African Economies: Sticking to the guns of re-opening

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Due to the COVID-19 pandemic, countries around the world implemented lockdowns and restrictions, to contain the spread. African countries were no different, as incumbent government authorities applied similar measures.

However, given the continent’s large informal sector that depends on daily income, the huge costs to the government by rolling out social welfare programs, and the destruction to business operations, the continent can no longer afford a lockdown.

As a result, despite low testing, weak healthcare systems and exponential growth in COVID-19 cases, African countries are getting set to reopen.

Notably, the three most infected countries, South Africa, Egypt, and Nigeria have launched multi-tiered lockdown easing plans. These plans include the gradual unlocking of large cities, reopening manufacturing, financial and other business services, as well as laying guidelines on the opening of religious and other public centres.

Also, Ghana, which to an extent has been able to ramp up testing, has set June 5th 2020, as the date to reopen religious centres and schools, with classes to contain a maximum of 25 people.

On the other hand, Kenya is yet to announce details of re-opening, but policymakers are sending positive signals. Overall, borders remain closed across the continent.

While the gradual reopening is positive for growth, the risk of a rapid and widespread infection remains at large. In all, finding a balancing act between preventing a more devastating outbreak and protecting the economy remains critical.

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United Capital Research