According to the Economic Commission for Africa (ECA), in a new report on the coronavirus pandemic, says over 300,000 Africans could lose their lives as a direct result of COVID-19, depending on the intervention measures taken to stop the spread. With the continuous spread of this virus globally, Governments and institutions around Africa are invigorating themselves for the impact of COVID -19 Pandemic on their economies.
The impact of the pandemics and the containment measures applied to slow down the spread of the virus will unavoidably affect levels of economic activity even when the pandemic is suppressed.
The slowdown in economic activity brough about by the continuous spread of Covid-19 has already been felt in Africa, where restrictions to the movement of people and goods are having a strong impact on economic growth.
In order to cushion the effect of the crisis on households and economic activity, governments, and institutions are designing a wide range of policy responses, including direct income-support, and deferred interest payments on debt.
The coronavirus can be very harmful to African economies, and would impact the economic prospect of Africa; which was projected to grow at a steady rate from 3.4% in 2019 to 3.9% in 2020 and 4.1% in 2021 driven mainly by a gradual shift from private consumption toward investment and exports to China and EU.
Several countries and economic regions have taken economic and financial measures to contain the Covid-19 while also providing financial support to their economic activities.
Below are the measures taken by African leaders, and institutions to mitigate the effect of COVID -19 on their economies.
Algeria -Bank of Algeria decided to reduce the rate of compulsory reserve of 10 to 8% and to lower by 25 basis points (0.25%), the key rate of the Bank of Algeria to fix it at 3.25% and this from March 15, 2020.
Cote d’Ivoire-The government announced $200m as a Covid19 response. The establishment of a Fund to boost the economic activities, support affected businesses in order to mitigate jobs cut, etc.
Ethiopia- The government has announced that it has allocated $10 million to the fight against the pandemic and put forward a three-point proposal on how G20 countries can help African countries cope with the coronavirus pandemic
• Calls for a $150 billion aid package – Africa Global COVID-19 Emergency Financing Package.
• Implement debt reduction and restructuring plans,
• Provide support to the World Health Organization (WHO) and Africa Centers for Disease Control and Prevention (CDC) to strengthen public health delivery and emergency preparedness on the continent.
Equatorial Guinea- The government committed to contribute $10 million to the special emergency fund.
Eswatini- Central Bank of Eswatini announced to reduce the interest rate from 6.5% to 5.5%
Gambia- Central Bank of The Gambia decided to:
• reduce the Policy rate by 0.5 percentage point to 12 percent. The Committee also decided
• increase the interest rate on the standing deposit facility By 0.5 percentage point to 3 percent. The standing lending facility is also reduced to 13 percent from 13.5 percent (MPR plus 1percentage point).
Ghana- Government announced $100 million to enhance Ghana’s COVID-19 preparedness and response plan Bank of Ghana’s MPC has decided to lower the Monetary Policy Rate by 150 basis points to 14.5 percent. The Primary Reserve Requirement has been reduced from 10 percent to 8 percent to provide more liquidity to banks to support critical sectors of the
The Capital Conservation Buffer (CCB) for banks of 3.0 percent is reduced to 1.5 percent. This is to enable banks provide the needed financial support to the economy.
This effectively reduces the Capital Adequacy Requirement from 13 percent to 11.5 percent. Loan repayments that are past due for Microfinance Institutions for up to 30 days shall be considered as “Current” as in the case for all other SDIs.
All mobile phone subscribers are now permitted to use their already existing mobile phone registration details to be on-boarded for Minimum KYC Account.