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“Pandemic depression” (a term used by the World Bank) is having terrible effects in Africa. Example with South Africa, the most developed economy on the continent. Already in bad shape before confinement, it sinks a little deeper into the crisis. The consumer sector is hit hard. The country is expected to experience a 7% recession this year.
Consumption is always the first indicator of a country’s state of health. And in South Africa, this sector which weighs 15% of the gross domestic product is very badly. The giants of the distribution are seeing, disappointed, the decline in sales and profits, impacted by the Covid-19 pandemic.
Massmart, the subsidiary of the American Walmart, should see its turnover decline by 42% for the first half. While Pinch N Pay, the country’s second largest supermarket chain, had to part with 1,400 employees. The group anticipates a halving of its profits in the first half of the year. For its part, Shoprite, the retail giant is not doing any better. He announces his withdrawal from Nigeria where business is even worse than in South Africa.
Alcohol distributors also have a dim view of the future. The ban on the sale of alcohol for three months – which has just been lifted – has drowned several projects. Heineken gives up a six billion rand factory and Sab gives up an investment of 5 billion.
Impacted by the coronavirus, the South African economy is looking gloomy. Endemic unemployment and the recession expected at 7% this year do not point to a recovery in consumption in the short term.
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