Socioeconomic impacts of COVID-19 – can globalization prevail in the face of the impeding recession? As the COVID-19 crisis continues to deepen, the significant health and economic consequences of this disease is crippling even the most developed nations. With <0.5% of globally confirmed cases occurring in Africa, the continent appears so far to be relatively spared the untoward direct health consequences of the COVID-19 pandemic. The disease nonetheless has already had a destabilizing effect on the lives of millions of Africans with disproportionate impact on the poor and underserved. The interconnectedness that characterizes globalization has brought economic benefits to many African countries. With COVID-19, there have been disruptions in Africa’s global supply chains in the face of tumbling oil prices and a lowered global demand for African non-oil products, which constitutes a threat to the economic stability of the continent. Projected losses from oil shocks alone may result in a reduction in Africa’s export revenues by about US$101 billion in 2020. This dip in oil prices will disproportionately put in economic and fiscal peril resource-dependent countries like Angola, the Democratic Republic of the Congo (DRC), Nigeria as well as other oil importing African countries. Before the virus spread into Africa, the International Monetary Fund (IMF) in mid-February 2020 warned the continent of the impending risk of an economic slowdown as China, where the virus emerged, is the largest trading partner and foreign investor of many countries in the continent. Many African countries are interconnected to affected economies of the United States and European Union.
The growth deceleration in these major economies will have a negative impact on price of goods exported from Africa such as mineral ores and metals Conservative estimates suggest that COVID-19 could cause Africa’s GDP to drop by as much as three to eight percentage points with projected economic losses of between US$90 and US$200 billion in 2020 alone The United Nations Development Programme (UNDP) estimate that this pandemic could result in the loss of nearly half of all jobs in Africa where unemployment is already a major concern. This is likely to further aggravate Africa’s fragile economic situation, one in which as many as 422 million people (one in three Africans) are estimated to be living below the international poverty line, i.e. $1.90 per day. In an attempt to fight COVID-19, many African countries have adopted some international policy trends such as border closures, strict migration measures, imposition of quarantines, and enforcement of stay-at-home orders. These measures embody the dialectical quality of contemporary globalization: on the one hand they reflect the rapid communicative and even hegemonic nature of global knowledge exchange; while on the other hand they accentuate boundaries instead of eroding them and limit interactions across socio-economic, political, and technological spheres. This substantial disruption in globalization’s economic integration has led to retardation of key sectors such as air transportation and tourism, with a concomitant reduction in trade, remittances, and investments. In the face of waning official development assistance to the continent and capital flight, unemployment and food insecurity is likely to be exacerbated across the continent.
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