Monthly COVID-19 Lockdown Costing Africa US$65.7bn
The Economic Commission for Africa (ECA) has estimated that a full one-month lockdown across Africa would cost the continent about 2.5 percent of its annual Gross Domestic Product (GDP), equivalent to about US$65.7bn per month.
This is “in addition to the wider external shock of lower commodity prices and investment flows,” the commission said in its report titled “COVID-19: Lockdown Exit Strategies for Africa”, which was issued on May 7.
According to the report, businesses surveyed by ECA on average were operating at only 43 percent capacity between 14 and 20 April, though with larger firms reporting to operate at a slightly better capacity.
The report cited the manufacturing, health, entertainment, utilities, transport and trade sub-sectors to be operating at the lowest capacities.
Localised or national lockdowns were in place in at least 42 African countries as of 30 April. Thirty-eight of these lockdowns had already been in place for at least 21 days, it found.
Estimated case fatality rates for COVID-19 vary widely due to large differences in testing, reporting and attribution across countries. As more data is collected, African countries can better ascertain the severity of population vulnerabilities, like tuberculosis or malnutrition, on COVID-19 mortality, the report added.
The report said some of the challenges complained of by companies on the continent included a lack of operational cash flow as well as the reduction of opportunities to meet new customers.
Some companies also stated that their businesses were closed, in addition to a decline in workers’ productivity from working at home.
During an online debate to launch the report, the ECA’s Executive Secretary, Vera Songwe, said governments across the world are now confronted with the major challenge of putting in place appropriate exit strategies to come out of COVID-19 lockdown measures.
She said any exit strategy will need to balance the preservation of lives while alleviating economic challenges and continuing to suppress the spread of the virus.
In Ghana, for instance, the government lifted a 21-day lockdown on April 20 and has subsidised electricity and water consumption by households and businesses for the months of April to June, at a cost of GH¢1.3bn. In addition, it has made available GH¢600m to provide soft loans to small and medium-sized businesses.
The funds are expected to support over 200,000 enterprises as part of the Coronavirus Alleviation Programme (CAP).