Assessing the Impact of COVID-19 on Africa’s Economic Development

2 0 2 0 Assessing Impact COVID-19 Africa’ Economic Development Key words: COVID-19, Africa, LDCs UNCTAD/ALDC/MISC/2020/3 Grace Gondwe Associate Economic Affairs Officer Division Africa, Developed Countries Special Prorammes, UNCTAD grace.gondwe@unctad.org Abstract started single COVID-19 case late 2019 China, sporadically spread world quarter 2020 presenting global health crises high socio-economic costs. impact world’ health systems including fatalities continue rise, economic toll unclear world faces unprecedented global recession. paper estimates COVID-19 drag African economies fall 1.4% GDP, smaller economies facing contraction 7.8%. contraction result export adjustments affecting primary commodity exporters, attendant losses tax revenue reduce capacity government extend public services respond crisis. , paper estimates regional average 5% public revenue losses Africa, total merchandise exports contracting 17%. coordination health specific responses revamping expenditure health systems African governments remains key thwarting spread virus region. augmented debt moratoriums increased inflows foreign assistance ensure availability resources fight COVID-19, LDCs. Lastly, future, implementation African Continental Free Trade Area (AfCFTA) play crucial role diversifying African economies helping shield global commodity price volatilities continued dictate direction continents trade economic progress. 2 Contents Abstract ....................................................................................................................... 1 Acknowledgements .................................................................................................... 2 1. Introduction .......................................................................................................... 3 2. COVID-19 Statistics measures spread. ....... 4 3. Policy responses easing impact COVID-19 African countries .... 7 4. Methodology ........................................................................................................ 9 5. Impacts COVID-19 ......................................................................................... 11 6. Conclusion ......................................................................................................... 16 References ................................................................................................................ 18 Appendices ............................................................................................................... 20 Acknowledgements author colleagues UNCTAD Africa Section Office Director Division Africa LDCs helpful comments suggestions paper. 3 Introduction 2019 coronavirus disease (COVID-19) reported China infectious upper respiratory disease. virus spread worldwide presenting global health crises history, high socio-economic costs. health impacts contagion, economic impacts largely consequence preventive measures adopted respective governments curtail spread. Key measures adopted countries curtail spread include closing frontiers partial complete lockdowns economies , temporary closure businesses, schools social services. , measures generated significant setbacks African economies terms lost productivity trade countries. Specifically, measures significantly strained key growth enhancing sectors economies, ultimately, income. , institutions put estimates anticipated economic losses follow introduction measures. , International Air Transport Association (IATA) projected revenue losses US$113 billion1 United Nations Economic Commission Africa (UNECA) estimated US$65 billion revenue losses Africa’ top 10 fuel exporting economies2. , due COVID-19 disruptions global chains , World Trade Organization (WTO) projected decline world trade 13% 32% 20203. , unprecedented global recession envisaged world GDP slump ranging 0.5% 3.8 %.4 regional country specific impacts similar Europe Asia depending sectors severely hit, due continents lack economic resilience diversification, Africa faces greater risks negative impacts COVID-19 reasons. , region register COVID-19 cases, Africa experiencing consequences trade links European union (EU), United States America (USA) China, resulting dwindling markets African exports. , infection rates regions started flatten economic stimulus investment recovery plans underway, holds Africa. number cases Africa reach inflection point including China Europe, reported cases tapering . rest world slowly reopening businesses emerge global slowdown, trend African economies entails possibility deeper recession face production trade related constraints rate infection continues rise. paper’ macroeconometric model assessing effects COVID-19 African economies generates conservative estimates based global scenarios. , estimates final projections focus global shocks affect trade Africa rest world. direct impacts COVID-19 Africa’ productivity government expenditure held constant. , analysis domestic multilateral measures put place ease impact COVID-19 respective African countries. 