“Fixing the economic impact of the COVID-19 pandemic could cost the Government over Rwf800 billion over two fiscal years. The spending would propel economic growth rate to an average of 8 per cent by 2022. “
The post-pandemic world will be a less forgiving one, writes Professor Danny Leipziger on African debt distress in the wake of COVID-19.
“South Africa’s tax revenue losses due to the coronavirus impact and credit ratings downgrades could amount to as much as 285 billion rand ($15.5 billion) in the current fiscal year, the commissioner of the revenue services said on Tuesday.”
“External pressure is rising markedly for Nigeria in the context of COVID-19. We project that the dramatic decline in oil prices since the beginning of the year—together with production limits under the OPEC+ agreement—will reduce goods exports by more than 40% in 2020. Despite significant import compression, we expect the current account deficit to remain sizeable.”
“As the pandemic wreaks havoc on economies and public finances, the natural question is: who’s next? More than 100 countries, including South Africa, have asked the imf for help.”
“Sub-Saharan Africa’s recovery from COVID-19 will be slow and uncertain. The IMF may be forecasting growth in 22 of the region’s 49 economies in 2020, but this growth is low, especially on a per capita basis. The resultant fiscal challenges mean that the 2021 recovery will not be as pronounced as elsewhere in the world. Nonetheless, the huge uncertainty around these forecasts means that the pandemic may well drive some long-term changes that open new opportunities for investors.”
“Unfortunately, the picture is different in emerging markets, where depreciating currencies and rising bond yields severely limit governments’ policy space. This is one reason a debate has begun whether EM central banks should pursue QE.”
“Accompanying the misery of the coronavirus pandemic has been an ongoing crisis in the oil industry. While the scale and tragedy of the coronavirus is front and center in our minds, the collapse of oil is more abstract, and its long term consequences will be serious.”
“South Africa’s president Cyril Ramaphosa is set to deploy more than 70,000 members of the South African National Defence Force to join 2,300 troops already patrolling the country’s street in a bid to effectively enforce one of the strictest physical lockdowns on the continent. It is one of the largest army deployments in the country’s history.”
“Infections have only just begun to accelerate on the African continent. Zambia, as of 21st April 2020, has recorded 70 confirmed cases and 3 deaths. What makes this pandemic particularly difficult for countries like Zambia are the structural constraints that already exist in their economies.”
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