Omicron’s emergence may hurt African economies

Outlook

The advent of the Omicron COVID-19 variant has brought with it a flurry of travel restrictions targeting African nations, as well as a spike in announcements of new, expanded or accelerated vaccination booster campaigns in advanced economies.

Both have potential to undercut recoveries across Sub-Saharan Africa, where the economic impacts of the pandemic have so far been worse than the health impacts. Extended pandemic-related restrictions are a real risk, especially if already struggling vaccination campaigns are slowed further by renewed vaccine demands in the developed world. This could shave around 1.6% off the continental growth forecast by end-2023.

In contrast, improved vaccine supplies and faster-than-expected easing of restrictions could boost growth by 1.5% in 2022 and another 1.6% in 2023.

Impacts

• The detection of Omicron in Africa may elevate fears that low continental vaccination rates could allow more new variants to emerge.
• An overly rapid or disorderly vaccine supply glut could overwhelm capacities to deliver inoculation programmes.
• African tourism sectors will be especially vulnerable to new shocks and ongoing risks from negative perceptions of low vaccination rates.
• Major disruptions to education may exacerbate the negative medium-to-long-term socio-economic impacts of the pandemic.