Coronavirus: ‘Don’t underestimate Africa’s resilience’ – David Cowan
The virus has sparked concerns about cataclysmic economic impacts on the continent.
The World Bank are worried that Africa might see its first recession in a quarter of a century, and that the continent’s GDP may contract by over 5%.
A group of leading African economists and politicians have called for debt payments to be suspended.
David Cowan, the chief economist for Africa at Citibank, the US investment bank, is more sanguine.
Certainly he sees a major hit on the currencies of oil exporters, predicts extremely difficult times ahead for tourist hubs, and does not downplay the human cost.
But Cowan also believes that analysts consistently overhype negative concerns about Africa, and that the continent is more resilient than many realise.
Much of the continent is still a subsistence agriculture economy, so “the worst case scenario is 2-3% GDP growth – so to get negative GDP growth in Africa [excluding South Africa] you actually have to have physical destruction of property”, says Cowan.
And the coronavirus may even provide windows for economic reform.
Nigeria, for example, may be in a better place to remove fuel subsidies; something which Cowan suggests would help Aliko Dangote’s refinery project.