Although most of the attention in Africa about the coronavirus is appropriately focused on what can be done to prevent the virus from spreading, there are growing concerns over the potential economic impact across the continent — particularly since China is the largest trading partner for the vast majority of African countries and increasingly one of its largest sources of foreign direct investment.

Why Oil and Tourism?

• OIL: The coronavirus outbreak is weighing on oil prices as traders worry that the outbreak will adversely impact Chinese economic growth and thus reduce demand oil. At the close on Friday, oil prices fell to their lowest levels since last July and it’s likely that tumble will continue this week as the crisis shows no signs of abating. Angola, Nigeria, and South Sudan are among the African countries most exposed to the effects of reduced Chinese demand for oil. (MARKETS INSIDER)

• TOURISM: As part of its efforts to stop the spread of the coronavirus, the Chinese government ordered all group international travel be halted as of today. This could have a potentially significant impact in Kenya, Uganda and, South Africa who all three have stepped up their efforts to attract more Chinese tourists.
  • South Africa, more than any other African country, has the most at stake after signing a large, and likely very expensive, marketing deal last year with Chinese internet giant Tencent to promote SA tourism. 
  • While Chinese tour groups are indeed an important segment in the African travel sector, particularly on safari tours, it’s important to note that the new Chinese policy does not stop all visitor travel. Here are three things to know about the impact of this new policy:
    1. The ban is not on all outbound travel: individual travelers are not impacted.
    2. Group travel is becoming less important anyway: although Chinese tourists have long preferred groups, that is starting to change now, particularly among younger travelers.
    3. Business travel remains unaffected: the new policy focuses only on leisure travel and does not appear intended to impact business travel.

Read more about the new Chinese group travel restrictions on the Forbes website.