Africa's Economy and Coronavirus: Business as usual?

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Friday, March 13, 2020 / 03:00 PM / United Capital Research / Header Image Credit: Reuters

 

In recent times, talks around the world have shifted away from the trade war/truce between U.S and China to the spreading impact of the viral disease - Coronavirus (COVID-19) that has swept into at least 114 countries and killed more than 4,000 people.

 

Though no fatal case of COVID-19 has been recorded in Africa, the economies are not immune to its attack. Notably, the demand for Africa's raw exports in Asia and Europe (continents most affected by the outbreak and Africa's biggest export destinations) is reported to be dropping drastically, as countries like China and Italy have shutdown productive activities and port operations. Also, African companies that import food, technology or clothing from China - the country of origin of the COVID-19 virus - are already feeling the effects of the crisis. Additionally, African financial markets have not been spared by the impact of the outbreak with African currencies in the firing line.

 

 Overall, we believe fiscal and monetary resources will need to be mobilized in order to combat the impact of the outbreak on African economies. In terms of monetary policy, African monetary authorities are yet to join the virus-induced monetary easing bandwagon. Also, in terms of increased expenditure through fiscal policy, where this funding will come from remains a major conundrum - especially since China's benevolence to Africa is likely to be severely reduced in the current context.

 

Top African Stories

  • Coronavirus: South Africa cases up to 17, Ghana allocates $100m fund : The coronavirus was confirmed in the Chinese city of Wuhan on January 7, 2020. Cases have since been confirmed in over 80 countries across the globe. Read more

  • African Free-Trade Deal on Track Despite Coronavirus :  The coronavirus pandemic is unlikely to scupper a July 1 target for the first commerce under an African-wide free-trade deal, even if meetings to iron out details are being canceled, according to the zone's most senior official. Read more

  • South Africa: Stage 4 Load Shedding Resumes: Eskom has announced that Stage 4 load shedding is expected to continue until Friday, due to a trip at the Koeberg Unit 1 and the associated loss of generating capacity. Read more

  • World Bank, AfDB release Sh1.9bn for fighting locusts: Kenya has an additional Sh1.9 billion from international development financiers to fight locusts as the government classifies the invasion a crisis. Read more

  • COVID-19: Morocco Prepares to Repatriate Citizens from Italy: The Moroccan government is preparing to repatriate its nationals from Italy amid the outbreak of the novel coronavirus (COVID-19). Read more

 

Looking Forward

 

Angola

Feb-2020 Inflation Rate - March 22nd

Feb-2020 Net Reserves - March 22nd

 

 Egypt

 Jan-2020 Trade Balance - March 19th

 Q4-2019 GDP Report - March 31st

 

Ghana 

Policy rate meeting - March 23rd

Feb-2020 Gross Reserves - March 28th

 

Kenya

Jan-2020 Money Supply - March 19th

Jan-2020 Overseas Remittances - March 19th

 

Morocco

Policy rate meeting - March 19th Feb-2020

Inflation Rate - March 20th

 

Nigeria

Feb-2020 Inflation Rate - March  16th

Policy rate meeting - March 24th

 

South Africa

Feb-2020 Inflation Rate - March  18th

Feb-2020 Trade Balance - March 31st


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