Absa’s Ridle Markus on the impact of COVID-19 on SSA economies

As South Africa and Nigeria's governments deliberate on easing lockdown restrictions and the reopening of the economy, the Bank of Ghana has left rates unchanged while the South African Reserve Bank is expected to cut rates for the third time this year. Ridle Markus, an Africa strategist at Absa Corporate and Investment Banking, provided insights into the COVID-19 economic ramifications on Sub-Saharan African economies during a CNBC Africa interview. Markus discussed the current economic situation in Ghana, Nigeria, and Zambia, highlighting the challenges these countries are facing amidst the global pandemic. Ghana, once considered a poster child of African economies, has seen a decline in tourist arrivals, retail sales, and economic activity, leading to a contraction in March. While Ghana has started to reopen its economy, Markus predicts a contraction in the second quarter due to ongoing challenges and disruptions. In contrast, Nigeria and Zambia also face inflationary pressures, limiting their scope for policy rate easing. Both countries are exploring alternative measures to support their economies, given the adverse inflation trajectories. Markus emphasized the need for monetary and fiscal authorities in these countries to implement supportive measures to navigate the changing economic landscape and mitigate the impact of COVID-19. Moving forward, Sub-Saharan African economies are expected to face uncertainties and challenges, requiring coordinated efforts to sustain economic stability and growth amidst the ongoing crisis.