New projections show the likely economic, health and social costs to the continent of the pandemic.
Updated forecasts on the potential impact of COVID-19 on Africa released on Thursday 23 July, 2020.
Compared to pre-COVID-19 projections, Africa’s economy will be between US$349 billion and US$643 billion smaller in 2030. ‘COVID-19 is set to undo several years of development progress in Africa,’ says lead author Jakkie Cilliers.
He warns that instability will increase as government revenues decline in tandem with other effects such as the accelerated impact of climate change in regions like the Sahel.
The report by the Institute for Security Studies (ISS), Gordon Institute of Business Science (GIBS) and Frederick S Pardee Center for International Futures finds that, in a best-case scenario, GDP per capita will recover to 2019 levels in 2024. In the worst case, Africa will only return to 2019 levels in 2030.
As such, beyond being a health pandemic, COVID-19 is set to create a generational set-back for development in Africa. The analysis shows that COVID-19 will further constrain the continent’s progress towards attaining the 2030 Sustainable Development Goals.
Efforts to provide additional social grants in several African countries to mitigate the pandemic’s impact will only marginally reduce extreme poverty and income inequality in the short term.
Relative to the pre-COVID-19 forecast, 14 million additional Africans will be extremely poor in 2020. In 2030, 38 to 70 million more people would be classified as extremely poor. This translates to poverty rates of 35% to 37% of Africa’s total population. Instead of a pre-COVID-19 tally of 570 million extremely poor Africans by 2030, that number could increase to 640 million.
The pandemic is expected to significantly reduce government revenue and health expenditure, pushing many countries towards a debt crisis. In the worst case, more people will have died from the impact of reduced health expenditure and hunger by 2030 than from COVID-19.
The report calls for a concerted international effort to assist the continent. African leaders need to speed up implementation of measures such as the African Continental Trade Agreement that could unlock more rapid development. The success of Africa’s recovery also depends on addressing longstanding deficits in water and sanitation infrastructure and improving the underlying structural drivers of economic growth, such as education, governance and public-private partnerships.