Impact of Coronavirus on African Businesses, Trade and Economy
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Coronavirus is a respiratory illness that has emerged and spread globally. It affects all people, and thus has changed the social, economic, and political environment globally. Since the disease gets spread from one person to another, people have been forced to stay at home, and thus their social and economic routines have been disrupted. Coronavirus’ signs and symptoms include; cough, fever, difficulties in breathing, headaches, sore throats, and loss of smell. It is airborne, and the droplets containing the virus can remain on surfaces for a long time, and thus people are advised to observe respiratory etiquette (Wang et al. 2020). Such protocols include sneezing or coughing on a disposable towel or a flexed elbow. They are also advised to wear masks in public places and should avoid staying in crowded areas. Due to these measures people no longer travel so they can access the world though their smart phones. People no longer visit malls for shopping since they opt for online shopping and delivery. The entertainment sector has been affected since there are no longer social gatherings due to curfews and lockdown. The economy is no longer generating income instead the governments have been forced to find funds to help the unemployed citizens. Businesses have been closed and thus many people have become unemployed or have been forced on unpaid leaves. Businesses such as hotels and transport sectors such as airlines have been closed down as countries have closed their bounders; hence no people are allowed to move in and out of their countries. Businesses that involved foreign trade and people have been affected, such as tourism sector, since there are no visitors coming as people are advised to stay at home (Wang et al. 2020). This paper will discuss the effects that the Coronavirus has on the African trade, businesses and economy, and the impacts will be discussed in the segments of east, west, central, and North Africa.
Effects of Coronavirus in West Africa
Most of the West African countries deal in the production and exportation of oils and related products. Thus these countries are currently facing double problem; that is from the corona virus and from the decrease in oil prices. Due to the lockdown in most countries many businesses that uses oils to produce their goods and services have been closed down, thus the demand of oil and petroleum have reduced. Since there is no market for oils the West African countries producing oils have to sell them at lower prices. The exportation of crude oil in countries such as Nigeria has reduced by around fifteen percent. The sale of oils contribute largely to the countries’ gross domestic product (GDP) and with the closure of bounders due to Coronavirus, the West African countries are facing economic crisis (Nseobot et al. 2020). The West African countries are at a risk of going into a recession. The countries’ economies are not stable and therefore, they have been denied foreign aids and loans. Households lack funds thus the demand of goods and services have reduced, and countries such as Nigeria have introduced the economic stimulus package that aim at alleviating businesses and households to preventing them from hitting a downturn. The countries hope that the Coronavirus should not last for more than six months as the economy will have to go on a recession if it last more than that.
Small businesses, international trade, and the stock markets in West African countries have been greatly been affected by Coronavirus. The countries can no longer take place in international trade as they used to do before the emergence of Coronavirus. Many businesses are struggling to survive amidst the Coronavirus since there are few people who are going out to buy from them as they opt to stay at home. Most towns and cities have experienced a reduction in the number of people, thus small business lack customers. Such businesses include those who sell fish and groceries along the roads or in small stalls. Many people have lost their jobs due to Coronavirus, as their businesses were either closed, retrenched, or they were forced to go on unpaid leaves. Thus people lack funds to cater for their basic needs most of them that support the small businesses, and therefore the small businesses are at a risk of being closed. The stock market has also been affected as most of the people have opted to withdraw most of their savings and store them in a safe place. There have been adverse losses in the Nigerian stock return and there are economic and political policies that are recommended to curb the losses (Nseobot et al. 2020). such policies include; diversification of the economy, creation of a political environment, and creation of a flexible exchange rate to improve the financial market and ensure that new and more investors in the stock market.
