As a follow up to GeoPoll’s earlier reports on the impact of the coronavirus pandemic in sub-Saharan Africa, we conducted the GeoPoll Year-End survey evaluating the year that has been and the outlook for the coming year.

The Economic Impact of COVID-19 in Sub-Saharan Africa

When asked about the coronavirus pandemic’s biggest challenges, finances stood out as the overwhelming challenge (55%), with ‘staying home’ trailing at 23% as the second biggest challenge. This finding could be tied directly to findings surrounding income changes since June, as 79% stated that their income had decreased since June. This percentage is even higher than the 76% who reported income decreases in our previous study. In addition, 65% state that they are more concerned with paying their expenses now than in June 2020, when 71% were already more concerned with paying expenses than pre-COVID.

These findings demonstrate that even though restrictions have been loosened in all six countries studied, the pandemic’s economic impacts continue to be felt and, for many, have worsened over time. While all countries reported high levels of income decrease, Kenya had the highest percentage of respondents who said their income had decreased a lot compared to June 2020, at 64%.

Even though restrictions have been loosened in all six countries studied, the economic impacts of the pandemic continue to be felt and for many have worsened over time – GeoPoll

Changes to Consumer Habits Due to COVID-19

Given the decreases in income observed, it is not surprising that we also observe changes in spending patterns, with consumers focusing more on essential items than non-essentials. In addition, one of the effects of the pandemic has been a scarcity of products due to disruptions in supply chains, which has resulted in rising prices of various commodities. These factors could be some of the reasons most respondents (60%) in the GeoPoll study reported spending more this year compared to last year on essential items such as food, while just 23% are spending less.

The report also shows a large shift away from non-essentials, with 59% saying they are spending less on clothes and beauty products than last year.

In contrast with several other countries where online shopping has increased during the pandemic, it has dropped in Sub-Saharan Africa. Nearly 60% report that they are shopping online less frequently than last year, which could be related to the overall decrease in purchasing of non-essential items. Compared to the previous year, 45% report they are using mobile money less frequently on mobile money usage, while 21% say they are using mobile money at about the same rates and 35% are using it more regularly.

It must be noted that, as with other findings in this summary, some of the considerations vary from country to country. For example, while online shopping decreased overall, more respondents in Kenya and South Africa reported shopping online more frequently, and over half (51%) of those in Kenya said that they are using mobile money more than the previous year, while 42% in Mozambique reported increasing their mobile money usage.

To see the statistics breakdown for each country and demographic, refer to this interactive report.

2020 Holiday Spending

Consumer spending is also experiencing changes; as the holiday season approaches, McKinsey’s study in South Africa found ongoing reductions in discretionary spending and that 88% of households expect to spend the same or less on the holidays as they did last year.

The 2020 holiday season is expected to be impacted by COVID-19, both socially and economically. Countries like Kenya have restrictions on night movement, meeting numbers, and hospitality business operations in place and studies have found that those in South Africa and other countries are planning to spend less on the holidays this year than in the past. GeoPoll’s research found similar results, with 40% overall stating that they will spend much less than last year, and 28% stating they will spend a bit less. Just under a quarter of respondents report they will spend more on the holidays this year, indicating that retailers should expect a decrease in holiday spending in 2020.

Economic Predictions for Next Year

As 2020 comes to a close, GeoPoll also examined the outlooks for next year. GeoPoll asked about the length of financial impacts of COVID-19, finding that almost half (45%) think economic effects will last at least six months, and 27% believe that the economic impacts will last over a year.

Despite this, there are signs of encouragement regarding respondents’ perceptions of their finances. A big majority (65%) believe that their finances will get better in the next year, compared to just 17% who think they will worsen, and 51% believe their country’s economy will get better in the next year. In comparison, 26% believe it will get worse.

Conduct Further Research with GeoPoll

These findings on consumer behavior are part of GeoPoll’s report on the impact the coronavirus pandemic has had on various life spheres. Download the full report here or dive more in-depth into the full dataset with the interactive dashboard here.

GeoPoll conducts surveys globally through multiple mobile-based methods, remotely reaching any population. GeoPoll can conduct research to enable brands, international development organizations, and governments better understand realities on the ground, even in the face of the challenges the world is undergoing. To request more information on our capabilities or get a quote for an upcoming project, please contact us.

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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 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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