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How The Coronavirus Destroys The African Economy

The recent COVID-19 outbreak has caused a state of panic and distress worldwide. It is continuing to spread like wildfire, claiming tens of thousands of lives and posing a major threat to the global economy. Nations have been divided in their responses to this deadly virus, with some opting for maximum shutdown, hoping to contain the outbreak effectively, while others remain hesitant to take such vigorous measures for fear of the repercussions on their local economy.

China, for example, where the Coronavirus allegedly originated back in December of 2019, had the highest number of confirmed cases and mortality rates; now, it has supposedly moved into the containment phase after taking a radical approach with strict quarantines and social distancing measures. The Chinese people were ordered to completely self-isolate in their homes for two consecutive months and were only allowed outside to purchase food and medicine. Public transportation was suspended while schools, universities, and stores were shut down indefinitely. As a result, China’s reported number of new infections and Coronavirus deaths has drastically reduced, to the point where Chinese authorities are now urging other nations to adopt the same approach to promptly reach their own containment phases.

Unfortunately, for most underprivileged countries, enforcing this approach is, quite frankly, elusive. Developing countries can’t afford to have their economies put on such an unexpected and abrupt halt, which is also the case in most struggling countries in Africa that cannot afford to follow in the footsteps of the world’s second most powerful economy.

Indeed, the stakes are very high for this over-populated continent that is already stricken by poverty, epidemic diseases, and bleeding resources. If the Coronavirus outbreak is believed to shake the economy of the first-world, one can only imagine the catastrophic impact it will have on Africa’s fragile economy. Let us take a look below at how the Coronavirus destroys the African economy.

African Industries Will Collapse

Although Africa once reveled in an abundance of natural resources, perpetual wars and colonial occupations have left the dark continent depleted and dry. For ages, African nations had been fighting for their lands and resources that were forcefully exploited by foreign invasions, leaving them with few chances of enjoying dignified, much less democratic lives. Despite the fact that the continent has seen notable progress over the last decade in sectors such as banking and telecommunications, poverty continues to overshadow this advancement because of the poor conditions most Africans were—and some still are—living in.

Adding to the equation is the fact that there is a global health crisis that can only be curbed by sending the continental economy onto an indefinite hiatus, which is bound to be a recipe for disaster. With businesses going bankrupt and governments lacking the means to provide adequate financial support or dedicate stimulus packages like their more developed counterparts, what’s left of African industries will not be able to survive. This is especially true for those industries that rely heavily on manual laborers, where the chances of sustaining operations by working-from-home are virtually impossible.

Unemployment Levels Will Soar

Africa has come a long way since the age of slavery and colonization. A number of countries on the continent, including Nigeria and South Africa, have, in fact, achieved remarkable leaps in the business world. The growing number of successful local startups, like the renowned e-commerce website Jumia, is clear proof that there is no shortage of talented entrepreneurial minds.
However, limited education opportunities and difficult living conditions have always stood in the way of the continent’s young and promising calibers. Today, due to the Coronavirus outbreak, advanced economies like the United States are witnessing soaring levels of unemployment, which indicates that the situation will only be worse in less fortunate African countries where unemployment has always been a heavy and permanent burden.

This will strain local governments even further, especially since most countries in Africa do not have full-fledged unemployment packages for the citizens to lean on. The issue with unemployment is that it is often the root cause of violence, illiteracy, and other damaging societal ills.

With a major portion of the youth population struggling to find steady employment and make ends meet, a surge in crime rates will inevitably ensue, causing stifle in Africa’s future growth and development prospects. Instead of focusing on technological and scientific advancement to better the living standards of underprivileged communities, governments will have their hands full fighting the eruption of primal wars and gang violence between citizens.

Foreign Investments Will Dwindle

For years, Africa has been seen as an investors’ hub due to its great potential, which is yet to be unleashed. Countries lacking the proper infrastructure, healthcare, and education systems are gold mines for investors wishing to employ their fortunes in lucrative projects. This has been an essential component in the thriving of the African economy.

In essence, more foreign investments mean that more money is pumped into the local economy, setting the wheels of production into motion. As a result of the Coronavirus pandemic, a growing number of international investors will be reluctant to invest in the unstable African market for the time being. Instead, they would prefer to play it safe in more established market areas until they make up for their own losses.

As foreign investments dwindle across the continent, countries will lose a substantial income source from tax revenue as well as thousands of potential jobs created in the process. In addition, the overall state of stagnation will overtake local markets after investors start disappearing in search of more profitable havens. Even though this will not be exclusive to weaker economies, the impact will resonate extensively and inflict more damage to the African economy as a whole.

Any Surplus Will Be Directed Towards Healthcare

Healthcare is currently the main global focus. As a matter of fact, governments are directing all available funds and investments toward improving their healthcare systems to cater to the urgent needs of those who were affected by the Coronavirus, and eventually, eradicating the threat entirely. Since healthcare in African countries has numerous shortcomings, this means that the continent is not well equipped to mitigate and counter the dangers of the pandemic.

