Africa likely to lose 20 million jobs due to pandemic: AU study

Police remove foreign migrants from the Central Methodist Church in Cape Town, Sourth Africa, Thursday, April 2, 2020. (AP)
Short Url
Updated 06 April 2020

Africa likely to lose 20 million jobs due to pandemic: AU study

JOHANNESBURG: About 20 million jobs are at risk in Africa as the continent’s economies are projected to shrink this year due to the impact of the coronavirus pandemic, according an African Union (AU) study.
So far, Africa accounts for just a fraction of total cases of the disease which has infected more than one million people worldwide, according to a Reuters tally.
But African economies are already facing an impending global economic downturn, plummeting oil and commodity prices and an imploding tourism sector.
Before the onset of the pandemic, continent-wide gross domestic product (GDP) growth had been projected by the African Development Bank to reach 3.4 percent this year.
However, in both scenarios modeled by the AU study — titled “Impact of the coronavirus on the Africa economy” — GDP will now shrink.
Under what the AU researchers deemed their realistic scenario, Africa’s economy will shrink 0.8 percent, while the pessimistic scenario said there would be a 1.1 percent dip.
Up to 15 percent for foreign direct investment could disappear. The impact on employment will be dramatic.
“Nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction on the continent if the situation continues,” the analysis said.
African governments could lose up to 20 to 30 percent of their fiscal revenue, estimated at 500 billion in 2019, it found.
Exports and imports are meanwhile projected to drop at least 35 percent from 2019 levels, incurring a loss in the value of trade of around $270 billion. This at a time when the fight against the virus’ spread will lead to an increase in public spending of at least $130 billion.
Africa’s oil producers, which have seen the value of their crude exports plunge in past weeks, will be among the worst hit.
Sub-Saharan Africa’s biggest oil producers Nigeria and Angola alone could lose $65 billion in income. African oil exporters are expected to see their budget deficits double this year while their economies shrink 3 percent on average.
African tourist destinations will also suffer.

HIGHLIGHTS

• Africa’s economy could shrink up to 1.1 percent this year.

• Trade could fall 35 percent from 2019 levels.

• Oil producers, tourist destinations seen hardest hit by the pandemic.

Africa has in recent years been among the fastest growing regions in the world for tourism. But with borders now closed to prevent the disease’s spread and entire airlines grounded, the sector has been almost entirely shut down.
Countries where tourism constitutes a large part of GDP will see their economies contract by an average of 3.3 percent this year. However, Africa’s major tourism spots Seychelles, Cape Verde, Mauritius and Gambia will shrink at least 7 percent.
“Under the average scenario, the tourism and travel sector in Africa could lose at least $50 billion due to the covid-19 pandemic and at least 2 million direct and indirect jobs,” the AU study said.
Remittances from Africans living abroad — the continent’s largest financial inflow over the past decade — are unlikely to cushion the blow.
“With economic activity in the doldrums in many advanced and emerging market countries, remittances to Africa could experience significant declines,” the analysis found.


Arab News recording exposes Nissan lawyer’s lie on IMF bailout for Lebanon

Updated 01 June 2020

Arab News recording exposes Nissan lawyer’s lie on IMF bailout for Lebanon

LONDON: Arab News has published the recording of an interview with a Nissan lawyer after he denied saying that a bailout of Lebanon by the International Monetary Fund (IMF) was linked to the extradition of fugitive tycoon Carlos Ghosn.

The former Nissan chairman fled to Beirut in December from Japan, where he faced charges of financial wrongdoing.

In a story published in Arab News Japan on Saturday, Sakher El Hachem, Nissan’s legal representative in Lebanon, said the multibillion-dollar IMF bailout was contingent on Ghosn being handed back to Japan. 

The lawyer said IMF support for Lebanon required Japan’s agreement. Lebanese officials had told him: “Japan will assist Lebanon if Ghosn gets extradited,” the lawyer said

“For Japan to agree on that they want the Lebanese authorities to extradite Ghosn, otherwise they won’t provide Lebanon with financial assistance. Japan is one of the IMF’s major contributors … if Japan vetoes Lebanon then the IMF won’t give Lebanon money, except after deporting Ghosn.”

On Sunday, El Hachem denied making the comments. “The only thing I told the newspaper was that there should have been a court hearing on April 30 in Lebanon, but it was postponed because of the pandemic,” he said. In response, Arab News published the recording of the interview, in which he can be clearly heard making the statements attributed to him. 

Japan issued an arrest warrant after Ghosn, 66, escaped house arrest and fled the country.

Now listen to the recording: