THE IMPACT of Covid-19 on Africa’s energy sector
On the basis of the UNECA macroeconomic model, and taking into account predictions about
the extent of demand and supply shocks, two scenarios are analysed: best-case and worst-case
scenarios. As a result, GDP growth rate for 2020 is expected to decline from 3.2% to 1.8% under bestcase
scenario; however, if the level of shock is heightened, the worst-case scenario forecast will be a
GDP contraction of 1.4 to 2.5% (UNECA, 2020). This slower growth has major implications to poverty
reduction and employment growth in the continent. Based on the growth forecast, UNECA estimates
that between 5 million – 29 million people could fall back to extreme poverty for a period of time from
the reference 2020 African forecasted growth scenario. While majority of those who fall into poverty
are expected to be transient, a small percentage are expected to stay in extreme poverty for longer
than a decade.
In terms of employment, the International Labor Organization (ILO) forecasts that Africa will face
19 million job losses largely due to closures (ILO, 2020). Countries have already faced pressure
related to stringent lockdown measures and unintended consequences to livelihoods, including loss
of employment and income, particularly for those in the informal economy. ILO statistics indicate
that the share of employment in the informal sector from total non-agricultural employment is above
70% in Cote d’Ivoire, Cameroon, Comoros, Ghana, Madagascar, Mali, Mozambique, Mauritania, Niger,
Senegal, Togo, Tanzania and Uganda. For Africa, the share is 71.9%. As a result, lockdowns and
resultant economic disruptions is having negative employment impacts mainly in the informal sector.