Ethiopia- Africa- Economy

COVID-19 push about 55m Africans into extreme poverty in 2020

APA-Addis Ababa (Ethiopia)

The disruptions caused by the COVID-19 pandemic pushed an estimated 55 million Africans into extreme poverty in 2020 and reversed more than two decades of progress in poverty reduction on the continent, UN Economic Commission for Africa (ECA) said on Saturday in a report.

The report, titled “Addressing Poverty and Vulnerability in Africa during the COVID-19 Pandemic”, says the pandemic has caused job losses, reduced income and further limited the ability of households to manage risks.

“Non-poor people whose consumption is $1.90–$2.09 a day are likely to fall into poverty due to the pandemic because even a small amount of consumption volatility can push them into poverty,” the report says.

It estimates 12.6% more people are likely to be pushed into poverty in one year alone, more than the combined total of the additional poor since 1999.

Furthermore, poor households move into and out of poverty because of exogenous shocks like the COVID-19 pandemic and that their inability to manage uninsured risks only increases their vulnerability.

So, achieving sustained poverty reduction requires thoroughly understanding the nexus of poverty, risks and vulnerability, the report claims.

“Under current projections, the pandemic is likely to increase the number of people living in extreme poverty, in Africa and globally,” forecasts the report.

Impact varies

The authors say the poverty effects of the COVID-19 pandemic “vary with government responses and policies.

Countries with low initial poverty and vulnerability, capacity to generate enough jobs, low youth and old-age dependency ratios, a highly educated labor force and good internet infrastructure to support a digital economy are likely to experience low vulnerability

“The opposite is true for countries without these critical attributes and that can seldom afford social assistance—such as Ethiopia and Nigeria,” the report claims.

This group is the source of most of the “new poor” created by the pandemic, it says.

New dimension

Hanan Morsy, ECA’s Deputy Executive Secretary said the report analyzes the implication of COVID-19 in terms of poverty, but brings a new dimension stressing the vulnerability in Africa.

It also conveys the element of people centric analysis of what has been happening during COVID-19 and what we need to do to ensure that the vulnerable population are protected in terms of social safety net and putting up the right policies, according to Morsy.

“The most critical implication of COVID-19 has been the reversal of the very hard-won gains that the continent had managed to achieve in reducing poverty,” he added.

The report calls for an urgent need to explore innovative and affordable market-led insurance schemes which can insure the poor from future shocks.

“Collaboration of governments with the private sector is paramount,” it stresses.

The report sees the African Continental Free Trade Area (AfCFTA) as an opportunity to build forward. Most African countries depend on raw materials exports and on imports of essential goods such as food items and pharmaceuticals.

“If AfCFTA is effectively implemented, intra-Africa trade is expected to be about 35% higher than without the grouping by 2045,” says the report

“The AfCFTA would help Africa industrialize and diversify, reducing trade dependence on external partners and boosting the share of intra-Africa trade from roughly 15% today to over 26%,” the report projects


MG/abj/APA

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