Africa's Pulse, No. 21, Spring 2020 : An Analysis of Issues Shaping Africa’s Economic Future

Abstract

This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

COVID-19 and food security in Sub-Saharan Africa: implications of lockdown during agricultural planting seasons

“…COVID-19 movement restrictions limits social interactions and closure of certain sectors of the economy where farmers could get financial aid. Since the majority of SSA countries are dependent on agriculture, there is a high probability that the region may be threatened by the first serious recession in the region in 25 years, as the economic growth in the region will decline from 2.4% in 2019 to −2.1 to −5.1% in 2020 50 . It has been reported that many households in SSA, especially in rural communities, may be directly impacted by the predicted decline in economic growth, as the supply-side economic shocks such as those caused by the COVID-19 pandemic 51 .…”

An Assessment of the Impact of COVID-19 Responses on MSMEs in the Informal Sector: Evidence from Commonwealth Countries in Africa

“…Responses to address gaps in health and safety will affect both enterprises and workers in the informal sector, directly, but also indirectly, as ill-health or poor sanitation could result in economic losses from closures, absenteeism, as well as affecting consumer demand in the marketplace. Individuals in Africa have relatively high out-of-pocket expenses (Calderon et al 2020). Total health expenditure per capita in stood at US$32 in 2019, which is less than half the levels recommended by the World Health Organization (WHO) for low-income countries (US$86).…”

“…A recent World Bank report (Calderon et al 2020) suggests that the vulnerability of informal firms to the demand effects can be assessed by estimating the share of businesses that are more affected. The share of jobs that can be done from home in Commonwealth African countries ( Figure 3) ranges from 18 to 25 per cent (Dingel and Neiman 2020), close to the world average, suggesting that some African economies may be able to continue to work during periods of stringent social distancing.…”

Inflation Threshold Levels and Economic Growth in the Franc Zone Countries

“…In fact, the COVID-19 crisis is expected to heavily affect African countries while the latter do not have enough fiscal space to launch major economic stimulus programs. Countries depending on mining and oil exports are expected to experience huge falls in growth that could be below 7 percentage points for oil-exporting countries, and below 8 percentage points for metal-exporting countries (Calderon et al, 2020). The potential losses in already low tax revenues due to the disruption of economic activities, the collapse in commodity revenues, and the increase in public health spending are expected to weaken fiscal positions in several Franc zone countries; resulting thus in limited room to fund economic stimulus plans (AU, 2020; World Bank, 2020a; World Bank, 2020b).…”