May 15, 2020/United Capital

So far, the outbreak of the COVID-19 disease and measures put in place to curb its spread, have left a negative imprint on the economic activities of Sub Saharan African economies (SSA). Notably, the continent’s manufacturing sector, which is still fairly underdeveloped, has been severely affected by weaker global consumer demand, disrupted supply chains and slower trade activities.

Analyzing the statistics for Purchasing Managers’ Indices for Apr-2020, the African Manufacturing sector took a thorough beating, sliding below 50pts which indicates a contraction. This was driven by sharp contractions in South Africa’s PMI which came in at 46.1pts (vs 48.1 pts in Mar-2020), Egypt at 29.7pts (vs 44.2 pts in Mar-2020), Kenya at 34.8 (vs 37.3 pts in Mar-2020), Nigeria at 37.1pts (vs 53.8 pts in Mar-2020) and Ghana at 31.7pts (vs 41.4 pts in Mar-2020).

Given the manufacturing sector’s sizable contribution to Sub-Saharan Africa’s GDP (estimated at 11.0%), and the potential for it to generate employment, intervention funds and fiscal palliatives to cushion the effect of COVID-19 have been deployed in many countries across the region. Also, Nigeria, Ghana and Egypt have begun reopening their economies gradually. In all, the complete revival of the sector remains hinged on a rebound in the global economy vis-a-vis a considerable level of containment of the coronavirus outbreak.

Top African Stories 

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• Uganda plans to open power transmission to private investment: Uganda is preparing to open up to private investors the transmission business of its electricity sector that officials say needs billions of dollars in fresh capital. Read more  

• Algeria’s electricity consumption drops by 10% due to COVID 19 health crisis: In Algeria, electricity demand has dropped by 10% due to the health crisis caused by the coronavirus pandemic. This statement was made by Chahar Boulakhras, the Chairman and CEO of Sonelgaz, the national electric company. Read more

• Kenyan oil marketers seek hedge to shelter from low prices: Kenya’s oil marketing companies asked the government to help them hedge against falling prices ahead of the regulator’s monthly review of retail rates. Read more

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