- 49 African countries have reported at least one confirmed coronavirus case as the continent scrambles to formulate an effective response
- Finance ministers have appealed to G2O nations for an emergency $100bn stimulus package
- $44bn of this could come from waiving interest payments on sovereign debt, according to UNECA
- AfDB has issued a record-breaking $3bn social bond in an effort to support African countries
- South Africa, Kenya, Zimbabwe, Nigeria and others have started lengthy lockdowns
Global stock markets have shed over $13tn since the Covid-19 outbreak. African economies will inevitably be hit hard.
Currencies (against USD)
As investors took refuge in the dollar, the currency has strengthened against many of its peers. African currencies have on the whole stood their ground other than the South African Rand, which is down 32% since the start of the year (from 14.11 rand to the dollar, to 18.64 today).
Nigeria’s Naira is down 8% since the start of the year (YTD).
Ghana’s Cedi is down 6% since February and 2% YTD.
Egypt’s Pound has been stable, actually gaining 2% YTD.
Kenya’s Shilling, which was stable against the dollar throughout 2019, is down 5% YTD.
Oil & Gas / Mining
Commodities including oil and gas represent a huge portion of Africa’s exports – around 90% in Nigeria and up to 99% in South Sudan. African economies are therefore largely dependent on commodity receipts for access to hard currencies. Given the global slowdown many commodities, other than gold, have seen their prices fall on global markets:
Gold has stood its ground and is up a little under 20% since the start of the year, and given market volatility it’s often considered one of the ‘safer’ assets people turn to in turmoil.
Copper is down 20% since the start of the year. Copper bounced back on Tuesday after a rebound in Chinese manufacturing activity. Copper rose by more than 4% on Tuesday to $2.248 a pound ($4,955 a tonne). The metal has been highly volatile and in the middle of March traded below $2.00, levels last seen during the global financial crisis of 2008/09.
Oil and Gas has suffered from both a fall in demand and following a tit for tat spat between Saudi Arabia and Russia, an increase in supply. Having started the year at around $67/barrel, it fell to under $25 by the end of March. The Chinese and Americans have openly stated that they will use these low prices to replenish their oil reserves. Oil rallied following what appears to be a truce between the Saudis and the Russians increasing by 12% to $27.88 .
To read our Covid-19 economic analysis from our Head of Intelligence, Desné Masie, click here.
The IMF has completed discussions with Senegal over a $221m loan to deal with the fallout of the coronavirus pandemic.
The support, to be considered by the Fund’s executive board in mid-April, will allow the authorities to meet urgent budgetary and balance of payment needs stemming from the deterioration in global economic conditions and the spread of COVID-19 in Senegal.
‘The COVID-19 pandemic has weakened the macroeconomic outlook for Senegal’s economy.
Containment measures to avoid the propagation of the virus, lower external demand, reduced remittances, and the sudden stop of travel and tourism are having a significant impact on growth and generating an urgent balance-of-payments need.
The IMF will help preserve fiscal space for essential COVID-19-related health expenditures, while catalysing additional donor support,’ reads a statement from the Fund.
Senegal has declared a state of emergency, closed schools, suspended flights, banned public gatherings, and implemented a curfew.
The IMF said last week that 20 African countries had contacted it with bailout requests and said it was expecting at least 10 more.
Commodities are being challenged by the pandemic in all sectors.
The Covid-19 outbreak will affect mining companies, which have seen projects slowed or mothballed as social distancing requirements and lockdowns make their operations impracticable.
Some mines have thousands of men and women underground, working in close proximity. Share-prices of listed mining companies have all taken a hit as commodity prices have tumbled.
Platinum and palladium prices have dropped by more than 40% in just three weeks.
Resultantly, South African miners Sibanye-Stillwater’s and Impala Platinum’s share prices fell 60% in the past four weeks while Anglo American is down about 40%.
South Africa’s mining sector is particularly exposed to the spread of Covid-19 during the country’s 21-day lockdown.
According to the Minerals Council of South Africa, the industry employs a workforce numbering almost 420,000, many of whom are underground on any given day.
However, the South African mining industry’s experience with HIV-AIDS and tuberculosis should stand it in good stead.
South Africa has invested in health infrastructure and has experience with contact-tracing because the procedure with a tuberculosis diagnosis is similar to that of coronavirus.
The Minerals Council of South Africa has also published a 10-Point Action Plan for COVID-19 which outlines several measures to deal with COVID-19, using WHO best practice.
The pandemic may lead to increased and accelerated automation in mining as companies adapt to the changed working conditions under the pandemic.
In the past week a number of African superstars from music, football and science have lost their lives to COVID-19.
