Economy

COVID-19 lockdown to inflict $65.7 bln loss on Africa every month: UN

Food security threatened; about 70% slum dwellers surveyed by UN in Kenya missing meals or eating less

 
By Kiran Pandey
Last Updated: Tuesday 12 May 2020
Over 61,100 COVID-19 cases and 2,200 deaths were reported in 53 African countries as on May 11, 2020. Photo: The Conversation / Shutterstock

Africa can lose up to 2.5 per cent of its annual gross domestic product (GDP), equivalent to about $65.7 billion, for every month of lockdown imposed to control the novel coronavirus disease (COVID-19) spread, according to United Nations Economic Commission for Africa (UNECA) estimates released on May 11.

COVID-19 cases continue to increase in Africa despite partial or complete lockdowns imposed in at least 43 countries in the continent.

Over 61,100 COVID-19 cases and 2,200 deaths were reported in 53 African countries as on May 11, 2020. The number of cases increased by nearly 30 per cent in the last week, according to the data provided by the Africa Centre for Disease Control and Preparedness (Africa CDC).

This economic cost of the lockdown was in addition to the wider external impact of the pandemic in Africa such as lower commodity prices and investment flows.

The key economic risks as a result of the lockdown include

  • Drop in demand for products and services
  • Lack of operational cash flow
  • Reduction of opportunities to meet new customers
  • Closure of businesses
  • Decline in worker production and productivity from working at home
  • Logistics and shipping of products
  • Difficulties in obtaining supplies of raw materials essential for production

According to the UNECA, firms in the manufacturing, health, entertainment, utilities and transport and trade sectors were operating at the lowest possible capacities.

Approximately 164 million informal workers in Africa are stuck under complete lockdown measures, said International Labour Organisation. Informal sector was the worst hit, said Vera Songwe, executive secretary of the Economic Commission for Africa (ECA) in a virtual global debate held on May 7, 2020.

Food security threatened   

COVID-19 has specially affected food security in the continent, noted the report. It has been a key challenge faced by policy makers in the continent.

The World Food Programme, too, had raised alarm over threat to food security in the region due to the pandemic. About 70 per cent of slum dwellers surveyed by the UN agency in Kenya reported that they were missing meals or eating less.

The ECA, in a new report, proposed seven exit strategies that provide sustainable, albeit reduced, economic activity. These strategies are based on the experiences and practices being proposed and tried around the world. 

The ECA recommended improving testing; following lockdown until preventive or curative medicines are developed; contact tracing and mass testing; immunity permits; gradual segmented reopening; adaptive triggering and mitigation.

Under adaptive triggering, the nations can ease lockdown once infections decline and re-impose if they begin to rise above intensive-care capacity, the UNECA suggested. These would require regular shutdowns lasting two-thirds of the year, making little difference to permanent lockdown from an economic perspective.

Mitigation gradually allows the infection to spread across the population with some social distancing measures in place. It is reportedly working in Sweden, where an estimated 25-40 per cent of Stockholm have contracted COVID-19, but relies on good adherence to basic social distancing measures and strong healthcare capacity.

This could imply considerable risk in African populations with low healthcare access and unknown co-morbidities.

UNECA said the lockdowns prevent severe vulnerabilities in the continent where only 1.8 hospital beds are available per 1,000 people. The risk of spread of the infection is also high since only 34 per cent of the population in Africa has access to household facilities for washing hands with soap and water.

According to the UN agency, testing, contact tracing and easing restrictions may be possible for countries with sufficient public health systems. It works for countries that have contained COVID-19 transmission, put in place preventive measures, engaged and educated communities and minimised risks to vulnerable groups.

Slow and segmented re-opening

A gradual segmented reopening may be needed in countries where containment has failed, with further measures to suppress the spread of the disease, the report noted.

It suggested proactive data-driven monitoring to ascertain risks across the breadth of policy unknowns to move towards a ‘new normal’.

It also called upon the African nations to take advantage of being behind the curve — and use it to learn from the experiences of other regions.

The ‘extra time’ afforded by the lockdowns must be utilised to rapidly put in place testing, treatment systems, preventive measures and carefully design lockdown exit strategies in collaboration with communities and vulnerable groups, the report suggested.

Even as the UNECA recommended strategic easing of the lockdowns, at least five African countries — Rwanda, South Africa, Nigeria, Ghana and Democratic Republic of Congo — have already begun to lift restrictions.

Of these, the report included Rwanda and South Africa as the case study. Rwanda was the first to impose lockdown, but decided to ease restrictions on May 4, 2020.

South Africa, too, decided to lift restrictions since May 1, 2020 amidst concerns about the impact on jobs and economy.

While suggesting a road map, the UNECA also warned that if COVID-19 is widespread and likely to resurge in a country, then prematurely exiting from a lockdown will result in a false economy; a re-opening that leads to another COVID-19 outbreak would likely cause economic activity to plummet once more.

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