An estimated 49 million Africans could be pushed into extreme poverty, with about 30 million jobs at the verge of disappearing as a result of the economic fallout of the COVID-19 pandemic.
This was part of the submission of Hanan Morsy, Director of the Macroeconomic Policy, Forecasting and Research Department at the African Development Bank [AfDB].
Speaking at the launch of AfDB’s African Economic Outlook 2020 Supplement, Morsy said the African Economic Outlook 2020 Supplement shows that for the first time in the last half-century, Africa would be facing an economic recession as a fallout of the COVID-19 pandemic.
“This would affect the gains achieved in poverty reduction as an estimated 49 million Africans could be pushed into poverty, with about 30 million jobs at the verge of disappearing. Policymakers need to act fast to alleviate the impact of the crisis on vulnerable groups through well targeted social safety net measures.”
The number of people in extreme poverty in Africa (using the $1.90 international poverty line) could reach 453.4 million in 2020 as a result of the pandemic, compared to 425.2 million under the no-outbreak scenario.
The spread of the virus in Africa depends largely on the preparedness of countries to separate and treat infected patients, the supplement stated, noting that only 21 out of 54 African countries are clinically prepared to deal with epidemics.
Executive Director of the African Economic Research Consortium and Former Governor of the Central Bank of Kenya, Njuguna Ndung’u described the African Economic Outlook 2020 supplement as “a very important and useful policy tool for African countries who actually need it at this time.”
“It will be useful now and in the future. It gives us important short, medium- and long-term strategies,” he added, stressing crises like COVID-19 present a good opportunity for innovative reforms in countries.
The supplement noted that the curve of the pandemic in Africa was flattening gradually. However, COVID-19 remains a serious threat to lives and livelihoods, given weak healthcare systems and limited social protection.
Under projected scenarios for contraction of growth, Africa could lose between $145.5 billion and $189.7 billion of GDP in 2020, according to the publication.
The report called for urgent policy interventions to mitigate the impact of the pandemic: “Across Africa, the response must be well-sequenced and multipronged, involving a public health response to contain the spread of the virus and minimise fatalities, a monetary policy response to ease liquidity constraints and solvency risks, and a fiscal response to cushion the economic impacts of the pandemic on livelihoods and to assist businesses.”
Other proposed interventions included labour market policies to protect workers and their jobs, and structural policies to enable African economies to rebuild and enhance their resilience to future shocks.
The supplement warned that the tourism, transportation, and entertainment sectors may take longer to recover. Between 2017 and 2018, African travel and tourism grew by 5.6%, compared with the global average of 3.9%.
Confirmed cases of COVID-19 in 54 African countries stood at 304,642, with 8,087 reported deaths as of 22 June 2020. According to the supplement, reported figures were likely to be higher in reality because of limited testing capabilities in most countries.