Fitch Predicts Economic Consequences to 7 African Economies Due to Coronavirus Outbreak
Ghana, Angola, Congo, Equatorial Guinea, Zambia, South Africa, Gabon and Nigeria are sub-Saharan African countries that would be impacted heavily by the Coronavirus outbreak. According to ratings agency, Fitch, the Coronavirus outbreak will have a downside risk for sub-Saharan African growth, particularly in the aforementioned countries. “We at Fitch Solutions see downside risks to the short-term growth outlook in a number of sub-Saharan Africa (SSA) markets due to the outbreak of novel coronavirus (Covid-19) in China.” As of February 12, nearly 45,000 people have been infected, and more than 1,100 killed by the virus — first reported in Wuhan on December 31 2019 —and on January 30, 2020. “The spread of the virus has disrupted economic activity in China, with, at least, 88 cities—including economically important cities such as Beijing, Shanghai, Shenzhen and Guangzhou—put on complete or partial lockdown in a bid to contain Covid-19. As a result, we have revised down our forecast of Chinese real GDP growth in 2020 to 5.6%, from 5.9% previously, with this projection subject to downside risks”. This, Fitch believes, will affect sub-Saharan African countries that China imports commodities heavily from. In 2018, Ghana exported about 12% of its commodities to the Chinese market. This made it the fifth country in sub-Saharan Africa to do so. Angola, Congo, Equatorial Guinea, Zambia are the first four. In addition, a wide range of regional markets are exposed to any sustained downturn in Chinese investment, with South Africa, the Democratic Republic of the Congo, Zambia, Nigeria and Angola the top-five SSA markets in terms of Chinese FDI stock as at end-2017 (most recent comprehensive data available), Fitch emphasised. Moreover, many economies in the region are already experiencing below-trend growth and face multiple constraints to any increase in monetary or fiscal stimulus measures.