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Africa faces Covid-19: economic shock threatens

  • Benin: a company created in a few hours, all online. While President Patrice Talon has made it clear that he will not confine the people of Benin so as not to deprive them of resources, the announcement of this new device while online is timely. Launched by the Investment and Export Promotion Agency, Apiex, mon entreprise.bj is a platform that allows you to register your company online from a smartphone or computer. This crucial decision came at a time when Africa is preparing to experience its peak of infection due to Covid-19.
    For UNCTAD, partner in the realization of this project, this means “that businessmen – in Benin or abroad – can now start a business in two hours and in the comfort and security of the office or the House “. It is now also the only way for entrepreneurs in Benin to formalize their business, while the offer of physical reception is reduced as the number of confirmed cases increases. Thanks to this system: more creations, more establishments and less informal. In Benin, informality is particularly high. In 2009, the national statistics agency estimated that the informal sector represented up to 70% of GDP and 95% of employment. With this new device, each new company automatically complies with commercial, tax and social security obligations and at the same time meets the requirements of the Ministry of Labor. Entrepreneurs also receive all their certificates in digital format. This platform is part of the overall strategy of the government of Benin to set up an intelligent administration that provides innovative services to the private sector and allows businesses to prosper. With this new one-stop shop, Benin obtains a high score on ger.co, an index of countries’ business registration systems, joining an elite group of six countries, including Denmark, Kenya, New Zealand , Oman and Switzerland. “Systems like these, which use online innovation to improve and streamline online administration, are essential in times of crisis,” said Frank Grozel, chief of business facilitation at UNCTAD. “We can see now during the coronavirus pandemic why it is so useful, especially in African countries, to have online systems in place to support the entrepreneurial and commercial environment. Investing, starting and running a business can be difficult in developing country contexts, due to inefficient, opaque and cumbersome administrative procedures that act as a deterrent.

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  • Half of the jobs in Africa threatened by the fallout from the coronavirus. While the African continent feverishly awaits the peak of the pandemic, its impact is already wreaking havoc on the economies with a marked slowdown in production and the circulation of goods, especially raw materials. To limit the spread of the virus and ease the burden on already fragile health systems, governments have acted quickly by imposing complete border closures for at least 31 out of 54 countries, according to the Addis Ababa-based African Center for Disease Control. A reactivity which nevertheless raises the question of the resources on which African States will be able to count to respond to health, economic and social emergencies, while many of them depend on exports of their raw materials. Some landlocked countries are almost asphyxiated and must find alternative routes to deliver the goods. For others, the impact is already too strong and thousands of jobs are threatened. Illustration in Kenya, the leading exporter of flowers to Europe. There, growers destroy about 50 tonnes of fresh flowers every day due to supply chain disruptions. “Kenya destroys around 80% of the 60 tonnes of fresh flowers it normally ships daily to markets such as the United Kingdom, the Netherlands and Germany,” said Kenya Flower Council CEO Clement Tulezi. According to the United Nations Economic Commission for Africa, more than 51% of Africa’s exports go to countries badly affected by the virus, while 53% of its imports come from these same countries.
    An equally bleak outlook for Nigeria. Collapsing demand and oil prices are likely to force companies in Nigeria, Africa’s largest producer and relying on deliveries for about two-thirds of government revenue, to curb production “as soon as possible “, Have already warned experts. The result: if economic activity is almost at a standstill, then around half of jobs across Africa are at risk, warns the Economic Commission for Africa.

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  • The port of Abdijan struck by the coronavirus. While it represents 90% of Côte d’Ivoire’s foreign trade, traffic at the port of Abidjan, the leader in West Africa, is expected to drop in 2020, due to the coronavirus, after having experienced a significant increase. It was the director of the port Hien Sié who announced it on Wednesday. “We feel the impact of this pandemic on the port: China having been closed for a long time, Europe is barricaded. The curfew (from 9 pm to 5 am) has also slowed down the activities of the port, which is used to operating during this time, ”deplored the director to AFP. “In 2019, we exceeded 25 million tonnes for the first time. And we expected 26 million tonnes in 2020, “said Hien Sié. “If the crisis lasts two to three months, we can hope for a recovery in the last semester, but, beyond, the port will take a hit in terms of traffic,” he said. “For the time being, we cannot give figures,” he added, adding that “to date cocoa exports (of which the country is the world’s largest producer) continue.” Economic hub of Côte d’Ivoire, the port of Abidjan, which directly and indirectly employs nearly 100,000 people, also supplies the countries of the sub-region lacking maritime facades (Mali, Niger and Burkina Faso). Prime Minister Amadou Gon Coulibaly announced on Tuesday that economic growth in Côte d’Ivoire is expected to be halved, to 3.6% in 2020, due to the coronavirus epidemic, and that the government has launched a economic and social support plan. China, where the disease started, is, after the European Union, the second trading partner of Côte d’Ivoire, the leading economic power in French-speaking West Africa.

