African countries need to focus on collaborative action to stop GDP plummeting
As Covid-19 crisis stalls business, various scenarios show the continent will not escape economic contraction in 2020
The Covid-19 pandemic already taken hundreds of lives in Africa, and the number of recorded cases is growing rapidly. Action to stem the spread and care for the sick is the immediate health-care priority. However, the crisis is also stalling business activity and disrupting millions of people’s livelihoods — and could push Africa into a deep economic contraction unless bold action is taken by governments, the private sector and development institutions.
New analysis by McKinsey & Company finds that the crisis could reduce Africa’s collective GDP growth by three to eight percentage points in 2020, in the absence of major fiscal stimulus. We modelled four scenarios for how differing rates of Covid-19 transmission — both globally and within Africa — would affect the continent’s economic growth. And we factored in the effect of the oil price, which has fallen by about 50% in the past month...
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