1 IATA: https://airlines.iata.org/news/potential--revenue-losses--113bn-due--COVID-19-%E2%80%9Ccrisis%E2%80%9D 2 ECA (March 2013) 3 https://www.wto.org/english/news_e/pres20_e/pr855_e.htm 4 IMF, 2020; OECD (2020:2); WB, 2020 https://www.wto.org/english/news_e/pres20_e/pr855_e.htm 4 1. COVID-19 Statistics measures spread Daily statistics European Center Disease Control (ECDC) show Africa remains region number COVID-19 infection cases deaths. 15 2020, total 4,308,809 cases including 298,680 deaths reported worldwide. Figure 1 shows Europe highest number infections deaths 2 persons thousand population infection. USA person thousand population virus. Source: ECDC COVID-19 Data UNCTAD STATS. Note: scales embedded charts . , number fatalities due virus thousand population small continents. , interpreting Figure 1 millions shows 2,164 persons infected million, Europe losing 202 persons virus. America, figure shows 1,864 infected persons million, region losing 112 persons. Figure 1 shows Africa number infections (55 persons million population) 2 persons million population lost virus. 0 0.5 1 1.5 2 2.5 Africa America Asia Europe Ocenia Cases 1000 population 0 0.05 0.1 0.15 0.2 0.25 Africa America Asia Europe Ocenia Deaths 1000 population Figure 1: World Distribution COVID-19 cases deaths 15 2020 5 Source: ECDC COVID-19 Data. Note: UK, Spain, Italy Belgium top countries Europe greatest number cases 1000 population (Appendix 1). China Europe infection rates significantly flattened , infection rates Africa continue steadily rise (Figures 2 3 ()). trends imply Africa grappling spread virus China countries Europe rolling recovery plans ease lockdown arrangements. , countries region negligible number infections exception South Africa (12739), Egypt (10829), Morocco (6609), Algeria (6442), Ghana (5530) Cameroon (2954) (Figure 3 ()). figures imply countries region, main channel COVID-19 economic impacts trade linkages key trading partners EU, US China. stay--home (complete lockdown) frontier closure policies adopted highly affected regions including EU, US China, entailed productivity disruptions key chains. Ultimately, lockdowns resulted reduced demand African exports greatest impact countries substantial participation global chains. , infection containment measures regions resulted significant reductions Africa’ foreign direct investment (FDI) inflows, tourism extent, overseas development assistance (ODA) inflows. Initially, infection rates, direct impact health systems related expenditure countries region modest, health crisis continues, changing rapidly. , initially countries region 0 2000 4000 6000 8000 10000 12000 14000 16000 31 - ec 07 -Ja 14 -Ja 21 -Ja 28 -Ja 04 - eb 11 - eb 18 - eb 25 - eb 03 - ar 10 - ar 17 - ar 24 - ar 31 - ar 07 - pr 14 - pr 21 - pr 28 - pr 05 - ay 12 - ay China UK Spain Italy Belgium Africa Figure 2: COVID-19 cases day Africa, China selected countries Europe 15 2020 6 intensified routine hygiene adjustments, semi-frontier closures complete lockdowns respective economies. Source: ECDC COVID-19 Data UNCTAD Stats. noted opting intensify stay--home (complete lockdown) policies reflect continents infection rates extent, reflects huge social economic impact lockdowns African countries. Notably, government social welfare systems African countries weak effectively support COVID-19 lockdowns. significant weight informal sector5 African economies, daily wage earners complete shutdown essentially means income, basic household necessities including food. Similar impacts felt small informal businesses sustain livelihoods poor. highlighted , complicates possibility complete lockdown face weak ( -existent) public social welfare assistance systems. , approach increased risk spreading virus countries. Cross country transmissions significantly reduced frontier closure policies adopted African countries. , approach dampens tourism, FDI importantly Africa’ inter-regional trade largely driven cross border trade international mobility. , approach undermines livelihoods -income earners largely benefit cross-border trade respective economic communities (RECs) Africa. , net impact COVID-19 largely depend effective current containment measures region remain