By Oluwayinka Odufote
Your commercial awareness dose
Who would have thought the world war III would be humans against a virus? Who would have imagined that to save our lives, we had to avoid the hospitals? The COVID-19 pandemic has affected the global economy drastically. On the 11th of March 2020, the WHO declared COVID-19 a pandemic. This pandemic came as a ripple of shock by destabilizing the global economy, including Africa. This pandemic affected the significant sectors of the African economy, particularly the healthcare, food, and oil sector. This article explores the effect of COVID-19 on the African economy.
It is for the fact that Africa is the largest net importer of food in the world. The recent devaluation of African currencies accompanied by the pandemic led to a hike in the prices of food. Even before the pandemic, Africa already faced food insecurity. For example, the crops in the horn of Africa suffered from locust swarms while a large part of the farmlands in West Africa struggled with climate change and drought.
The aftermaths of these changes accompanied by the COVID-19 displaced most farmers out of their jobs. However, only a few African countries like Zimbabwe, Ethiopia, and South Sudan experienced a spike in food prices due to panic buying. Still, the scarcity and lockdown also contributed to the hike in the cost of food.
In light of this, due to the lockdown in the African economy, the economy experienced a drastic decline in the demand for oil and this, had been estimated to surpass the loss of nearly one million barrels per day. As the virus spread, the oil market in Africa continued to suffer loss. Using Nigeria as a case study, oil being Nigeria’s most significant export, took a toll on the economy as the price of oil increased and doubled per barrel. Nigeria’s total export of oil and gas, which was estimated to make up around 76.1% of the country’s revenue, fell drastically to around 34%. Hence, this led to a contrast of the African economy.
Undoubtedly, there appeared to be a deceleration in the growth of jobs as the pandemic placed over ten million African jobs at risk. It also changed the job market overnight. On the side of supply, factories and companies proceeded to cut down production, and this single action led to the price inflation of goods and services. The biggest winner despite all this was the Tech companies in Africa. Indeed, they did not rely on brick-and-mortar locations to work. Many Africans could not vouch for the security of their jobs during the pandemic.
Furthermore, the COVID pandemic forced the African educational sector to a halt. While many countries in the world resorted to e-learning, African countries experienced incredible inaccessibility to digital tools. By this, I mean, the educational sectors in Africa lacked online facilities such as stable electricity, laptops, and WI-FI connections. The education sector in Africa has been poorly funded, little wonder the schools in Africa could not carry out online learning classes for its students.
Surprisingly according to the WHO, Africa had the lowest mortality rate during the COVID-19 pandemic despite its inadequate health care facilities, and it is the second-most populous continent in the world. Some people have attributed this reason to the lack of testing in Africa, and others have ascribed it to their genes.
However, Africa equipped its health system by carrying out daily tests, providing PPE for its workers and drugs for the infected patients of the virus. Before the pandemic hit Africa, many expressed their fears on the ability of the African healthcare sector not to handle the pandemic but currently, it is evident that Africa managed to curb the spread of the virus. As an illustration, Seychelles last reported case of the virus was in April.
In a nutshell, the COVID-19 pandemic had many negative impacts on the economy. Even with the curve flattening, Africa is still grappling with the effects of COVID-19 on its economy.
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