The impact of COVID-19 on East African Economies

The Coronavirus (COVID-19) pandemic is currently causing significant adverse impact on the global economy with governments around the world implementing various fiscal measures to mitigate its effects and provide relief for businesses and households. Within Africa, the impacts of COVID-19 are being felt in different ways and the measures taken by the respective governments have also differed on the areas of focus and comprehensiveness.

Africa’s projected GDP growth of 3.2% for 2020 is now expected to fall to -0.8%. This is due to the enforced partial or total lockdown of economies brought on by the pandemic. The outbreak has led to disruption in the various sectors, most notably the financial industry and the tourism and hospitality sectors.

Our report analyses some of the impacts for the East African region with a view on the effects on the general economy, as well as sectoral views touching on industries such as aviation, tourism agriculture, and manufacturing.

In Kenya, projected GDP growth in 2020 now stands at 1% from 5.7% due to the gravity of the pandemic; with the economy seeing a decline in tourism activity, export revenues, and a disruption in the supply chain. In Ethiopia, the country is expected to grapple with high unemployment, and GDP growth has been revised to 3.2% from 6.2% in 2020. Similarly, the outlooks in Tanzania and Uganda show a similar trend with GDP growth being revised to 2% and 3.5% respectively (decline in 3.3% and 1.8% percentage points). Tanzania is showing waning demand for mineral exports considering global supply chain interruptions. The economy in Uganda is also faced with the disruption of supply chains and weakened global demand for goods.

In addition to economic outlooks, the publication looks at how governments in each country across the region have responded to the pandemic through social and health-related measures and the fiscal and monetary interventions introduced to safeguard the economy.

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