The Economic Commission for Africa (ECA), launched virtually a new report on the 17th of April titled, COVID-19: Protecting African Lives and Economieson. The report highlights the following:
People: Anywhere between 300,000 and 3.3 million African people could lose their lives as a direct result of COVID-19, depending on the intervention measures taken to stop the spread.
Africa is particularly susceptible because 56 percent of the urban population is concentrated in overcrowded and poorly serviced slum dwellings (excluding North Africa) and only 34 percent of the households have access to basic handwashing facilities. In all, 71 percent of Africa’s workforce is informally employed, and most of those cannot work from home. Close to 40 percent of children under 5 years of age in Africa are undernourished. Of all the continents Africa has the highest prevalence of certain underlying conditions, like tuberculosis and HIV/AIDS. With lower ratios of hospital beds and health professionals to its population than other regions, high dependency on imports for its medicinal and pharmaceutical products, weak legal identity systems for direct benefit transfers, and weak economies that are unable to sustain health and lockdown costs, the continent is vulnerable.
Prosperity: The impact on African economies could be the slowing of growth to 1.8 percent in the best-case scenario or a contraction of 2.6 percent in the worst case. This has the potential to push 27 million people into extreme poverty.
Even if the spread of COVID-19 is suppressed in Africa its economic damage will be unavoidable. The price of oil, which accounts for 40 per cent of Africa’s exports, has halved, and major African exports such as textiles and fresh-cut flowers have crashed. Tourism – which accounts for up to 38 per cent of the gross domestic product (GDP) of some African countries – has effectively halted, as has the airline industry that supports it. Collapsed businesses may never recover. Without a rapid response, Governments risk losing control and facing unrest. To protect and build towards our shared prosperity at least $100 billion is needed to immediately resource a health and social safety net response. Another $100 billion is critical for economic emergency stimulus, including a debt standstill, the financing of a special purpose vehicle for commercial debt obligations, and provision of extra liquidity for the private sector.
Partnerships: African economies are interconnected: our response must bring us together as one. The development finance institutions must at this time play an unprecedented counter-cyclical role to protect the private sector and save jobs.
We must keep trade flowing, particularly in essential medical supplies and staple foods, by fighting the urge to impose export bans. Intellectual property on medical supplies, novel testing kits and vaccines must be shared to help the continent’s private sector take its part in our response. The level of assistance that is required is unprecedented. Innovative financing facilities are needed, including a complete temporary debt standstill, enhanced access to emergency funding facilities, and the provision of liquidity lines to the private sector in Africa. We must “build back better”, by ensuring that there is an abiding climate consciousness in the rebuilding and by leveraging the digital economy. And we must be firm and clear on good governance to safeguard African health systems, ensure proper use of emergency funds, hold African businesses from collapse and reduce worker lay-offs.
Note:
The COVID-19: Protecting African Lives and Economies Report is the culmination of in-depth analyses presented to African Ministers of Finance in two virtual meetings, as well as extensive consultations with key representatives from civil society, international finance institutions and the private sector. These presentations, as well as important key messages to the international community are at the disposal of the media and can be found here.