The financial rating agency Fitch Ratings said a few days ago that the increase in covid-19 infections in Africa undermines the analysis of the continent from a sovereign credit quality point of view until at least 2022.
"A new wave of covid-19 infections in several African countries, exacerbated by the Delta variant, has increased the risk of economic setbacks to credit quality analysis in Africa, and slow progress in vaccine distribution will persist until at least 2022," reads an analysis by Fitch Ratings.
In the commentary on the impact of the pandemic in African countries, sent to clients and to which Lusa had access, the analysts of this rating agency owned by the same owners of the consultancy Fitch Solutions write that "the continent's governments should continue to avoid imposing widespread confinement, but containment measures, such as the closure of bars and restaurants that has existed in South Africa since June 28, may occur in several countries.
The ability to impose tougher restrictions "is weak in the region and restrictions are unpopular," the analysts point out, noting that structural factors such as low levels of technological penetration or formal employment impede the adoption of measures such as telecommuting or the use of digital commerce.
The World Health Organization's director for Africa said Thursday that the African continent had "the worst week since the pandemic began," with a 20% rise in cases, and warned that the situation will get worse.
In a press conference, Matshidiso Moeti warned that in the last seven days up to July 4, the number of cases on the African continent rose 20% and considered that due to the spread of the Delta variant, the situation is likely to worsen, with 16 countries where the virus is gaining ground.
"We had 251,000 new cases, an increase of 20% from the previous week and 12% from the January peak," Moeti said, stressing that "new cases increased for the seventh week in a row and are doubling every 18 days."
On financing the economies, Fitch Ratings says that "the pandemic continues to pose downside risks to the region's ratings," but points out that, on the other hand, "the effects make external financing from bilateral or multilateral sources easier."
The commentary, issued at the same time that the International Monetary Fund (IMF) approved the issuance of $650 billion in Special Drawing Rights (SDRs), also points out that the recessionary effects of falling oil prices and lower demand from important trading partners, such as China, have faded.
"More recently, rising commodity prices have proved positive for the external position of commodity-exporting countries," they point out, using the example of Angola to stress that "the risk associated with government revenues is likely to outweigh the budgetary impact of new covid-19 infections this year."