The financial impact of Coronavirus in sub-Saharan Africa has been one to remember. A recent report highlighting the ripple effects of the global pandemic on the continent shows that 60 per cent of those employed prior to the COVID-19 pandemic have not been able to work as a result of the outbreak, and nearly half of those are unsure if they will have jobs to go back to.
The report released by GeoPoll reveals that informal and low-income earners are hit the hardest as unemployment surges in Ivory Coast, Kenya, Mozambique, Nigeria, and South Africa.
Sectors such as transport, aviation and tourism have been badly hit as governments took up new approaches meant to reduce the spread of the pandemic.
At the same time as countries themselves put COVID-related restrictions in place, the global economic pressures may result in decreased international lending for many of the countries that rely on external funding.
Mozambique, for example, has already accepted $309 million in assistance from the International Monetary Fund. When taken cumulatively, these factors could prolong economic downturn in sub-Saharan Africa and result in decreased food security, access to education, and more.
According to the study, in the months since the outbreak, it has already wreaked havoc on global economies. It is estimated that almost half the world’s population is at risk of job loss, and the World Bank has forecasted that the pandemic will cause the largest recession in over 50 years. “Industries such as tourism are not expected to fully recover from the economic shock for several years, and global trade and demand are already decreasing.”
According to Roxana Elliott, VP Marketing & Content, GeoPoll the closure of borders, restrictions on movements, and suspended education and hospitality sectors has wrought financial havoc across the African nations studied, with those in informal employment being hardest hit.
The study is also quick to point out that the lifting of restrictions is unlikely to repair the damage quickly, with only 57 per cent of the previously employed saying they still have work to return to once the COVID-19 restrictions are lifted.
Restrictions taken by governments to halt the spread of COVID-19 have had a huge negative impact on economies around the globe; in the United States, over 35 million Americans have applied for unemployment, and the euro zone GDP contracted by 3.8% just in the first quarter of the year. Globally, the pandemic has had a worse impact than expected on growth.
The World Bank has predicted that growth in sub-Saharan Africa will fall over 5% in 2020 due to coronavirus. Sectors including tourism, retail, and agriculture are expected to be hard hit as many countries in sub-Saharan Africa have completely closed off to outside visitors.
Overall, some 60 per cent of formal sector workers reported income falls, but 88 per cent of informal sector workers reporting reduced earnings. The International Labour Organisation estimates that the informal sector accounts for over 80 per cent of the workforce in sub-Saharan Africa.
“With many sub-Saharan Africans still excluded from borrowing, the impact of the pandemic on income and employment, which has hit the lowest income earners the hardest, will make paying for basic expenses such as food and rent a challenge for millions over the coming months,” said Ms. Elliott.
The loss of employment and sharp decrease in income that is being reported throughout the globe impacts the ability for people to afford basic expenses such as food and rent.
A report by the United Nation’s Food and Agricultural Organization has found that over 45 million people around the globe, primarily in South and Southeast Asia and sub-Saharan Africa, have been driven into food insecurity due to coronavirus.
This is driven by factors including disrupted food supply chains, loss of employment, and existing humanitarian crises. GeoPoll’s study examined the level of concern over expenses and which items are seen as the top priority and lowest priority for payment. Out of our total sample, we found that 77% are either fully or partially responsible for their household’s expenses, and this portion of respondents answered the remaining questions on expenses.
Males were slightly more likely to report being responsible than females (82% of males reported being responsible for expenses versus 71% of females), and older respondents were also more likely than those aged 18-25 to contribute to household expenses.
Food was the clear top priority for expenses: 51% report that food is the expense they will prioritize first this month, followed by rent with 23% of responses. While food was the highest category in every country, in Kenya and Mozambique it was cited as the top expense priority by the most respondents, at 63% and 57% respectively.
The lowest priority for payment was more mixed; While school fees was reported as the lowest overall at 21%, rent, vehicle loan, and credit card payments were also listed by about 13-14% of respondents each. There are some differences in low payment priority by country, with Kenyans being most likely to deprioritize school fees, and Nigerians reporting that they would not prioritize paying for vehicle loans in greater numbers.
Despite the harsh economic effects being felt, a majority in the nations studied believe their governments should prioritize protecting people from the virus, rather than focus on reopening economies.
The survey was conducted remotely via SMS from June to July 2020. It was run through GeoPoll’s mobile surveying platform, which enables safe and effective data collection via SMS, voice call, and other modes even when in-person research cannot be conducted.