Africa has gradually worked its way up over the years to rank at the top of business and investor portfolios worldwide, and boasts some of the world’s fastest-growing economies. Long regarded as one of the most impoverished regions, Africa has produced a number of success stories in recent years, bringing with it an array of investors, businesses and jobs. But the arrival of the Covid-19 pandemic casts a grey cloud over what was a promising outlook for the year.
According to the IMF, Africa is expected to experience its first recession in 25 years in 2020 and lose billions of dollars in output. While the virus was slow to spread at first, it is now gripping the continent, with cases rising dramatically at the end of April.
Most countries moved swiftly to stem the spread of the outbreak, restricting movement of people, goods and services, and shuttering non-essential business. In the last week of April, just before a number of African markets started easing some of their restrictions, 7% of the companies and institutions surveyed as part of the OBG CEO Covid-19 Survey said they were completely shut down, 61% were operating at 1-60% capacity, and 32% at 61-100%. Tourism and construction are among the hardest-hit sectors, with the majority of companies in both industries (80% and 78%, respectively) operating
at 0-20% capacity.
While tourism activity is likely to remain depressed for the foreseeable future, the gradual easing of lockdowns and restrictions on movement in certain countries should help drive a recovery in the construction sector.