The Covid-19 pandemic has significant impacts on African economies and the mobility of African people. In a continent where internal migration represents the major part of migration flows from the continent (around 80% of immigrant stock), border closures, travel restrictions or lockdown measures taken to halt the spread of the virus had significantly impacted people movements both within countries and outside. They have also affected remittances. According to the World Bank, in 2020, remittance flows to low- and middle-income countries are expected to drop by around 20 percent to $445 billion, from $554 billion in 2019. Sub-Saharan Africa (-23.1%) is one of the regions where the decline in remittance flows is expected to be the sharpest. This has both consequences at a macro level and at a micro level. At a macro level, for countries for which remittances are an important part of their GDP, this will impact their national budget in a context of high level of debt and tight fiscal space. At a micro level, the decrease in remittances could mean a decrease in welfare[1] and less investment in human capital, in particular for households for which remittances are the major source of income.
While migration and the subsequent remittances are part of risk coping mechanisms, we are in an extraordinary situation where remittances receivers and senders are facing the same shock at the same time, putting an additional burden on migrants and their families left behind. It is thus important that international institutions, such as multilateral development banks step in to help countries, in particular, the most vulnerable, to cope with the consequences of these shocks. Related to Covid-19, the African Development Bank (AfDB) has put in place a USD 10 billion Covid-19 Crisis Response Facility (CRF). This envelope is dedicated to public sector operations though budget support or investments projects, to support Regional Members Countries by increasing their means and give them more fiscal space in these challenging times. Part of this envelope is devoted to private sector operations, regional operations and emergency grants[2] to increase African countries’ capacity in their response to the pandemic. These interventions include projects and operations targeting vulnerable communities including Internally Displaced People (IDPs). Beyond operations, the AfDB issued a record-breaking $3 billion Fight COVID-19 Social Bond, the world's largest US dollar-denominated social bond ever on the international capital market to address broader social issues emerging from the pandemic.
Policies to cope with the adverse effects of Covid-19 should be put into a broad perspective that take into account all components of the societies, including migrants. More generally addressing the drivers of fragility and helping countries build economic resilience to shocks is key to the work of the AfDB. This is all the more important when we know that the drivers of fragility tend to be the same as the drivers of migration. For instance, one of the key priorities of the AfDB is to support regional integration which is critical to foster labour mobility in Africa and which can be considered more than ever as a good way to deal with adverse shocks. Boosting regional integration presents an opportunity to take advantage of the African Continental Free trade Agreement (AfCFTA) and effectively implement the Free Movement Protocol in Africa. The AfDB has also programs that aim to address the root causes of migration by providing other options to young people in terms of jobs and opportunities, and address the issue of risky irregular migration attempts. This includes The Jobs for Youth in Africa Strategy that aims to “create 25 million jobs for African youth over the next decade and equip 50 million youth with a mix of hard and soft skills to increase their employability as well as their entrepreneurial success rate”. Other programs aim to promote entrepreneurship in the agriculture sector and ICT or tackling food security issues that could lead to people displacement, for instance.
These examples illustrate the importance and relevance of having a holistic approach while dealing with the impact of a shock such as the Covid-19 pandemic. It is thus critical to put in place the right policies and actions that can help African countries build resilience and raise to the challenges posed by the pandemic.
[1] According to the AfDB estimates, an additional 28.2 to 49.2 million Africans could be pushed into extreme poverty as an estimated 24.6 to 30 million jobs could be lost due to the pandemic.
[2] The AfDB approved a $2 million grant for the World Health Organization to support its efforts on the continent.
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