Effects of Coronavirus in North Africa
Just like most of the countries globally, the North African countries have also been affected by the emergence of Coronavirus. Most of the North African countries’ economy depends on agriculture, oils, and petroleum products, tourism, and international trade for survival. Thus with the emergence of Coronavirus most of these economic sectors have been affected, and some have been crippled completely. Egypt, a country in North Africa was among the first countries to have reported the first cases of covid-19, and thus they took measures that restricted economic activities as a way to contain the disease (Arezki & Nguyen 2020). The North African countries’ gross domestic product is likely to reduce if the disease is not contained before June. For instance in Egypt, it is estimated that the GDP may reduce to 3.5% from 4.2% last year. The countries have high poverty levels and with the disruption levels it makes it difficult for them to access loans from World Bank and International Monetary Fund (IMF). the emergence of Coronavirus have reduced the number of investors willing to invest in north African countries and some of the investors have closed their operations in the countries, thus the economies of these countries are negatively affected. The prices of oils are likely to remain lower in this Coronavirus period. Some of the North African countries depend on the sale of oils to finance their expenses, and with the lower prices of oils and lack of an adequate market the countries’ economies will be affected significantly (Mhalla 2020). With the reduced prices of oils, inflation rates in north African countries is likely to increase and monetary policies are likely to become tighter. Some of the oil companies have closed their operations and thus many people have lost their jobs. Increased unemployment has negative effects on a country’s economy as most of them become dependent on the government. Thus such government has to spend most of their funds feeding its poor citizens, especially in this Coronavirus pandemic.
Tourism sector has also been affected by the emergence of Coronavirus in North African countries. Due to restrictions measures in the transport sector, the transport sector has been affected as there no foreign and domestic tourists visiting the tourist site and hotels. the closure has brought significant loss in the country, since most people in the transport, tourism, and hospitality sector have lost their jobs and no the government does not get its revenue from the sectors (Arezki & Nguyen 2020). Increased unemployment has negative effects on the economy since it makes people start depending on the government for food and other services, thus overburdening it. The financial markets in North African countries are uncertain and under pressure since there are few investors willing to invest their funds in the stock market due to the uncertainties.
Effects of Coronavirus in Central Africa
Many of the central African countries economies are anchored on the exportation of their products to china and European Union countries. Thus with the disruption of the manufacturing companies in china and other countries, it means that there will be less exports from the central African nation. Less export means that less income for the country and the exporters. countries such as Cameroon that depend on China on its exportation of oil products, cocoa, precious metals, wood, and gem will be affected since the countries are on lockdown and most of the manufacturing companies that uses the raw materials from central African countries are likely to reduce the demand of the raw materials. Some currencies in central Africa have continued to depreciate, and this means that the interest rates are likely to increase on the loans that they already have (Ndedi). Such depreciating currencies include those of Cameroon that have continued to depreciate since the emergency of Coronavirus in February, where it was 18 and in March it was at 587.1. The depreciation in a country’s currency will lead to an increase in the prices of manufacturing inputs, inflation of the export prices, and food prices will increase. Thus the citizens of those countries are likely to experience economic hardships during the Coronavirus period as the country strive to pay the international loans. The central African countries are also affected by the low prices of oils experienced globally. The demand of oil has reduced, and this will affect the central African nations that largely depend on exportation of oils such as Cameroon and democratic Republic of Congo (Laing 2020). There will be reduced taxes and revenues for the government and citizens. The oil companies will have great burdens of paying their debts and also the countries’ economies will grow slowly.
Effect of Coronavirus in East Africa
East African countries have also been affected by Coronavirus pandemic. Most of them depend on tourism for the survival of their economies, and with the ongoing lockdown and restrictions in movements, the tourism sector has been affected. Most of the hotels and other hospitality facilities that accommodate foreign and local tourists have been closed down (Wanjala 2020). People are advised to stay at home and most of the flights have been cancelled and only cargo flights are allowed in and out of the country. Thus many people in the tourism, transport, and hospitality sectors have lost their jobs as there is no business in this sector. Some countries have also closed bounders in some part of the countries such as in Kenya entry and exit of people in the Tanzanian and Somalia bounders have been restricted. This affect those residents that depend on these bounders to conduct their economic activities, thus they will lack a source of income. Many people are advised to work from home, and this has affected the small businesses that depend on the working class to earn their daily income. With few people moving out of their homes, it means that the small businesses have few customers to serve, thus their incomes have been affected significantly. The financial market has also been affected as the number of deposits in the banks and other financial institutions have reduced, as people opt to stay with their moneys at home as the future of the financial institutions is not known. Type stock market has also been affected as there are few people willing to invest during this period as the future is not known. The export sectors especially in the exportation of agricultural products, such as flower sector has been affected as there are few people demanding the products, and most of the workers in the flower plantations have been retrenched.
