COVID-19: Will new variant hamper Africa's recovery?

The discovery of a new COVID-19 variant, B.1.1.529, in South Africa and Botswana has raised concerns about the potential impact on the region's economic recovery. Oluseye Olusoga, CEO of Parthian Partners, shared his insights on the implications of this development during a recent interview on CNBC Africa. The emergence of this new variant has cast a shadow of uncertainty over the projected 3.8% economic growth in 2022 for Sub-Saharan Africa. Olusoga highlighted the significant challenges that this variant poses to the region's economic stability and growth prospects. The global reaction to the discovery of the variant has already been swift, with countries like the UK adding southern African nations to their travel red list, leading to a slowdown in economic activity as businesses grapple with uncertainty. The looming threat of potential lockdowns and rising inflation further complicates the economic outlook for countries in the region. The limited options available to authorities in the face of economic slowdowns and revenue challenges point towards increased borrowing and heightened financial stress. Olusoga emphasized the risk of widening disparities between developed and developing nations, which could exacerbate existing economic challenges. The potential for political instability resulting from economic downturns is also a pressing concern. The impact on government revenues, exchange rates, and inflation could further strain already vulnerable economies like Nigeria. The discrepancy between official data and real-world price increases suggests a precarious economic environment that may require tough policy decisions and sacrifices from the population. Despite the uncertainties and challenges ahead, Olusoga expressed confidence in the resilience of countries like Nigeria to navigate through these turbulent times and emerge stronger. However, he cautioned that the road ahead would likely be paved with difficulties and urged citizens to brace themselves for more economic hardship in the near future.