McKinsey&Company, a USA-based management consulting firm, has warned of a severe impact of COVID-19 on many poor households and small informal business in Africa in the coming weeks.
This is unless Governments in the continent, the private sector and development institutions double their efforts to safeguard economies and livelihoods across Africa.
The firm observes that many African countries are still ill-prepared, in the early stages of organizing their responses into focused, prioritized efforts that make the most of the limited time and resources available.
Mckinsey, in its analysis of COVID-19’s economic impact, finds that Africa’s GDP growth in 2020 could be cut by 3–8 percentage points. The pandemic and the oil price shock, says the consulting firm, is likely to tip Africa into an economic contraction in 2020. This in the absence of a major fiscal stimulus.
This report by Kartik Jayaram, Acha Leke, Amandla Ooko-Ombaka and Ying Sunny Sun, says that in many African countries, there is an opportunity to take bolder, more creative steps to secure supply chains of essential products, contain the health crisis, maintain the stability of financial systems, help businesses survive the crisis, and support households’ economic welfare.
There is also need to consider an extensive stimulus package to reverse the economic damage of the crisis.
This report is the first in a series of rapid analyses by McKinsey, intended to provide decision makers with data and tools to strengthen their response to the COVID-19 crisis in Africa.
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