Multilateralism was in crisis well before the Covid-19 pandemic brought the global economy to its knees. And not even the Great Depression (1929-1932) created the incredibly deep, instant mess the world suffered in QII 2020 as all of a sudden, lockdown became the top public health policy. Was the pandemic a black swan? Not at all. It was a statistically remote but foreseeable event. Actually, in 2004, the World Health Organization (WHO) stated that the world was ill-prepared for an inevitable flu pandemic.
What follows is speculation. There is some evidence of tourist patterns and flows since January 2020, but we do not know if these immediately revised patterns and flows will be repeated after the pandemic has been defeated.
African economies are being hit hard by the economic crisis triggered by the COVID-19 pandemic. According to the UNDP, almost a decade of human development progress is at stake. Although the numbers of reported infections, hospitalisations and deaths on the continent remain much lower than in other regions, the crisis is taking a heavy toll on Africa’s growth and development prospects. The 2020 recession – the first in 25 years – will trigger increases in poverty and food insecurity across the continent.
“The first recession in the region over the past 25 years”. The World Bank’s forecasts for sub-Saharan Africa’s growth in 2020 set out a troubling scenario in which the most fragile sectors of society will be especially affected.
Remittance inflows to sub-Saharan Africa in 2019 stood at US$46 billion and were projected to increase to US$65 billion in 2021, based on the increasing trend from the previous years. But, with COVID-19 hitting most migrant-hosting economies hard, remittances to sub-Saharan Africa (SSA) are expected to decline by about 23.1% in 2020.
Tourism is an important economic sector for Africa. According to the United Nations World Tourism Organisation, Africa received 71.2 million international arrivals in 2019 amounting to about US$ 40 billion in revenue. This represents a 4 percent growth in arrivals over that of the previous year.
With the outbreak of COVID-19, prices for oil fell precipitously. On December 31, 2019, North Sea Brent crude, a benchmark, sold for approximately $68.00 a barrel. However, when on April 20 traders recognized that the coronavirus was a global pandemic, prices for Brent dropped to a little more than $25.00 per barrel. In the United States, West Texas Intermediate (WTI), another benchmark, dropped to negative values when producers confronted a choice to shut down their installations or pay buyers to stock their crude.
In August 2020, the number of confirmed COVID-19 cases in Africa had risen to a million and caused about 30,000 deaths, which is lower than in other world regions. African governments acted quickly and learned lessons from policies on other continents hit earlier by the pandemic. As early as March 2020, many authorities enacted containment measures — including lockdowns, school closures, e-schooling, travel restrictions — to control the outbreak, in combination with digital solutions and health, economic and social policies.
One thing is certain about COVID-19. We don’t know how long it will last, how many will be affected, and what the impact will be on society and the economy. Even the medical science questions – such as vaccines, mutations, explanations for variations in death and infection rates – remain currently unresolved, and approaching epidemiological uncertainty radically increases again.
Global growth estimates leave no room for doubts: 2020 will record a historic recession. Africa will not be spared: with the first year of negative growth in a quarter of a century, the continent's economic shrinkage will also be the most severe since the 1970s. Progress made over the past two decades will be eroded. However, despite the fragility of poorly diversified and industrialized economies, the overall economic contraction in Africa is set to remain more limited when compared to other world regions. Why?