COVID-19: a massive bill for Africa
As elsewhere in the world, the health crisis has badly hit the tourism industry in Africa. A key sector of the continental economy that is anxiously awaiting the first signs of recovery.
The latest World Tourism Organization (UNWTO) annual barometer, published at end January, confirmed what all the industry stakeholders already knew: with cumulative losses estimated at 1.3 trillion dollars, due to travel restrictions caused by the COVID-19 pandemic, “2020 will have been the worst year in the history of tourism.
A historic lost season, which mechanically affected the main African destinations. The UNWTO barometer estimates that, as a whole, the continent lost 70% of arrivals in 2020; a decline in line with those observed in Europe and the Americas (-69%). However, taken individually, national figures have sometimes been much worse, with collapses ranging from -78% in Morocco to -90% in South Africa and -91% in Egypt over various periods of the year.
In July 2020, the African Union estimated the loss of revenue from travel and tourism on the continent at nearly 55 billion dollars, while at the same time, the International Monetary Fund predicted an annual decline of 12% in the real GDP of African economies dependent on tourism… In fact, the pandemic has completely halted a positive dynamic, since many African economies had previously enjoyed a steady annual increase of 3 to 5% per year in international traveler arrivals.
“Some airlines may not survive COVID-19”
Therefore, it comes as no surprise that the aviation industry has been particularly affected by the crisis. The AU is even concerned that some “airlines may not survive COVID-19”, as the lack of available vaccines on the continent suggests that COVID will be “long”, in other words, a crisis that will last for some time. To cope with the looming race against time, the African aviation industry called in a paper to international financial entities last March for $10 billion in emergency aid. The document calls for a series of financial measures such as “deferral of existing financial obligations, or loan repayments”. It remains to be seen whether this call for help will be heard.
Africa’s debt expected to grow by 10 to 15 percentage points
In the meantime, all financial institutions anticipate an increase in the insolvency risks of the most vulnerable countries. Concerned about the expected increase in African debt – which is expected to grow by 10 to 15 percentage points in 2021 – the African Development Bank (AfDB) 2021 edition of the African Economic Outlook considers that the main contributors [to this increase in debt] “will be tourism-dependent economies and other resource-intensive economies other than oil. In Tunisia, for example, tourism revenues fell by 64% in 2020, causing public debt to rise alarmingly to over 87% of GDP, according to the IMF.
Up to 2 million direct and indirect jobs in tourism at risk on the continent
On a broader social level, the impact of the pandemic on the African tourism industry – a sector that employs 24.6 million people and generated $169 billion in revenue in 2019 – have been disastrous. The UN estimates that the coronavirus pandemic has cost “up to 2 million direct and indirect jobs” in the African tourism industry. And without emergency funding, the crisis could cause “a collapse” of the sector, several international organizations have already warned.
Given this extreme situation, the recovery looks arduous. The above-mentioned UNWTO barometer estimates that it will take “at least 10 months” for the global tourism industry to recover from the effects of the coronavirus and “a little longer” for Africa, which will have to thoroughly renew its offer (local tourism, digital offers…) to bounce back sustainably.
“Recovery will begin in earnest in 2022“
In the short term at least, Mossadeck Bally, founder and CEO of the Azalaï hotel group, says he still fears “a very difficult year in 2021”. The Malian entrepreneur, who has three decades of experience in the pan-African hotel industry behind him, is adamant that “the recovery will really begin only in 2022. »
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