ECA estimates that a one-month full lockdown across Africa would cost the continent about 2.5 per cent of its annual GDP, equivalent to about $65.7 billion per month. This is separate from and in addition to the wider external impact of COVID-19 on Africa of lower commodity prices and investment flows. A full lockdown is assumed to involve the continuation of only essential services (such as food services and grocery shops, and health and security services), with the significant curtailment of other economic activities. Private consumption, investment and labour supply and demand drop significantly while government consumption and trade operate at a relatively normal level. These results are similar to those forecasted in other regions.
The Organization for Economic Cooperation and Development (OECD) estimates a decline in annual GDP growth of up to 2 percentage points for each month that strict containment measures continue among the wealthy group of OECD countries.1 Official data from the United Kingdom of Great Britain and Northern Ireland and France forecast a fall in economic activity of around 35 per cent for the duration of their lockdowns, equivalent to around a 2.9 percentage points fall in annual GDP per month, but a bounce back is expected quickly thereafter.2 In these economies, the sectors to suffer most are education, accommodation and food services, construction and manufacturing. Agriculture and financial services are estimated to suffer least.
Preliminary firm-level survey data for Africa presents a situation that is potentially even more dire (these data, however, include the added impact of the global external shock in addition to lockdown costs). On average, businesses in Africa report to be operating at only 43 per cent, with larger firms reporting to operate at a slightly better capacity. The subsectors of manufacturing, health, entertainment, utilities and transport and trade report to be operating at the lowest possible capacities.
The top challenge reported by African businesses is a drop in demand, followed by lack of operational cash flow, reduction of opportunities to meet new customers and closure of business.