effective spread 5 International Labour Organization estimates 66% total employment -Saharan African informal sector. https://www.ilo.org/global/--ilo/newsroom/news/WCMS_627189/lang--en/index.htm 0 0.01 0.02 0.03 0.04 0.05 0.06 20 - pr 22 - pr 24 - pr 26 - pr 28 - pr 30 - pr 02 - ay 04 - ay 06 - ay 08 - ay 10 - ay 12 - ay 14 - ay : Cases Deaths Africa Cases Deaths 0 0.05 0.1 0.15 0.2 0.25 20-Apr 27-Apr 04- 11- : African Countries cases Algeria Cameroon Egypt Ghana South_Africa Morocco Figure 3: COVID-19 Trends 1000 population Africa 15 2020 https://www.ilo.org/global/--ilo/newsroom/news/WCMS_627189/lang--en/index.htm 7 countries. Notably, increasing trend widespread region, pressure health systems spending depending fiscal policy space, potential increase region’ debt burden. shown section, significant slowdown expected trade, tourism service sectors, investment government spending. Depending sectors trade components affected general slowdown world economic activities, disproportionate impacts key macro-economic variables observed countries Africa. 2. Policy responses ease impact COVID-19 Africa threat potential recession Africa vivid international trade links, countries capacity implement stimulus packages cushion economies form impending COVID-19 global recession. Efforts regard recorded literature ( Ozili Arun, 2020) press Africa’ big economies importantly, cover countries badly hit infections. adopted measures include cutting interest rates provision liquidity assistance cushion households firms. countries fiscal policy space, increased social protection expenditure effectively cushion poorest households lockdowns. , South Africa set US$ 160 million cushion vulnerable businesses, US$ 8.4 billion unemployment insurance fund, tax subsidies 75,000 small medium enterprises turnover US$2.7 million, relevant fiscal monetary policies6 Senegal established Euro 2.1 million response solidarity fund “Force COVID-19” Euro 97.6 million contingency plan cushion impacts COVID-19.7 , Egypt, Tunisia Morocco set inject US$6.4 billion, US$0.9 billion US$ 1 billion economies part economic stimulus packages enhancing liquidity COVID-19.8 addition stimulus packages, Table 1 summarizes specific key monetary fiscal stimulus packages adopted African countries ease impact COVID-19 economies. 6 https://www.globalpolicywatch./2020/04/south-africas-economic-response---COVID-19-pandemic/ 7 https://home.kpmg/xx/en/home/insights/2020/04/senegal-government--institution-measures--response--covid.html 8 https://aaco.org/media-center/news/aeropolitical/-arab-governments-announce-stimulus-packages--ease--economic-impact- --covid19-outbreak https://www.globalpolicywatch./2020/04/south-africas-economic-response---covid-19-pandemic/ https://home.kpmg/xx/en/home/insights/2020/04/senegal-government--institution-measures--response--covid.html https://aaco.org/media-center/news/aeropolitical/-arab-governments-announce-stimulus-packages--ease--economic-impact---covid19-outbreak https://aaco.org/media-center/news/aeropolitical/-arab-governments-announce-stimulus-packages--ease--economic-impact---covid19-outbreak 8 Countries Interest rate Fiscal Policy Jan 1 Current Rate 2nd quarter Increase government spending (%GDP) Fiscal Support loans loan guarantees (% GDP) Egypt 12.25 9.25 9.25 0.80 0.80 Ghana 16.00 14.50 14.50 Kenya 8.50 7.20 Nigeria 13.50 13.50 2.30 7.50 South Africa 6.50 5.25 4.75 Source: Adopted Ozili Arun (2020). addition fiscal monetary policies, multilateral institutions put place stimulus packages easily accessed African countries. covers loans, emergency response debt relief. Table 2 summarizes measures World Bank, EU, African Development Bank (AfDB) IMF. Institution Policy Response World Bank World Bank (2020a) announced availability US$160 billion countries late 2021. package set enhance ability beneficiary economies easing effects COVID-19 small businesses vulnerable populations.9 African Development Bank (AfDB) AfDB US$10 billion COVID-19 response package pipeline US$5.5 billion set sovereign operations AfDB countries US$3.1 billion operations African Development Fund. Bank launched US$3 billion fight COVID-19 social bond allocated central banks official institutions (53%), Bank treasuries (27%) asset managers (20%). Notably, 8% social bond set African countries.10 IMF IMF approved US$2.7 billion COVID-19 related emergency responses African countries European Union (EU) EU announced Euro 3.25 billion COVID-19 toolkit African countries.11 Afreximbank Afreximbank announced US$3 billion Pandemic Trade Impact Mitigation Facility (PATIMFA) enhance capacity African countries dealing COVID-19 related health economic impacts.12 addition, bank set US$200 million finance production COVID-19 equipment supplies Africa. 