Effects of Coronavirus in Southern Africa
The arrival of Coronavirus has led to a lockdown in southern African countries, and therefore most of the businesses have been closed down. The closure of businesses in South Africa has not only affected the South African people but also other countries that depend on their industries for survival, such as Zimbabwe. Most of the Zimbabwe’s imports come from South Africa, and therefore the economies of the two countries have been significantly affected by the lockdown. Many people who depended on the industries for survival have lost their jobs, and therefore the countries are experiencing economic hardships. The tourism and hospitality sectors in these countries have also been affected as they receive high number of foreign arrival, who contributes largely to the country’s economy and many households that depend on the tourism sector for survival. The closure of flights by the South African Airways and Fly Emirates has affected the tourism sector in Zimbabwe and South Africa (Mhalla 2020). The lockdown and transport restrictions have reduced the remittances from the diaspora citizens in some of the countries in southern Africa, such as Zimbabwe. The remittances from the diaspora citizens play a crucial role in the supporting many people back in Africa. Thus if the remittances are not delivered most of the people will suffer and the demand of goods and services will reduce as people do not have money to purchase them. The cross border trade has been affected as most of the countries have imposed restriction in the transportation sector. Thus a lot of pressure is exacted on small businesses that have limited businesses, and are expected to produce most of products and may not produce the products due to a decline in the economy in most of the countries in Southern Africa.
Effects of Coronavirus in Africa
Africa’s economy is likely to be affected by emergence of Coronavirus as most of the countries depend on exportation of raw materials to other countries such as China and European nations. China is the most affected nation by Coronavirus, and therefore, they are less likely to demand the raw materials from Africa. If china gets consumed by the crisis it is less likely to concentrate in issue that does not contribute to national security. Thus the African nations will lack market for their raw materials (Bong ET al.2020). the global investors in Africa may be scared away by the pandemic, and therefore most of the countries that depend on China’s economy are likely to be affected significantly. The African currencies are experience a lot of pressure, especially Nigeria, Kenya, and South Africa. Due to lockdown and restriction in movement, the demand on the African products may reduce as countries such as china will no longer need the products due to closure of their industries. Failure to exports raw materials from Africa may affect the African economies that largely depend on the exportations. The ban of travels may affect the tourism sector that most of the African countries depend on for the survival of their economies (Hoque et al. 2020). Therefore if the international travel will be banned, the African countries are likely to experience economic hardship as they will no longer get the funds from the tourism and hospitality sectors. The pandemic may also bring an opportunity to African nations of being independent. They should find ways of meeting the needs of their people, and therefore, innovations will greatly help the African nations during and after the corona virus pandemic.
How Things will Look Like after Coronavirus
The future of a nation depends on how the government and the society will handle the Coronavirus pandemic. To handle the pandemic it is essential that the behaviors of human beings be monitored as well as its economic implication. The private sector continues to support most of the sectors that are essential to its citizens, thus state capitalism is likely to increase in the future (Buheji & Ahmed 2020). The private sector continues with their operations as most of the other sectors have been closed down. Thus the future of the economy is that the private sector will dominate the economy, unless the governments decide to support its companies which are impossible at the moment. State socialism is likely to be in the future. The most essential services produced now during this pandemic are aimed at improving the lives of people. More funds have been channeled to health facilities and in the provision of foods to people who cannot meet the needs for now. Thus in the future the society is likely to be united, and all people are assured of getting their basic needs since the countries are prepared to be independent.
Conclusion
Coronavirus is a global issue and many countries have been significantly affected. It is a respiratory illness and therefore, it has disrupted most of the activities that people used to do before its occurrence. The use of internet and technology has increased as people are supposed to work from home. Many businesses have been closed down, thus more people have become jobless, and they are experiencing a lot of economic difficulties. There are restrictions in movement and this has affected sectors such as tourism and agriculture. Exportation of farm products and other natural resources have become difficult, and therefore the African nations have been affected, since they major in exportation of raw material to Asian and West continents. It is not known how long the virus will stay, and therefore people should find ways of carrying out their daily activities but taking the necessary precautions to prevent the spread of Cvid-19.
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