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Grim times: the impact of COVID-19 on African tourism and aviation industries

A few months into the pandemic, and the novel coronavirus has already got a steady grip on the hearts and minds of the majority of human population on Earth. Global crises are often said to be the ultimate equalizers – after all, everybody is susceptible to them regardless of the state of one’s bank account. But is this really the case with COVID-19?

General economic indicators

According to the recent reports, all world economies stand to lose from the global pandemic and the consequences of its mitigation. Unfortunately, the virus put policymakers into a tough spot: they have to weigh the horrifying death tolls against the arguably no less horrifying prospects of tens of thousands of people losing jobs and whole economies plunging into the recession. However, the state of major governmental institutions, such as education and health facilities, before the pandemic matters, and might give the counties in the Global North a much-needed safety cushion.

The situation may prove to be radically different for the developing world. According to the recent study by African Union (AU), COVID-19 could cost the continent $500 billion and a total of 20 million jobs in both formal and informal sectors. The report proposes two scenarios, each occurring with an equal probability. The first one suggests a five-months containment period with a projected 2020 GDP growth of -0.8%, while a slightly grimmer one predicts an eight-month timeframe to fight the virus, accompanied by a 1.1% decrease in the continent’s GDP.

Effects on tourism and aviation sectors

Adopting a more detailed approach, African Union estimates tourism to account for over 20% of total employment in Seychelles, Cape Verde, São Tomé and Príncipe, and Mauritius. In Nigeria, Ethiopia, South Africa, Kenya, and Tanzania it gives jobs to more than a million people per country. As of 2018, tourism contributed $194.5 billion or 8.5% to the continent’s GDP. With such an important role in Africa’s economic life, the sector needs all the help it can get, as AU predicts a $50 billion loss even in a more optimistic scenario.

Meanwhile, the aviation industry is crying out for help as well. Deeply affected by the travel restrictions around the world, African airlines had lost $4.4 billion in revenue by March 11th, 2020. This is a strong hit for the local economy. According to IATA, the continent’s air transport industry contributes up to $55.8 billion (2.6%) to GDP and employs 6.2 million people.

While the fate of Africa’s economy is yet to be determined and is largely dependent on the adopted mitigation strategy, it is already evident that the continent will require financial support on potentially unprecedented scale in order to maintain the situation under control. With the overall mood of political divisiveness, oil crisis and lack of global unity, this task may become particularly daunting.

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