9 https://www.worldbank.org/en/news/press-release/2020/04/09/COVID-19-coronavirus-drives--saharan-africa---recession- -25-years 10 https://www.afdb.org/en/news--events/press-releases/african-development-bank-launches-record-breaking-3-billion-fight-COVID-19- social-bond-34982 11 https://ec.europa.eu/commission/presscorner/detail/en/ip_20_604 12 https://www.afreximbank./afreximbank-announces-3-billion-facility--cushion-impact--covid-19/ Table 1: Stimulus packages announced African countries ease impact COVID-19 Table 2: COVID-19 multilateral Stimulus packages benefits African Countries https://www.worldbank.org/en/news/press-release/2020/04/09/covid-19-coronavirus-drives--saharan-africa---recession--25-years https://www.worldbank.org/en/news/press-release/2020/04/09/covid-19-coronavirus-drives--saharan-africa---recession--25-years https://www.afdb.org/en/news--events/press-releases/african-development-bank-launches-record-breaking-3-billion-fight-covid-19-social-bond-34982 https://www.afdb.org/en/news--events/press-releases/african-development-bank-launches-record-breaking-3-billion-fight-covid-19-social-bond-34982 https://ec.europa.eu/commission/presscorner/detail/en/ip_20_604 https://www.afreximbank./afreximbank-announces-3-billion-facility--cushion-impact--covid-19/ 9 3. Methodology paper builds simple macroeconometric model Africa forecast simulate COVID-19 impacts African economies relevant policy inference. focus simulating impact plunge fuel prices global recession Africa’ key macro-economic variables including GDP, revenue exports. model comprised twenty behavioral equations identities. dynamic specification, model accounts intertemporal dependency respective dependent variables. , allowing dynamic process introduces endogeneity autocorrelation model additional lagged values dependent variables regressors. regard, consistent estimates Generalized Methods Moments (GMM) estimators13 constitutes widely literature. estimators largely depend levels lagged values endogenous regressors instruments addressing endogeneity autocorrelation model. Implementation GMM estimators Stata xtabond (Allerano Bond difference GMM), xtabond2 (Blundell Bond system GMM) xtdpd command implements dynamic model xtabond xtabond 2. xtabond level equation instrumentation, xtabond2 instruments level differenced equation allowing instruments improving efficiency GMM estimation method (Roodman, 2009). paper opted xtdpd command implements xtabond2 consistent estimates models -order moving-average correlation idiosyncratic errors 14. validity model checked sample estimation. assessment data consumption, consumer price index, expenditure investment World Development Indicators (WDI) database. Data exports, imports, GDP world prices obtained UNCTADSTATS, revenue data obtained UNU-WIDER database. 15 Data variables 2000 2018. 13 estimators developed Anderson Hsiao, 1982; Holtz-Eakin .al., 1988; Allerano Bond, 1991; Allerano Bover, 1995; Blundell Bond, 1998. 14 https://www.stata./manuals13/xtxtdpd.pdf 15 https://databank.worldbank.org/source/world-development-indicators, https://unctadstat.unctad.org/EN/, https://www.wider.unu./data https://www.stata./manuals13/xtxtdpd.pdf https://databank.worldbank.org/source/world-development-indicators https://unctadstat.unctad.org/EN/ https://www.wider.unu./data 10 4. 4.1 Model Specification Behavioral Equations Consumption: ?????? = ??0 + ??1?????? + ??2?????????? + ??3?????????? + ??4?????????? + ??5????,??−1 + ɛ?? Prices: ?????????? = Б0 + Б1?????????? + Б2??2???? + Б3?????? + Б4?????? + Б5????????,??−1 + ???? Expenditure: ?????? = ϒ0 + ϒ1?????? + ϒ2???????????? + ϒ3???????????? + ϒ4???????????? + ϒ5?????????? + ϒ6????,??−1 + ?????? Total Revenue: ?????? = ??0 + ??1?????? + ??2???????? + ??3?????? + ??4?????? + ??5????,??−1 + µ?? Investment: ?????? = ??0 + ??1?????? + ??2?????? + ??3?????????? + ??4?????????? + ??5????,??−1 + ???? Export: ?????? = ??0 + ??1?????? + ??2??????_?????? + ??3??????_?????? + ??4?????????? + ??5????,??−1 + ϐ?? Import : ?????? = ??0 + ??1 � ???????? ?????? �+ ??2?????? + ??3?????????? + ??4????,??−1 + ???? World prices ?????? = ??0 + ??1?????? + ??2?????? + ??3?????????? + ??4??????