Ivoire, €30 million to Cabo Verde, while $22 million was given to the ECOWAS community.

However, Gambia, Mali, and Niger, would benefit from the ECOWAS support package to strengthen their national health systems, while a large chunk of the funds would be channelled to addressing shortages in personal protective equipment (PPE), ventilators, and other emergency equipment.

Also, €624 million and $500,000 was deployed to North Africa, being the worst region to be hit by the pandemic with over 60,000 cases as at June 12, triggering a sharp drop in household incomes as export and tourism earnings suffer.

From the data, €264 million was deployed to Morocco, €180 million to Tunisia, and $500,000 to Egypt, to support national and regional coordination mechanisms.

East Africa, the continent’s fastest-growing region economically, was simultaneously struck by the coronavirus outbreak and an infestation of desert locusts, a double whammy for the region’s farmers and economies.

In a region of climate change and water scarcity, post-harvest losses, and poorly developed agricultural markets, the promise of economic reforms and investment is being greatly threatened.

In the region, €188 million was deployed to Kenya, being one of the top performing countries amongst Ethiopia, and Rwanda, which have all seen a sharp fall in tourism revenue.

In the Southern Africa region, assistance from AfDB came in the form of preventive and protection measures, as well as financial assistance to the vulnerable beyond the end of the epidemic. €188 million was deployed to Mauritius, and $13.7 million to Zimbabwe.

In Central Africa where Cameroon reported over 8,000 cases and significant community transmission as at June 12, $13.5 million was approved for the provision of PPEs, testing kits, and healthcare facilities for Chad, the Democratic Republic of Congo, and the Central African Republic, which is among the countries with the least number of ventilators on the continent.

Meanwhile, the Bank’s rollout of emergency response support to assist African countries began in March, and has provided a package of financial relief and preparedness and response assistance.

The Bank has also raised $3 billion from the Fight COVID-19 Social Bond, the largest dollar-denominated social bond ever launched in international capital markets.

According to the Bank, proceeds from the bond, with a three-year maturity, will help alleviate the impact of the pandemic on livelihoods and Africa’s economies.

The Bank has also announced a COVID-19 Response Facility that will provide up to $10 billion to African governments and the private sector to tackle the disease, and mitigate the sufferings that result from the economic downturn and job losses.

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