Africa Economic Brief - COVID-19 PANDEMIC Potential Risks for Trade and Trade Finance in Africa - Volume 11 | Issue 6

Publisher:
African Development Bank
Publication Date:
23 June 2020
Tags:
Africa, Coronavirus, Trade

The rapid spread of Covid-19 poses significant public health and economic threat to the global economy. In response, many African economies, like the rest of the world, have put in place measures that have invariably reduced physical interactions, closed borders, and shut businesses. These measures are meant to save lives and limit the impact of the pandemic on already weak public health infrastructure, but they are also expected to dampen the region's GDP growth. Current estimates show that Africa could experience its first recession in 25 years due to the potential impact of Covid-19, with economic growth falling -3.4% to -1.7% in 2020 alone (AfDB 2020). This projection is in line with those of other institutions such as the World Bank (2020), and UNECA (2020). While a large part of that decline will stem from the disruptions to domestic economic activities due to the containment measures, some will result from the potential risks the pandemic poses to African trade and the trade finance that underpins it.

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