‘Complete collapse of economies’ ahead as Africa faces virus

KAMPALA, Uganda — Some of Uganda’s poorest people used to work here, on the streets of Kampala, as fruit sellers sitting on the pavement or as peddlers of everything from handkerchiefs to roasted peanuts.

Now they’re gone and no one knows when they will return, victims of a global economic crisis linked to the coronavirus that could wipe out jobs for millions across the African continent, many who live hand-to-mouth with zero savings.

“We’ve been through a lot on the continent. Ebola, yes, African governments took a hit, but we have not seen anything like this before,” said Ahunna Eziakonwa, the United Nations Development Program regional director for Africa. “The African labor market is driven by imports and exports, and with the lockdown everywhere in the world, it means basically that the economy is frozen in place.

“And with that, of course, all the jobs are gone.”

More than half of Africa’s 54 countries have imposed lockdowns, curfews, travel bans or other measures in a bid to prevent local transmission of the virus. They range from South Africa, where inequality and crime plague Africa’s most developed country, to places like Uganda, where the informal sector accounts for more than 50% of the country’s gross domestic product.

The deserted streets in downtown Kampala, Uganda’s capital, underscore the challenge facing authorities across the world’s poorest continent, home to 1.3 billion people: how to look after millions of people stuck at home for weeks or even months of lockdown.

With some governments saying they’re unable to offer direct support, the fate of Africa’s large informal sector could be a powerful example of what experts predict will be unprecedented damage to economies in the developing world. Among the millions made jobless are casual laborers, petty traders, street vendors, mechanics, taxi operators and conductors, housekeepers and waitresses, and dealers in everything from used clothes to construction hardware.

Unless the virus’s spread can be controlled, up to 50% of all projected job growth in Africa will be lost as aviation, services, exports, mining, agriculture and the informal sector all take a hit, Ms. Eziakonwa said.

“We will see a complete collapse of economies and livelihoods. Livelihoods will be wiped out in a way we have never seen before,” she warned.

The U.N. Economic Commission for Africa has said the pandemic could seriously dent already stagnant growth in many countries, with oilexporting nations like Nigeria and Angola losing up to $65 billion in revenue as prices fall.

Economies in subSaharan Africa are seen as especially vulnerable because many are heavily indebted and some struggle just to implement their budgets under less stressful circumstances.

Now the continent might need up to $10.6 billion in unanticipated increases in health spending, and revenue losses could lead to debt becoming unsustainable, UNECA chief Vera Songwe said in March.

Urgent calls for an economic stimulus package have followed.