THE LIKELY IMPACT OF COVID-19 ON THE EXTRACTIVE INDUSTRIES AND ITS GOVERNANCE IMPLICATIONS

The document examines how COVID-19 disrupted African extractive industries through reduced global demand, supply chain failures, and operational shutdowns. It highlights the vulnerability of oil-dependent economies like Nigeria and the specific challenges facing South Africa's mining sector. Conversely, it identifies a 'silver lining' in the increased demand for gold due to its role in rapid antibody tests. The report argues that the crisis provides a governance opportunity for African nations to diversify their economies, reduce reliance on Chinese demand, and implement structural reforms to protect property rights and broaden tax bases.

• The pandemic created a 'perfect storm' for African economies due to the combination of depressed global oil prices, decreased demand for natural resources from China, and lockdown measures.
• Nigeria is particularly vulnerable due to its heavy reliance on oil, which provides over 50% of government revenue and 94% of foreign exchange revenue, making the economy susceptible to low oil prices.
• In South Africa, the mining industry faced significant disruptions, including the temporary closure of the Mponeng Mine—the world's deepest gold mine—after 164 employees tested positive for COVID-19.
• Gold presents a unique opportunity for revenue growth because it is an essential component in lateral flow assay (LFA) rapid antibody tests, which are in high demand for scaling up COVID-19 testing.
• The crisis exposes the risks of over-reliance on Chinese consumption of raw materials, noting that trade between China and Africa grew by only 2.2% in 2019 compared to 20% the previous year.
• The report suggests that depressed oil prices could provide a governance incentive for African countries to move away from oil rents and implement structural transformations, such as those promoted by the Africa Mining Vision.
• Mining companies have provided critical support to national healthcare systems, including AngloGold Ashanti donating R20m to the Solidarity Response Fund and Barrick Gold Corporation implementing a $1.5 million support programme in the DRC.

APA

Good Governance Africa (2020). THE LIKELY IMPACT OF COVID-19 ON THE EXTRACTIVE INDUSTRIES AND ITS GOVERNANCE IMPLICATIONS. https://digitalmallblobstorage.blob.core.windows.net/wp-content/2020/05/FINAL-GGA-COVID-RESOURCES-RESPONSE.pdf

Chicago

Good Governance Africa. THE LIKELY IMPACT OF COVID-19 ON THE EXTRACTIVE INDUSTRIES AND ITS GOVERNANCE IMPLICATIONS. 2020. https://digitalmallblobstorage.blob.core.windows.net/wp-content/2020/05/FINAL-GGA-COVID-RESOURCES-RESPONSE.pdf.

Wikipedia

{{cite report |author=Good Governance Africa |title=THE LIKELY IMPACT OF COVID-19 ON THE EXTRACTIVE INDUSTRIES AND ITS GOVERNANCE IMPLICATIONS |date=May 2020 |url=https://digitalmallblobstorage.blob.core.windows.net/wp-content/2020/05/FINAL-GGA-COVID-RESOURCES-RESPONSE.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{goodgovernanceafrica2020likely, author = {{Good Governance Africa}}, title = {{THE LIKELY IMPACT OF COVID-19 ON THE EXTRACTIVE INDUSTRIES AND ITS GOVERNANCE IMPLICATIONS}}, institution = {Good Governance Africa}, year = {2020}, month = may, url = {https://digitalmallblobstorage.blob.core.windows.net/wp-content/2020/05/FINAL-GGA-COVID-RESOURCES-RESPONSE.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }