The coronavirus global health pandemic is catalyzing stark changes throughout the world. Even areas where the total number of cases or deaths from the pathogen are relatively low are experiencing the impact that coronavirus has had on the world. Sub-Saharan Africa is one example of a region that has a low number of confirmed cases but is already feeling the secondary effects of the virus. As of May 11th 2020, Africa as a whole had 63,293 confirmed cases of COVID-19 and 2,290 deaths. In comparison to hard-hit countries like the United States that have 1.37 million confirmed cases and have had over 80,000 deaths, Africa may not seem to be taking a hard hit; however, the virus has had more impact on the region than it may seem from contraction statistics alone. In addition to fears that the virus has spread within sub-Saharan Africa much further than has been reported, the strict measures being taken to prevent the virus’ spread are already having an impact on people’s livelihoods. In this post we will dive into the intricacies of the financial strain the global coronavirus response is having, and will have, on sub-Saharan Africa.
The impact of containment in sub-Saharan Africa
People in sub-Saharan Africa are facing sobering realities in the wake of the coronavirus. For many, the risk of catching COVID-19 is now secondary because the risk of starvation is truly imminent. This is because restrictions on movement intended to curve the spread of coronavirus are inhibiting informal workers from doing their jobs each day.
89.2% of the workforce in SSA is informal, and are not only dependent on their own daily wages earned through the informal sale of goods or services, but also on other informal workers to sell them their necessities like food. As markets close, the supply of food decreases and demand for those food items increases, which causes price gouging. For those already suffering from food insecurity, price increases and limited access to necessities can be a matter of life and death. According to the International Labor Organization, “there are already growing reports on the economic losses faced by workers engaging in certain [informal] occupations due to reduced demand, lack of access to markets, and the loss of mobility of people and goods.”
The people struggling with these problems are in acute danger. One study found that half of the respondents indicated they would not last 14 days of containment, and the respondents from the lowest income brackets reported not being able to survive a week in containment. With this in mind, it is quite clear that intervention is urgently needed, but the governments in these countries are not in strong positions to provide assistance to the people struggling.
An adequate response to the humanitarian issues at hand in sub Saharan Africa will require foreign lending. Seeing as many countries in the world are in similar positions of desperate need, securing foreign assistance will be a feat in itself that will require significant coordination efforts and potentially multiple lending sources. With the lives of so many at stake, the governments of SSA countries must act quickly to save their citizens from not only COVID-19 but the effects containment is having on communities.
Coronavirus’ impact on demand for African exports
Large players in the global economy, like China, the United States, and European nations, are experiencing an economic slowdown due to coronavirus. This economic deceleration is set to exacerbate financial problems for other countries that typically sustain themselves off of exporting goods or commodities. This is because when foreign demand dips for these items, the countries supplying the items have less income and jobs available for the people. The overall impact that such a dip in demand could have on an individual nation is dependent on the level of diversity in the country’s exports as well as the resurgence of the economies the nation relies on most to purchase its exports.
Sub-Saharan Africa contains multiple countries that could be greatly affected by decreased demand. A struggling oil market is experiencing exasperated strain due to coronavirus’s impact on foreign economies’. The sharp decrease in global demand for a lucrative export like oil is linked to coronavirus due to a decline in the production and distribution of goods across the world. This is expected to hurt sub-Saharan oil-producing countries. Nigeria and Angola, for example, pump out 2 million barrels and 1.8 million barrels of oil respectively each day. In fact, despite oil only making up 10 percent of the Nigerian economy, oil sales bring in 70 percent of the Nigerian government’s money. Loss of this income from oil during the coronavirus response, when relief funding is needed more than ever, could have devastating effects.
Beyond the demand for oil, other countries in SSA rely on exporting goods to maintain economic stability. The auto industry in South Africa, agribusiness and apparel in Ethiopia and Kenya, goods manufacturing in Tanzania, and mineral mining in DRC and Zambia are all at risk for slipping demand due to coronavirus. Not only will this impact income and job availability in these nations, but also further lessen the global demand for oil which can have a domino effect on the African oil-producing nations.
More Coronavirus Information from GeoPoll
GeoPoll is committed to serving the global community by providing as much information as possible to the public during this crisis. For this reason, we are currently gathering data on the financial impacts of the coronavirus in sub-Saharan Africa and our team will be releasing a report on our findings in early June.
In the meantime, GeoPoll will be conducting a webinar at the end of May to discuss the results from a separate study where we have been collecting data on a range of topics regarding Coronavirus in sub Saharan Africa an ongoing basis. The report from the first round of data collection was released in late April and can be downloaded for free here.
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