AfricaEconomy

Output from Southern Africa to contract more than 6% through COVID-19

The Southern Africa sub-region was poised to grow by 2.1% in 2020 before the coronavirus struck, African Development Bank estimates said

Southern Africa’s economic output will shrink by as much as 6.6% this year under the impact of the coronavirus pandemic, the African Development Bank (AfDB) said.

The bank’s best-case scenario sees sub-regional output growth at -4.9%. with a 6.6% contraction forecast in the worst case. That is against AfDB forecasts for Africa as a whole of -1.7% in the best case and -3.4% in the worst.

The AfDB estimates that the Southern Africa sub-region, which includes the continent’s most advanced economy, South Africa, and its second biggest oil-exporter, Angola, as well as Botswana, Malawi, Namibia, Zambia and Zimbabwe, was poised to grow by 2.1% in 2020 before the coronavirus struck.

Safari tourism

When the pandemic was first detected in the region in March, most countries enforced lockdowns, which varied in strictness.

Some of the restrictions have been eased in recent weeks as governments looked to minimise the impact on economic activity, but most continue to place limits on external travel.

“Reduced travel and limitations on cross-border openings are bound to have a telling effect on the Southern African region, which accounts for over 45% of Africa’s travel and tourism industry,” the AfDB said in its outlook for the region.

Botswana, Namibia and South Africa, in particular, rely on wildlife and safari tourism. Visitors from China, Europe and North America are particularly attracted by the favourable exchange rate and warm climate, as well as the wide range of animals.

Southern African infections soar

The African Union said this month that African countries have lost almost $55 billion in travel and tourism revenues in three months because of the pandemic.

South Africa has recorded the highest numbers of COVID-19 cases in Africa, with close to 450,000 infections and nearly 7,000 deaths, dwarfing infections recorded elsewhere on the continent.

The AfDB said there was also a risk from rising debt, which the bank said had been on an unsustainable path over the past decade. It cited Zimbabwe, along with Mozambique and Zambia, as the countries most at risk of high debt distress.

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