−1 + ϫ?? Identities ?? = ???????? + ?? + ?? + (?? −??) ???????? = ?? + ?? ?? = ?? − ???????? + ?? household consumption, Domestic income (GDP), EXR exchange rate, Rem remittances, Tax revenue, TT total trade, ODAc () official development assistance trend cyclical, investment, CPI consumer price index, total export , GDP_wt world GDP trend, GDP_wc world GDP cyclical, Xw world exports, Mw world imports, Pw world price, total import , Pd GDP deflator proxy domestic prices, fcon final consumption expenditure government expenditure. equation (vi) total exports replicated fuel, minerals, ores metals (ores, metals, precious stones -monetary gold), food agricultural raw materials. similar disaggregation undertaken world import prices. nature Africa’ exports largely unprocessed motivated disaggregation equations groups, availability annual world price data disaggregated groups, main reason choice commodity specific groups analysis exports imports. Due lack tax data, 10 countries dropped sample 54 African countries: Central African Republic, Chad, Djibouti, Eritrea, Equatorial Guinea, Guinea Bissau, Libya, Sao Tome Principe, Somalia South Sudan. discussed , paper maintains direct impact COVID-19 health system, health expenditure complete lockdowns negligible countries, ceteris paribus. assumption based number infections remained largely concentrated continent’ 54 countries. 11 , infection trends drastically change, impact COVID-19 African countries production trade linkages rest world (ROW). scenario outcomes simulations presented paper treated ultimate projected impacts COVID-19 African countries. 5. Impacts COVID-19: Key results model scenarios mild severe impact COVID-19 aspects African economies envisaged, based global GDP commodity price projections OECD, IMF World Bank shocks COVID-19 African countries. shocks mild impact scenario average estimated values GDP IMF, World Bank OECD - -1.25% decline world GDP, fall fuel prices 30% attendant effect major exports trade costs. severe impact scenario, average estimated COVID-19 related decline world GDP 4% fuel prices expected fall 60%. estimates model presented Figure 4 shows exports Africa fall -10.6%% mild impact scenario largely consequence drop fuel exports food exports. significant decline fuel prices substantial losses government revenue observed mild severe impact scenarios. , stagnation ( change) GDP benchmark mild impact scenario. , Africa’ GDP drop -1.4% impact COVID-19 takes world deep recession. deep recession drop Africa’ total exports -16.7% resultant revenue losses -5.3%. Exports agricultural raw materials huge nock detrimental African economies depending sector Benin Gambia . 12 Note: = exports. , impacts COVID-19 vary African countries sectors. fall global demand exports slump prices major commodities including fuels main concerns Africa. fall Foreign Direct Investment (FDI), closely linked extractive sector commodity price cycle (World Investment Report, 2020). decline crude oil prices 60% put significant strains revenue net oil exporters, revenues highly determined crude oil sales. , results Figure 5 suggest -11.4% decline Nigeria’ revenue 2020 revenue falls key exporters fuels region Algeria (-2.5%), Angola (-3.8%), Gabon (-2.4%) Congo (-2.3%). , final impact depend respective countries advantage respective key markets frontier closures lifted productivity resumed world. , fuel exports estimated fall -7.7%, significant drop GDP -3.3% Congo Mozambique. -20.00 -18.00 -16.00 -14.00 -12.00 -10.00 -8.00 -6.00 -4.00 -2.00 0.00 2.00 Mild Impact Severe impact Figure 4: Aggregate COVID-19 impact GDP, revenue Exports: cent deviations baseline 13 trends oil exporters expected small agrarian economies face export volumes due depressed world demand, productivity slump potentially time return equilibrium 2020. , impact COVID-19 countries disproportionately higher net fuel exporting countries. worst case scenario deep global recession, paper estimates food exports African economies decline -3% (Figure 4) accompanied contractions GDP -7.8% Comoros, 6% Guinea Bissau, -5.6% Seychelles -4.5% Malawi, (Figure 6). food exports important, Small Island Development states (SIDS) Comoros Seychelles key COVID- 19 related shock economies due collapse demand tourism services. , heavy reliance African LDCs trade taxes duties, lead severe COVID-19 related revenue losses countries Burundi (-5.8 %), Comoros (-7.6 %), Gambia (-10 %), Malawi (-10.2 %) Sierra Leone (-7 %), shown Figure 6. -18.00 -16.00 -14.00 -12.00 -10.00 -8.00 -6.00 -4.00 -2.00 0.00 Revenue total exports Figure 5: COVID-19 impacts main African fuel exporters: cent deviations baseline (Severe Impact Scenario) 14 Note: = exports; -Fuels aggregation fuels including crude oil, gas, coal ethanol classified SITC 3. Revenue losses affect ability countries import critical inputs domestic production food exports. , protracted global recession causing demand exports resultant revenue losses significant consequences agriculture sectors economies poverty food insecurity expected