Even without a single confirmed case, sub-Saharan Africa may be the region hardest hit outside of Asia by the spread of the coronavirus.
The outbreak has shut down entire swathes of the Chinese economy, threatening world economic growth and curbing appetite for oil and metals that are the lifeline of many African nations.
A slowdown in the No. 2 economy and a 5% drop in oil prices over one year could mean $4 billion in lost export revenue for sub-Saharan Africa, or the equivalent to 0.3% of its gross domestic product — more than any other continent outside of Asia, according to a study by the Overseas Development Institute.
“Many developing countries are increasingly dependent on China for trade, both for imports and exports,” Dirk Willem te Velde, principal research fellow at the institute, said by phone from London.
“If you want to raise the quality of your growth that is more job intensive and more resilient to shocks then you have got to diversity, and when you have a shock like this it makes you realize that.”
The International Monetary Fund slashed its economic growth projectionfor Africa’s top oil exporter, Nigeria, to 2% from 2.5% because of a decline in oil prices. The drop has led to pressure on the naira given crude accounts for 90% of the West African nation’s exports.
Weaker demand from China also puts other resource-dependent economies such as Angola, the Democratic Republic of Congo and Zambia at risk.
Crude prices are down about 11% this year. Copper and iron ore prices have declined 8% and 1.5% respectively this year.