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Africa Faces a GDP Loss of $145b As Tourism Hit Hardest By Pandemic

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At mid-year, African economies, already battered by the Covid-19 pandemic are now facing a total GDP loss of at least $145.5 billion.

With many countries recording an unprecedented surge in the number of infections, and the continent’s total cases surpassing the half million mark as per World Health Organisation data, Africa is forecast to suffer GDP losses of between $145.5 billion and $189.7 billion from the pre-Covid-19 estimated GDP of $2.59 trillion.

In its latest African Economic Outlook 2020 Supplement report, the African Development Bank (AfDB) says that despite countries embarking on a cautious reopening of economies to stem further damage, the impact of the pandemic is bound to be severe.

Losses are expected to be carried over to 2021 because the projected recovery will only be partial with losses ranging from $27.6 billion (baseline) up to $47 billion (worst case) from the potential GDP of $2.76 trillion without the pandemic.

Cumulatively, the pandemic could lead to GDP losses in 2020-21 of between $173.1 billion and $236.7 billion in current value terms.

Under the baseline scenario, real GDP growth is projected to fall by 1.7 per cent in 2020, corresponding to a GDP drop of 5.6 percentage points from the January 2020 pre-pandemic projections. If the pandemic continues beyond the first half of 2020, GDPgrowth would drop to 3.4 per cent from the rate of 3.9 per cent projected before the onset of Covid-19.

“The most affected economies are those with poor healthcare systems, those that rely heavily on tourism, international trade and commodity exports, and those with high debt burdens and high dependence on volatile international financial flows,” says the report released on Tuesday.

Regionally, East Africa is projected to have the most resilient performance amid the pandemic after entering the crisis with strong growth of 5.2 per cent in 2019.