Since the outbreak of the coronavirus (known as COVID-19) pandemic, the global community has witnessed robust responses to limit the spread and simultaneously control the economic and social effects of the disease as the global trade contracts. As the deadly virus ravaged the globe it has plunged the global economy and disrupted both domestic and international supply chain logistics operations of goods and services with severe consequences on the global economy. Although still too early to draw clear conclusions on the social and economic impact of COVID19 pandemic on economies in Africa, early predictions are alarming.
Despite recording lower infection rates and fatalities, the extent of the economic consequences of coronavirus pandemic for many countries in Africa will be felt on three fronts: the domestic social front, the trade logistics and economic development front, and the foreign direct investment front.
The domestic social front
In the West and East sub regions as in other regions in the continent, the day-to-day activities of people were being brought to a halt due to the lockdowns, travel restrictions, curfews and social distancing rules imposed in urban centres and cities in region. The short-term effect has been the immediate hardship for many citizens as major commercial activities stopped without adequate alternatives for them. The populations in quarantine faced the uncomfortable choice between the possibility of death by starvation or the risks of being killed by Covid-19 and with no hope for any immediate humanitarian relief distribution of food and other essentials to cater to the needs of people in their homes.
In Lagos, Abuja and Accra, social and economic activities were grounded as factories shut down and employees laid off. Majority of employees in both public and private organisations could not work from home for lack of availability of electricity and absence of the enabling technologies to make it possible.
Disruption to businesses due to decline in consumption and overall economic uncertainty, have forced many businesses to close or reduce operation. Small business owners who depend on daily trade have equally affected as they were cash trapped. SMEs did not have enough revenue to cover their costs and other expenses and those in manufacturing could not get raw materials from their suppliers from other African countries like Cameroon, Kenya, Zimbabwe, therefore causing a significant slowdown in production. This has implications for inflation and capacity utilization, employment generation and retention as well as adequacy of products supply […]