rise , 2021 (Akiwumi Valensisi, 2020). food security estimates suggest 73 million people Africa acutely food insecure. alarming situation exacerbated current COVID-19 crisis16 direct impacts trade trade logistics production chains. Administrative restrictions imposed governments lockdowns, travel restrictions physical distancing measures added situation. burden movement restrictions lockdowns felt strongly -income households working informal economy due loss livelihoods inability access markets. , fuel prices favorable net importers fuels, recession LDCs SIDS economies lead reduced fuel imports production sectors remain depressed. , countries Burundi (-26.6%), Cabo Verde (-8.5 %), Comoros (-30%) Malawi (-15%) expected import fuels highlighted amounts year. 16 https://www.afro..int/news/COVID-19--deepen-food-insecurity-malnutrition-africa -60.00 -50.00 -40.00 -30.00 -20.00 -10.00 0.00 10.00 20.00 GDP Revenue Total -food -Fuels -minerals, ores & metals Figure 6: COVID-19 impacts key food exporters: cent deviations baseline (Severe Impact Scenario) https://www.afro..int/news/covid-19--deepen-food-insecurity-malnutrition-africa 15 Note: = exports; -Fuels aggregation fuels including crude oil, gas, coal ethanol classified SITC 3. food exporters net increase food exports year, story observed key exporters minerals, ores metals (minerals). exception Rwanda Sierra Leone exports minerals face significant shock, large increases observed South Africa, Botswana, DRC, Ghana Zambia (Figure 7). trends imply COVID- 19 related lockdowns halted economic activity sector, impact delayed demand harsh prices. , suggests COVID-19 lead major structural shift production output. , complete lockdowns lifted, economies resume production similar pre-COVID-19 levels albeit significant delay reaching optimal levels due revenue losses, lockdowns. regard, Figure 7 shows significant revenue declines mineral sector Sierra Leone (-7%), DRC (-6.2%), Ghana (-4.6%) Mali (-4%). , impact potentially deep global recession sector compared food sector. Figure 7 Rwanda biggest impact -5 % drop GDP Guinea (-3.3%) Namibia Mali (-3.1%) Burkina Faso (-2.9%). sum, potentially deep recession global economy result significant losses Africa fall GDP -1.4%. countries expected suffer recession result decline world GDP fuel prices, impact expected disproportionately higher net food exporters. marginal negative impacts observed sectors, food exporters worst hit terms revenue losses -10.2 % GDP declines -7.8%. Similar trends observed mild impact scenario worst hit countries net food exporters large falls GDP observed Comoros (-6.%), Carbo Verde (-6%), Burundi (-5.1%), Gambia (-5.7%) Liberia (-5%). -20.00 -15.00 -10.00 -5.00 0.00 5.00 10.00 15.00 20.00 25.00 30.00 GDP Revenue Total -food -Fuels -minerals, ores & metals Figure 7: COVID-19 impacts key exporters minerals, ores metals: cent deviations baseline (Severe impact scenario) 16 Coherent consistent policy responses COVID-19 impacts important cushioning African countries, worst-case scenarios. countries put place measures economies afloat. , marginally reducing supply oil, Nigeria put place stimulus packages minimize impact COVID-19 vulnerable segments economy. Similar actions countries including Egypt, Ghana, Kenya Senegal South Africa. net fall GDP, measures, marginal continent’ largest economies, small contraction GDP higher domestic impact larger loss GDP smaller economies. countries greatest number registered COVID-19 cases, significant drop revenue observed Egypt (-10.6%) potentially effect due fall oil prices. , increase public health expenditure due increased number COVID-19 cases expected, COVID-19 related increase government expenditure considered. words, analysis focused global shocks holding direct impacts COVID-19 Africa’ productivity expenditure constant. , analysis include measures put place ease impact COVID-19 respective African countries. , results final projections conservative estimates year. 6. Conclusions COVID-19 cases Africa concentrated 54 countries infection rates compared worst affected countries Europe, Asia Americas. , countries intensify stay--home complete lockdown transmission control measures. , border closures widely adopted control cross-country transmissions. , COVID-19 impacts African countries linkages global economy, trade. , drop world demand resultant commodity price drops, affected production export performance African countries COVID-19 control measures. affected commodity exporters, involved key global -chains fuel horticulture exporters. estimates COVID-19 related falls global GDP fuel prices, paper finds decline -1.4% Africa’ income worst declines