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COVID-19 to cost Africa 3,6 trillion Rands- African Union report

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A report by the African Union (AU) has revealed that the continent could lose around R3.6 trillion in revenue because of the coronavirus pandemic which have affected domestic and international trade between countries..

The report also showed that the continent’s economic growth could fall from 3.4% to 0.9% as a result of this deadly disease that has affected many economies world over. Some countries have closed borders thereby affecting the movement of goods and services.

The report further explained that the loss could cause a disruption of the world’s economy through value chains, result in reduced commodity prices, reduced fiscal revenues and travel restrictions in several African countries.

According to the report, the tourism and travel industries would be hit the hardest by the outbreak, with an estimated loss of about R900 billion ($50 billion).

This has also been confirmed by the International Air Transport Association (IATA), which stated that international bookings in Africa fell by about 20% in March and April. This came after many countries had closed their borders and restricted foreign trips and movements.

The body added that ticket refunds increased by three a quarter percentage that is 75% between 1 February and 11 March, compared to the same period in 2019, due to flight cancellations.

The IATA further pointed out that the continent’s airlines had already registered a loss of R72 billion (US$4.4 billion) as of 11 March, with Ethiopian Airlines registering a loss of R3.4 trillion (US$190 million).

It indicated that the economic contribution of the air transport industry in Africa stands at $55.8 billion dollars, supporting 6.2 million jobs and contributing 2.6% of the Gross Domestic Product (GDP).

At a press conference in Addis Ababa, Ethiopia, the Economic Commission for Africa (ECA), said oil-exporting nations are losing revenue as crude oil prices continue to fall as a result of the pandemic. The Commission went on to estimate that Africa has lost around R1 trillion in revenue since the outbreak of the coronavirus.

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