Of course, not all African countries are the same when it comes to advancement in healthcare. However, the situation is, to a great extent, more or less similar across the continent. As such, any economic surplus will be aimed toward fortifying national healthcare systems in an attempt to prepare for a potential rise in infection cases, as it has been the case in other countries like the US, Italy, France, or Spain.

Although investment opportunities in healthcare are certainly not lacking, the problem lies in the sudden diversion from other investment plans that were intended to benefit the regional economy. Unlike stronger economies, less developed ones are less prepared and thus more vulnerable to sudden economic outbursts and crises.

Potential Disruption of Foreign Aid

Despite the varying socioeconomic levels of different African countries, the continent does account for the majority of the world’s poverty. A staggering number of people in Africa live either below or right above the poverty line, which explains the dire need for foreign aid. With countries going under lockdown and borders being closed, there have been serious challenges in reaching the hunger-stricken nations scattered across the continent. In addition, these humanitarian organizations are undoubtedly stretching thin, trying to address the local and global state of emergency.

Still, so far, the international community seems to be pulling its weight and doing its part to ensure continuity and keep providing life-saving aid relief.

Billions of Dollars Will Be Lost Due to Falling Oil Prices

A handful of African countries’ gross national incomes derive from exporting oil. With the sharp drop in oil prices and the economic struggle of their main trade partner, namely China, nations like Angola and Nigeria are bracing themselves for substantial losses. As the supply for crude oil now surpasses the demand, prices will continue on their downward slope. This will also jeopardize the sustenance of oil-dependent industries, creating a domino effect and eventually causing the economy to collapse.

Inflation Rates Will Increase

Since most African countries are not self-sufficient when it comes to basic consumer goods, depending mainly on imports from giants like China, the disruption of supply chain channels has caused serious shortages in African markets. Prices started shooting up, increasing the inflation rate, and curtailing the purchasing power of the average citizen. Some countries, however, did attempt to solve this problem by fixing the prices of essential food items to limit the impact on the general public. Invariably, this solution cannot be sustained forever. Soon enough, African governments will not be able to afford the burdensome cost of price-fixing.

Tourism Will Be Severely Impacted

The Sub-Saharan Desert has always been a coveted destination for world travelers thanks to its stable climate, which has made Africa one of the most touristic destinations around the world. Unfortunately, due to international travel restrictions and countries enforcing lockdowns, thousands of trips have already been canceled, causing tremendous losses to the African economy. The aviation and hospitality industries have suffered the most, with smaller companies being forced to shut down and put thousands of employees out of work. Given the ambiguity of the situation and the fact that nobody can predict how much longer this travel ban will go on for, further damage may continue to unfold one day at a time.

Debts Will Accumulate

Debt shapes a big part of the African economic landscape. The scarcity of financial means has always put the continent in a precarious position where it needed to rely on benefactors to sustain itself. After the recent Coronavirus outbreak, more fragile countries are facing the risk of diminishing food supplies and stocks due to interruptions in planting and harvesting.
The only way to avert a national famine is for governments to seek external help as an ultimate resort. As the pandemic continues to exhaust the resources of African nations, repaying existing debts and sourcing, even more loans will tip the scales against a healthy and thriving economic climate. A heavily indebted economy is not a free one; this can eventually open the door to more serious repercussions that governments may not be able to withstand in the future.

Africa Will Lose More Local Talents

Emigration is not uncommon to African countries; as a matter of fact, it is one of the continents with the highest rate of mobile citizens. Even though the entire world has been affected by the pandemic, younger generations will be encouraged to move to developed countries that they know will be more resilient to the effects of the Coronavirus recession, and who stand a greater chance of making a full comeback. The departure of future talents will impede on Africa’s economic development potential and will most likely cost it its own chance of surviving the recession. That said, if national governments realize this threat soon enough, they can protect their budding talents by involving them in the decision-making process, and finally give them the support they need to excel in their own homelands.

With this approach, and the powerful sense of responsibility young people have towards their native land, the African economy will be better able to anticipate and overcome the foreseeable economic crash.


Over the course of modern history, Africa did manage to survive a number of pandemics that were indigenous to the continent, and with the same inadequate public healthcare systems. It is true that there have been notable improvements. However, compared with the rest of the world, the continent still has some of the poorest and most inefficient health infrastructures. What makes the Coronavirus pandemic different are the damaging effects it inflicts on the global economy.
As such, Africa will suffer a double hit — one owing to its position as an important hub that trades with the rest of the world, and the second pertaining to its status as an impoverished economy. World economists are trying to remain optimistic, confirming that there is still a chance to soften the blow for Africa due to the latency of the outbreak. Whether this delay is the result of low and unavailable testing, or for some other unknown reasons Africa will be spared the woes of the pandemic, is a difficult phenomenon to explain for the time being. Ultimately, it is imperative for African governments to act fast and prepare well for the impending COVID-19 menace.

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