observed smaller LDC SIDS economies. extreme scenario severe global recession, paper projects significant decline total exports (-16.7%) average significant differences sectors countries region. , countries suffer worst losses revenue including Nigeria (-11.4%), Egypt (-10.6%), Malawi (-10.2%), Eswatini (-9.3%) Ethiopia (-8.5%). short term, African countries coordinate health specific responses arrest spread virus. emphasized viral infections rise countries capacity prevent worsening crisis. Notably, health systems region overwhelmed perennial issues, escalation COVID-19 cases put extreme pressure public health systems. lag infections means Africa dealing COVID- 19 long rest world controlled disastrous travel trade Africa. impact acting coordinated manner curtail virus higher terms costs related morbidity, lost lives opportunity costs implementing economic lockdowns future. important countries immediately increase expenditure health interventions ensure bring COVID-19 infection curves . 17 countries place economic stimulus plans ease financial burdens caused virus, countries Africa capacity . implies COVID-19 infection rates Africa high ( capita basis) countries Europe, managing virus required coherent regionally coordinated response observed date. urgent international support African countries effectively respond crisis countries capacity put place economic stimulus packages ease burden people businesses. long term, countries supported implementation structural reforms enable build capacity generate sufficient domestic resources fiscal buffers effectively manage pandemics. , COVID-19 emergency calls financial resources immediately, including external sources. international community extend reprieves debt increase external flows impact ability African governments extend deliver effective public health services. COVID-19 affected countries worldwide, important extend existing debt moratoria grants Developing Countries (LDCs) ensure continue access current levels ODA. exceptionally targeted essential public services eradicate threat global COVID-19 recurrence. trade-related impacts COVID-19 highlight longstanding underutilization regional market African countries. Commodity price volatilities continue dictate direction economic progress, diversification exports increased addition build resilience shocks African countries. Potentially, full implementation African Continental Free Trade Area (AfCFTA) provide countries opportunities growth economic diversification, industrialization manufacturing, game changer Africa. addressing fragmentation African economies, longer run AfCFTA boost agricultural output. World Bank (2020b), AfCFTA potential increase intra-African exports agricultural products 49% 2035 (compared 10% growth AfCFTA); lifting 30 68 million people poverty. 17 Finally, African countries -examine respective fiscal economic-policy priorities, enhance health social support systems, countries failed implement critical health related lockdowns due lack social policy safeguards rural urban populations. longer-term, Africa build productive capacities address underlying economic vulnerabilities enhance continental capabilities manage crises. 17 https://www.worldbank.org/en/region/afr/publication/--saharan-africa-coronavirus-crisis-calls--policies--greater- resiliencecid=afr_tt_wbafrica_fr_ext https://www.worldbank.org/en/region/afr/publication/--saharan-africa-coronavirus-crisis-calls--policies--greater-resiliencecid=afr_tt_wbafrica_fr_ext https://www.worldbank.org/en/region/afr/publication/--saharan-africa-coronavirus-crisis-calls--policies--greater-resiliencecid=afr_tt_wbafrica_fr_ext 18 References Abegunde . 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World Bank (2020b) “ Potential Impact COVID-19 GDP Trade: Preliminary Assessment.” Policy Research Working Paper 9211. https://dx.doi.org/10.1016%2Fj.onehlt.2018.100080 https://www.worldbank.org/en/news/press-release/2020/04/09/COVID-19-coronavirus-drives--saharan-africa---recession--25-years https://www.worldbank.org/en/news/press-release/2020/04/09/COVID-19-coronavirus-drives--saharan-africa---recession--25-years https://www.worldbank.org/en/news/press-release/2020/04/09/COVID-19-coronavirus-drives--saharan-africa---recession--25-years 20 Appendices 0 1 2 3 4 5 6 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 Appendix 1: COVID-19 Trends 1000 population 15 2020: Countries cases deaths 21 0 10000 20000 30000 40000 50000 60000 31 - ec 07 -Ja 14 -Ja 21 -Ja 28 -Ja 04 - eb 11 - eb 18 - eb 25 - eb 03 - ar 10 - ar 17 - ar 24 - ar 31 - ar 07 - pr 14 - pr 21 - pr 28 - pr 05 - ay 12 - ay US Appendix 2: COVID-19 cases day USA 15 2020