Every Month In Lockdown Costs Africa US$65.7bn—report

Economic Commission for Africa (ECA) estimated

By Benson Afful

The Economic Commission for Africa (ECA) estimated that a month of lockdown across Africa would cost the continent approximately 2.5 percent of its annual Gross Domestic Product (GDP), equivalent to about US$65.7bn per month.

Adding to the lower commodity prices and investment flows, in the commission report titled COVID-19: Lockdown Exit Strategies for Africa, issued May 7. Businesses surveyed by ECA on average operating at 43 percent capacity, between April 14-20, while large firms report operating at a slightly better capacity. The report cited the manufacturing, health, entertainment, utilities, transport, and trade sub-sectors to be operating at the lowest capacities.

Localized or national lockdowns were in place in at least 42 African countries as of 30 April. Thirty-eight of these lockdowns had already been in place for at least 21 days, it found.

Estimated fatality for COVID-19 varies widely due to differences in testing, reporting, and attribution across countries. As more data is collected, African countries can better ascertain the severity of population vulnerabilities, like tuberculosis or malnutrition, on COVID-19 mortality, the report added.

Some of the challenges faced by companies on the continent included a lack of operational cash flow as well as the reduction of opportunities to meet new customers.

Vera Songwe, Executive Secretary; ECA, at the UK-Africa Investment Summit 2020

Companies also stated that their businesses were closed, in addition to a decline in workers’ productivity from working at home.

During an online debate to launch the report, ECA’s Executive Secretary, Vera Songwe, said governments confronted with the challenge of appropriate exit strategies to COVID-19 lockdown measures.

She said any exit strategy needs to balance the preservation of lives while alleviating economic challenges and continuing to suppress the spread of the virus.

The government of Ghana, for instance, lifted a 21-day lockdown on April 20 and has subsidized electricity and water consumption for households and businesses for April to June at a cost of GH₵1.3bn. Also, it has made available GH₵600m to provide soft loans to small and medium-sized businesses.

The funds expected to fund 200,000 enterprises as part of the Coronavirus Alleviation Program (CAP).