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  • The coronavirus epidemic will plunge growth in Burkina Faso. The country, which is the most affected at this stage by the coronavirus epidemic in West Africa, expects a collapse in its economic growth this year, like its neighbors Côte d’Ivoire and Niger, announced on Thursday its President Roch Kaboré. “The expected consequences of this pandemic on our economy are the reduction in the growth rate from 6.3% to 2% in 2020,” he said in an address to the nation. A poor country landlocked in the Sahel, Burkina Faso has recorded 288 confirmed cases of Covid-19 and 16 deaths since the onset of the pandemic on its soil on March 9. The President also announced “emergency measures in vital sectors”, such as the exemption from taxes on all medical products and equipment used in the fight against the coronavirus. On the economic level, a recovery fund for companies in difficulty amounting to 100 billion CFA francs (150 million euros) has been set up as well as a solidarity fund for the benefit of actors in the informal sector, also said the president of Faso. In addition to the health emergency, Burkina Faso, like its neighbors Mali and Niger, is facing jihadist attacks that have killed more than 800 people and displaced nearly 800,000 since 2015.

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  • African airlines have already lost $ 4 billion. Muhammad al-Bakri, Iata regional vice president for Africa and the Middle East, presented the figures at a virtual press conference on Thursday, April 2. The calculations have been made and it shows that the continent’s airlines suffered losses in the order of four billion dollars due to the Covid-19 pandemic.
    For example, according to IATA, Kenya handled 2.5 million fewer passengers, resulting in a loss of revenue of $ 540 million, resulting in the loss of 137,965 jobs and a contribution of $ 1.1 billion. dollars to the Kenyan economy. Also according to IATA, Ethiopian airlines registered 1.6 million fewer passengers, resulting in a loss of revenue of $ 3 billion, resulting in the loss of 327,062 jobs and a shortfall in $ 1.2 billion to the Ethiopian economy. The plunge took place in South Africa too, with 10.7 million fewer passengers, which resulted in a loss of revenue of $ 2.29 billion, resulting in more than 186,850 jobs in the storm and 3, $ 8 billion less contribution to the South African economy. Muhammad al-Bakri also said that many governments in the region have made commitments to mitigate the effects of Covid-19 on this sector. Some have mentioned tax breaks, such as the deferral of aircraft rental payments by the government of Cape Verde and financial cuts from the governments of Rwanda and Angola, revealed in Bakri. “The airline industry is an economic engine, supporting up to 8.6 million jobs in Africa and the Middle East and $ 186 billion in GDP. Each job created in the aeronautical industry supports 24 other jobs across the economy. Governments must recognize the vital importance of the airline industry and this support is urgent. Airlines are fighting for their survival in all over the world. Travel restrictions and evaporating demand mean that, apart from freight, there are almost no passengers. If governments do not act now, this crisis will be longer and more painful. Airlines have demonstrated their value in economic and social development in Africa and the Middle East and governments must prioritize them in bailouts. “

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  • AfDB mobilizes $ 2 million to fight Covid-19 in Africa. After raising $ 3 billion in borrowing from international financial markets, the African Development Bank announces that it has approved emergency assistance of Ksh 208 million, or about $ 2 million, to the World Bank. health to strengthen its capacity to help African countries contain and mitigate the Covid-19 pandemic. The WHO Africa region is to use these funds to build the capacity of 41 African countries in infection prevention, screening and case management. This aid responds to an international call from WHO. “WHO Africa will also strengthen surveillance systems, purchase and distribute laboratory test kits and reagents, and support coordination mechanisms at the national and regional levels,” said the AfDB. It is estimated that Africa will need several billion dollars to cushion the impact of the disease, as many countries are implementing emergency measures, including business interruption measures, to try to contain.

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