“The first recession in the region over the past 25 years”. The World Bank’s forecasts for sub-Saharan Africa’s growth in 2020 set out a troubling scenario in which the most fragile sectors of society will be especially affected. According to the International Monetary Fund, the estimated downturn of African economies will be around -3.2%, i.e. a $243 billion loss if compared to 2019 projections; average GDP per capita will drop up to 5.4%, back to levels of the beginning of the decade.
The adoption of lockdown measures aiming at curbing the spread of the coronavirus pandemic had profound socio-economic implications across the continent. Containment is hardly consistent with African societies’ organization, where informality is the rule. In sub-Saharan Africa, 55% of the population lives in informal settlements, such as slums or shantytowns. The informal economy allegedly accounts for about 40% of sub-Saharan Africa’s GDP (60% in Nigeria, the most populous country on the continent). The International Labour Organization (ILO) reported that “informal employment is the main source of employment in Africa”, accounting for 86% of all employment – 71.9 % when excluding agriculture – and 89% in sub-Saharan Africa. The highest rate is found in Burkina Faso (94.6%), the lowest in South Africa (34%). A structural characteristic of the informal economy is self-employment, that is, individuals work on their own account and most typically in precarious situations. Generally speaking, the COVID-19 pandemic will have a dramatic impact on Africa’s labor market, leading to a sharp increase in underemployment – up to 30 million jobs could be lost – while the wages and working conditions of surviving jobs could significantly worsen, with many workers switching to the informal sector to maintain their incomes.
Among the social consequences of the COVID-19 crisis, a strong rise in poverty will be inevitable. Poverty rates were reduced from 54% in 1990 to 41% in 2015, albeit the absolute number of people who live below the international poverty line of $1.90 per day rose from 278 million to 413 million due to demographic growth. Regional situations vary: half of the African poor live in Nigeria (85 million), Democratic Republic of Congo, Tanzania, Ethiopia and Madagascar, followed by Mozambique, Uganda, Malawi, Kenya and Zambia, hosting a further 25%. The prevalence of poverty is higher among workers in the informal economy (i.e. activities such as small subsistence farming, breeding, fishing, and street peddling) who have no salary, social security nor saving accounts.
Before the current crisis, poverty rates in Africa were expected to decline by 0.71% in 2020 and 0.67% in 2021. On the contrary, the recession that the coronavirus pandemic generated will increase poverty rates throughout the continent by at least 2% – up to 2.8% in the worst-case scenario – in 2020, further deepening in 2021 by an additional 2.5% to 3.6% (baseline and worst-case scenarios) as foreseen by the African Development Bank (AfDB). This means that an additional 26 to 58 million people in the sub-Saharan region will fall into extreme poverty conditions, mainly in West and Central Africa – Nigeria and Democratic Republic of Congo will be particularly affected. While a vast majority of Africa’s poor lives in rural areas, and is directly dependent on farming or pastoral activities, the “new poor” mainly live in urban areas, possess some level of education and are self-employed in sectors different from agriculture. In particular, of some 170 million people who make up the fledgling African middle classes – that is, households with a daily spending capacity between $11 and $110 per person in 2011 PPP – 8 million could fall back into poverty due to loss of jobs or social security income benefits, the World Data Lab estimates.
As a feature typical of African societies and productive systems, informality exposes the populations of the continent to serious vulnerability. Forced to comply with lockdown measures to prevent the spread of the virus, households that are dependent on unprotected informal wages are at risk of losing their income sources and running out of livelihoods. This will lead to an increase in social inequalities, exacerbating insecurity, and deteriorating the economic conditions of individuals and communities faced with the dramatic choice of either starving or getting sick. Curfews and border restrictions have disrupted supply chains, trade activities and agricultural production, constrained transport to markets, reduced the availability of basic food items and exacerbated price increases, leaving poor people struggling to access food. Rising food prices drove down purchasing power among rural and urban dwellers who have had to cut down on the quantity of their consumption, with direct consequences on their nutrition and health levels.
As stressed by UNCTAD, there is a “strong positive correlation between economic recession and food insecurity in Africa”. According to the World Food Programme’s Global Report on Food Crisis, in 2019 129 million people in 32 African countries were in stressed conditions, while 73 million individuals in 36 African countries were classified as acutely food-insecure people in crisis or worse. In 2020, the combined effect of the global pandemic and multiple drivers of fragility – such as climate-related shocks, violent conflicts and an unprecedented locust outbreak – are most likely to result in a deteriorating food security and nutritional situation. The number of people “on the brink of starvation” is projected to double globally, with a high share of them in Africa. “At the same time while we’re dealing with the COVID-19 pandemic, we’re also on the brink of a hunger pandemic”, WFP’s executive director David Beasley stated.
The social impact of the pandemic and its economic consequences in Africa pose a serious risk of sliding back in terms of development. As stressed by the African Development Bank, the COVID-19 crisis “could move the continent further from the Sustainable Development Goal of eradicating extreme poverty”. In order to mitigate this risk, it is paramount for African governments to provide adequate assistance to food-insecure households and invest their financial resources in strengthening social security measures and alleviating the effects of the current dramatic and multidimensional crisis on the most vulnerable.