Fresh AU report shows that Africa could lose $270 billion due to COVID-19

Fresh AU report shows that Africa could lose $270 billion due to COVID-19

- A report by the African Union shows that the continent could lose about $270 million in revenue due to the coronavirus

- The report also showed that the continent's economic growth could shrink from 3.4% to 0.9% as a result

- The possible losses have been attributed to the outbreak of the coronavirus in the world

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The African Union (AU) has reported that Africa could lose an estimated $270 billion in revenue due to the COVID-19.

The AU added that the continent’s economic growth could contract to as low as 0.9% from 3.4% on average.

It explained that the loss could result in a disruption of the world’s economy through global value chains, the abrupt falls in commodity prices, fiscal revenues and the enforcement of travel and social restrictions in several African countries.

Fresh AU report shows that Africa could lose $270 billion due to COVID-19
AU's chairperson, Cyril Ramaphosa of South Africa Source:
Source: UGC

READ ALSO: COVID-19 leads to possible fall in oil prices; fears grow over possible shutdown for months

Per a report by the Business and Financial Times, the tourism and travel industries would be hit the hardest by the outbreak, with an estimated loss of about $50 billion.

According to the International Air Transport Association (IATA), international bookings in the continent fell by about 20% in March and April 2020.

It added that ticket refunds have increased by 75% between February 1, and March 11, 2020, compared to the same period in 2019.

The IATA further explained that African airlines have already lost US$4.4 billion as of March 11, 2020, with Ethiopian Airlines recording a loss of US$190 million.

It indicated that the economic contribution of the air transport industry in Africa stands at $55.8 billion dollars, supporting 6.2 million jobs and contributing 2.6% of the Gross Domestic Product (GDP).

In other news, the Economic Commission for Africa (ECA), has estimated that Africa has lost about $65 billion in revenue since the outbreak of the coronavirus.

On Friday, March 13, 2020, the ECA explained that the crisis could negatively affect Africa’s growth plan which is already stagnant.

At a press conference in Addis Ababa, Ethiopia, it added that oil-exporting nations are losing revenue as crude oil prices continue to tumble.

The Executive Secretary of the Commission, Vera Songwe, explained that the effects of the coronavirus on China were negatively affecting trade with Africa.

READ ALSO: COVID-19: Gov't predicts 1.5% fall in GDP growth due to partial lockdown

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