By News Desk
The United Nations has disclosed that Nigeria, South Africa and other African countries need $200 billion to respond actively to coronavirus, urging creditors to grant a debt standstill for all developing countries.
The global agency stressed that the grant was not just for the poorest but for many countries currently battling with debt distress due to global recession triggered by the coronavirus pandemic.
UN Secretary-General, Antonio Guterres, who made the appeal on Friday, told a virtual conference on Africa hosted by the World Bank and International Monetary Fund (IMF) that the continent needed more than $200 billion to respond to the pandemic and mitigate its economic impact.
To mobilize more resources, he said the IMF should allocate new Special Drawing Rights (SDRs), a step that has been opposed by the United States citing impact on the world economy.
An SDR allocation is a directives issued to Central Bank of countries to mint and print new currency notes and send it into circulation to ease the pain caused by the pandemic.
Earlier, the U.N. Economic Commission for Africa (UNECA) had said that the continent may record at least 300,000 deaths from the COVID-19.
UNECA added that the virus could also push 29 million citizens of the over 50 nations into extreme poverty, calling for a $100 billion safety net for the continent.
Africa’s 54 countries have so far reported fewer than 20,000 confirmed cases of the disease, just a fraction of the more than two million cases reported globally. But the World Health Organization warned on Thursday that Africa could see as many as 10 million cases in three to six months.
“To protect and build towards our shared prosperity at least $100 billion is needed to immediately resource a health and social safety net response,” the UNECA in a report released on Friday.
UNECA is also backing a call by African finance ministers for an additional $100 billion in stimulus, which would include a halt to all external debt service.
The agency modeled four scenarios based on the level of preventive measures introduced by African governments.
In the total absence of such interventions, the study calculated over 1.2 billion Africans would be infected and 3.3 million would die this year. Africa has a total population of around 1.3 billion.
Most of Africa, however, has already mandated social distancing measures, ranging from curfews and travel guidelines in some countries to full lockdown in others.
Yet even its best-case scenario, where governments introduce intense social distancing once a threshold of 0.2 deaths per 100,000 people per week is reached, Africa would see 122.8 million infections, 2.3 million hospitalizations and 300,000 deaths.
Combating the disease will be complicated by the fact that 36 percent of Africans have no access to household washing facilities, and the continent counts just 1.8 hospital beds per 1,000 people. France, in comparison, has 5.98 beds per 1,000 people.
Africa’s young demographic – nearly 60 percent of the population is below the age of 25 – should help stave off the disease. On the other hand, 56 per cent of the urban population is concentrated in overcrowded slums and many people are also vulnerable due to HIV/AIDS, tuberculosis and malnutrition.
Africa imports 94 percent of its pharmaceuticals, the report said, noting that at least 71 countries have banned or limited exports of certain supplies deemed essential to fight the disease.
“In a best-case scenario … $44 billion would be required for testing, personal protective equipment, and to treat all those requiring hospitalisation,” it stated.
However, that is money Africa does not have as the crisis could also shrink the continent’s economy by up to 2.6 percent.
“We estimate that between 5 million and 29 million people will be pushed below the extreme poverty line of $1.90 per day owing to the impact of COVID-19,” the report said.
Nigeria alone will lose between $14 billion and $19.2 billion in revenues from oil exports this year. And the prices of other African commodities exports have plummeted as well.
Lockdowns in Europe and the United States also imperil Africa’s $15 billion in annual textile and apparel exports as well as tourism, which accounts for 8.5 percent of Africa’s GDP.