Sub-Saharan Africa has not been as badly hit by the coronavirus pandemic as some other parts of the world, but the economy is being pummelled.
For the first time in 25 years sub-Saharan Africa is about to go into recession, according to World Bank estimates.
Add to that the slump in the key markets of raw materials and tourism as well as the effect of measures to confine populations at home and you have the perfect economic storm for the continent. These cash transfers are expected to fall significantly with more than half the world’s population in some kind of lockdown.Sub-Saharan Africa’s two biggest economies, South Africa and Nigeria are heading for deep recessions, according to the World Bank, as demand drops from developed nations for raw materials such as oil and precious metals.Oil prices have fallen to between $20 and $30 a barrel, nearing the cost of production in Nigeria.
South Africa, the biggest draw on the continent for holiday-makers, has already been negatively impacted and that is set to continue, warned tourism minister Hlengiwe Nhlabathi. A total of 1.5 million jobs are at stake. The African Airlines Association warns that with 95 percent of flights grounded carriers are in danger of folding without financial aid.In Ethiopia, Africa’s largest coffee producer, exporters are already experiencing a “devastating shock”, according to Gizat Worku, head of the country’s Coffee Exporters Association.Coffee brings in five percent of the country’s GDP and directly employs 25 million people, out of a population of 110 million.
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