Covid-19 weighs on Africa

The Covid-19 pandemic crisis has worsened the vulnerabilities caused by the excessive reliance of African economies on world markets.

Africa’s main trade partners include the European Union, China, United States and the United Kingdom.

Together they represent more than 50 percent of the continent’s trade flows (see figure 1 and 2 below).

Africa’s dependence on external markets for medicinal and pharmaceutical products is particularly acute — Africa imports more than 95 percent of these products from outside the continent.

As the continent’s main trade partners have been severely hit by the Covid-19 pandemic, Africa has suffered significant business disruptions and output contraction, including in export sectors.

Africa’s GDP could contract by 1,4 percent in 2020 while the continent’s total merchandise exports could decline by 17 percent.

McKinsey estimates that Africa’s manufacturing sector output will shrink by 10 percent in 2020 – equivalent to a loss of more than $50 billion – as result of Covid-19. Deepening regional integration on the continent through the African Continental Free Trade Area (AfCFTA) can build resilient economies post-Covid-19.

The AfCFTA, if quickly and effectively implemented, can address challenges emanating from Africa’s reliance on world markets while creating more value in local economies.

This will in turn help reduce vulnerability to future pandemics. — UNCTAD.