The Cameroonian musician and super star Manu Dibango died in Paris last week after catching the virus shortly before.
You can read, in what is possibly his last official interview, an exclusive interview with the singer by our sister publication New African Magazine.
Another African icon, this time from the world of football passed away from Covid-19.
Senegalese Pape Diouf was the president of French giant Marseille, the first black president of a global football club. Tributes poured from all corners of the football community.
Yesterday, it was announced that South African scientist Gita Ramjee died on Tuesday of Covid-19 complications.
Prof Ramjee had recently returned home from a trip to London and was admitted with pneumonia to a hospital in KwaZulu-Natal province, the Daily Maverick news website reports.
Her research work focused on ways to prevent HIV transmissions in women in South Africa, earning her global recognition in the world of science and beyond.
The United States Agency for International Development (USAID) has allocated $7m in humanitarian and health assistance to help Somalia combat COVID-19.
Confirming its first case last week, Somalia today has five COVID-19 cases.
As the government contends with al-Shabaab, regional disputes and locust swarms, many fear that Somalia will be unable to deal with the onset of the virus.
USAID had earlier released $8m to help Kenya, Ethiopia and Somalia control the second generation of locusts which had troubled the region at the start of the year.
Across the world, COVID-19 has forced government, industry and people to collaborate in a way that was unimaginable six months ago.
Car manufacturers have shifted their production units to produce ventilators. Supermarket carparks have become testing labs. Stadia and conference centres are being transformed into field hospitals.
Uber is using its drivers to offer free trips for critical health workers. In the UK, Deliveroo, a food delivery business, and a chain of restaurants will be providing 500,000 meals free of charge to nurses and doctors on the front line.
And luxury brands, from perfume makers and distillers to fashion houses, are using their facilities to produce alcohol-based gel and personal protective equipment.
In Kenya, in an initiative called Safe Hands Kenya, a number of start-ups including Twiga Foods, Jumia and Cellulant are collaborating to provide hand sanitizer, soap and disinfectant.
Another consortium of businesses is collaborating to turn sugar cane into ethanol (a key component to make the alcohol gel) and working with other manufacturers to help bottle and distribute free of charge to the masses.
In some cases, what’s needed is cash to help sustain businesses. In South Africa, the Oppenheimer family have donated $55m in cash to help small businesses.
Given limited time and limited capacity, government, people and business are having to look at new ways to overcome the health and economic challenges that have been exposed by the virus.
Sierra Leone has announced a three-day lockdown from Sunday 5th April, following its second confirmed coronavirus case.
The West African nation had already declared a year-long public health emergency and banned all commercial flights and schools.
It adds to a growing list of African countries entering lockdowns including Nigeria, South Africa and Kenya.
While mobile money is the preferred method of payment in East African countries like Kenya and Uganda, its adoption has been less successful in other parts of the continent.
Since staying indoors and avoiding contact is a key way to prevent coronavirus from spreading, cashless transfers are surging in Africa.
Mobile money providers have reduced or waived transaction fees and governments are encouraging digital payments to reduce person-to-person contact and potentially slow the spread of the virus.
In West Africa, only one in four adults use mobile money.
“I think right now there is a really key trigger point, and that could be seized on to leap forward,” Jill Shemin, an independent consultant on digital finance in West Africa told Reuters.
Since Africa confirmed its first COVID-19 case in February, the virus has spread to 49 out of 54 countries as the continent braces for an escalation similar to Europe and North America.
The five countries in Africa without confirmed coronavirus cases today are São Tomé and Príncipe, Comoros, South Sudan, Lesotho and Malawi.
While small island nations are less likely to be affected by a pandemic, it’s less clear why certain mainland countries have taken longer than others.
Lesotho is surrounded by South Africa which has almost double the number of cases than any other African country.
Despite closing all borders and prohibiting any movement since March 12, these measures have not helped other countries to keep the virus at bay.
Malawi also declared a national disaster and shut down schools without any cases, but this has not proven to help in other examples.
One factor to be considered is the lack of adequate testing equipment.
South Sudan announced yesterday it had only tested 18 patients since the outbreak of the coronavirus pandemic, all of which were negative.
Somalia has sent 20 doctors to help contain the spread of coronavirus in Italy which has seen its death toll surge past 10,000 as one of Europe’s most affected countries.
The doctors are volunteers from the Somali National University and have been sent following an appeal from the Italian government for international help, according to government spokesman Ismail Mukhtar Omar.
“The 20 doctors have already been registered in Italy and are expected to team up with doctors from across the world to help Italy contain the coronavirus,” he said.
Data: Cédric Moro, I-Resilience
Top 5 confirmed cases by country