Impact Assessment of Covid-19 - The Case of Eastern Africa UNECA Sub-Regional Office for Eastern Africa - United Nations Economic ...
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Impact Assessment of Covid-19
The Case of Eastern Africa
UNECA Sub-Regional Office for Eastern Africa
Eastern Africa one of the fastest growing regions in the world
Average Growth Rates (%), 2014 - 2020
8% In 2019, the fastest
Eastern Africa-12
7.0 7.0 growing economies were:
7% 6.6 6.6 6.4
6.1
6% 5.7
5%
3.8 Africa
4%
3.1 3.2 3.2
3.0 2.9
3% 2.5
2.7 2.9 2.7
2.8
2% 2.3 2.5
1.6 World
1%
0%
2014 2015 2016 2017 2018 2019* 2020*
Source: National sources, UNDESA, ECA calculations
Note: Eastern Africa average excludes Somalia and South Sudan; *Estimate/forecast
Despite high levels of growth, Severe economic vulnerabilities still
remain in Eastern Africa as a whole…
Slow paced structural change
Demographic pressures
Lack of job opportunities
Reduced trade performance in recent yearsDemographic pressures are real…
Working Age Population (millions)
Annual Increase between 2015 and 2030
2.5
2.1
2
Each year, these economies
1.5 need to create an aggregate
of
7 million new jobs
1.2
1 1
1
0.5
0.5 0.3
0.2
0.1
0 0 0
0
lia
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ti
So s
ia
a
ia
Et a
da
Ta n
Rw r
ca
lle
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e
d
da
ou
op
an
So ma
an
itr
an
as
he
Su
ib
nz
hi
Er
K
Ug
ag
Dj
h
ad
Se
ut
Source: UNdata & ILOYet job creation has not kept pace with economic expansion
GDP vs. Employment Growth Rates
Average between 2006 and 2016
8%
Employment Growth Rate
6%
6% growth required
simply to absorb new
entrants to job market
4%
Madagascar Kenya D.R. Congo
Comoros
Ethiopia
Burundi Africa Uganda Rwanda
Djibouti Tanzania
2% Eritrea Seychelles
XX
Somalia Job creation rate well below
rate of economic expansion
0%
0% 2% 4% 6% 8% 10% 12%
GDP Growth Rate
Source: UNdata & ILOIntra-regional trade has stopped growing and stagnated over the
past decade in Eastern Africa
Intra-Regional Trade (USD m)
EAC IGAD
3500 3500
3000 3000
2500 2500
2000 2000
1500 1500
1000 1000
500 500
0 0
95
96
97
98
99
00
01
02
03
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Source: ECA; UNCTADstatCovid-19 brings a whole new level of vulnerabilities…
In Africa as a whole and Eastern africa in particular, some
economic effects are expected in the Service sector:
• Slow-down in economic activity due to preventive and restrictive measures
• Will result in
• Losses to regional Airlines
• Loss of public revenues and houselholds income through tourism-related
activities;Regional exports heavily dependent on services, so if economic activity
slows down and services are hit, effects could be substantial
Transport Services
14%
Travel Services
5%
Other Services
Merchandise Trade 20%
61%
Source: UNCTADStatAfrican services trade generate more than 150 Bn USD per year
African Services Exports, USD Billions
200
150
100
50
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
-50
-100
imports exports Trade balanceTrade deficits are less present in services than in Merchandises
Ethiopia
Kenya
Tanzania
Uganda
Madagascar
Merchandise trade balance
Seychelles
Service trade balance
Rwanda
Somalia
Djibouti
Burundi
D.R. Congo
-15,000 -12,000 -9,000 -6,000 -3,000 0 3,000
USD million
Source: UNCTADStatThe Contribution of Tourism sector in some Top Tourism destinations in Africa
amount to 140 bn USD in 2019. In a scenario where the sector looses 20% of
revenues, that will correspond to a 28 bn USD loss from COVID.
GDP (USD bn) % share of Visitor % share of International
GDP exports exports arrivals (mn)
South Africa 32.1 9 9.7 9 10.5
Egypt 29.6 12 12.2 27 11.3
Morocco 22.7 19 9.6 20 12.3
Nigeria 18.6 5 1.6 3 -
Kenya 8 9 1.7 15 1.5
Ethiopia 7.4 9 2.5 38 0.9
Tanzania 6.7 12 2.5 28 -
Tunisia 6.5 16 2.2 11 8.3
Cote d’Ivoire 4.6 10 0.5 4 1.8
Mauritius 3.5 24 2.2 37 1.4Air transports provide substantial revenues to several economies
(about 9 bn USD in total for countries listed below). With flights
suspended because of COVID 19, important losses ahead.
Top African Air transport exports, USD Millions, 2017
Ethi opia 2,576
Morocco 1,598
Egypt 1,439
Kenya 828
Tunisia 580
Madagascar 337
Mauritius 274
Algeri a 256
Rwanda 183
Seychelles 156
United Republic of Tanzania 155
Togo 139
Côte d'Ivoire 125
Ghana 122
Namibi a 114
Cabo Verde 86
0 500 1000 1500 2000 2500 3000Some African economies dependent heavily on tourism: Among the top 10
in this category, 3 are from Eastern Africa (Toursim share of GDP, %)
Botswana 13
Rwanda 14
Madagascar 16
Tunisia 16
Morocco 19
Gambia 20
Mauritius 24
Sao Tome and Principe 28
Cape Verde 46
Seychelles 67
0 5 10 15 20 25 30In Eastern Africa the contribution of tourism to the economies varies across
countries, and so COVID 19 will have different effects via this sector
EA Tourism Percentage Share of GDP
Democratic Republic of Congo
Uganda
Tanzania
Seychelles
Rwanda
Madagascar
Kenya
Ethiopia
Comoros
Burundi
0 10 20 30 40 50 60 70For the continent, the number of tourists coming from African countries
is growing, but that might not be enough to protect the sector from
experiencing important losses as travel bans are in the rise
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
2013 2014 2015 2016
Africa Arrivals Total arival sIndeed, the origin of Toursists is well diversified for several countries,
but still COVID is likely to affect substantially the revenues
Distribution of Tourists by region of origin (in %)
Kenya, 2019
Tanzania
Cote d'Ivoire
South Afri ca
Morocco
Seychelles
Egypt
0 10 20 30 40 50 60 70 80 90 100
Tourists from Africa Tourists from Asia-Pacifc Tourists from Americas Tourists from Europe Not specifiedthe region is a net commodity importer…
Ethiopia
South Sudan
Somalia
Uganda
Kenya
Net Exporter Congo (DRC)
Net Importer Tanzania
...and so the overall impact of CODIV
is likely to be more ambiguous as
Madagascar
prices of oil and other commodities
are goind down Powered by Bing
© GeoNames, HERE, MicrosoftConclusions
1. Regional growth likely to be very negatively impacted by Coronavirus
2. Measures to prevent spread of disease will slow down economic activity and
hit severely the Service sector, across the board.
3. Commodity Price shock will hit hard the net commodity exporters in the region
– but will be more ambiguous on other countries.
4. Disruption to trade likely to be severe – but will require creative responses by
regional governments to scarcities in some sectors.
5. Over the mid-to long-term, disruption in supply chains (particularly with China)
could lead to filling the gap by regional producers – need to implement the
AfCFTA!Andrew Mold
Chief, Regional Integration and AfCFTA Cluster
UNECA Sub-Regional Office for Eastern Africa
Kigali, Rwanda
www.uneca.orgYou can also read
