BUSINESS REPORTER
Zimbabwe is among the 15 countries that will take time to shake off the effects of the Covid-19 pandemic, a new report has show, despite government’s projecting a rosy picture of an economy back on track.
The pandemic, which devastated the world thereby trigggering global lockdowns, is estimated to have pushed 55m Africans into extreme poverty in 2020 and reversed more than two decades of poverty reduction on the continent, according to the Economic Report on Africa 2021 released on Saturday.
The report, which was released by the Economic Commission for Africa (ECA), showed that the economic crisis is particularly debilitating in Angola, Burkina Faso, Cameroon, Ethiopia, Mozambique and Nigeria and the vulnerable population in these countries has access to only limited social protection.
It said nine countries (Côte d’Ivoire, Eswatini, the Gambia, Liberia, Mauritania, Niger, Senegal, Sierra Leone and Zimbabwe) lack data on social protection coverage, but the other indicators remain a cause for concern.
“People in all 15 countries have few prospects for employment, reflected in a high rate of vulnerable employment and a low employment-to-population ratio and mostly low skilled labour force. In these countries, recovery from the Covid—19 pandemic will be difficult and could take longer than expected, ” the report said.
According to the report, Africa spent US$2.2bn on fiscal stimuli, made up of increased expenditure and extended payment deadlines on overdue loans and reduced taxes.
The report said growth in Africa’s largest economies had already started contracting or slowing before Covid-19.
It said several African economies reported economic contractions in 2019 despite natural resources endowments : Equatorial Guinea (4.6%), Libya (19%), Sudan (2.6%) and Zimbabwe (7.1%).
“These outcomes reflect low economic diversification and prospects of continued civil strife, ” the report said.
Hanan Morsy, ECA’s Deputy Executive Secretary said the report analyses the implication of Covid-19 in terms of poverty, but brings a new dimension stressing the vulnerability in Africa. It brings the element of people centric analysis of what has been happening during COVID-19 and what we need to do to ensure that the vulnerable population are protected in terms of social safety net and putting up the right policies, she said.
“This report is particularly relevant given to what we have seen as the implications on the continent. The most critical implication of Covid-19 has been the reversal of the very hard-won gains that the continent had managed to achieve in reducing poverty,” Morsy said.
While presenting the key findings of the report, Adrian Gauci, an Economic Affairs Officer at ECA said African countries responded to the poverty effects of the Covid-19 pandemic in part through expansionary fiscal and monetary policies to maintain consumption and aggregate demand and prevent firm closures and job losses.
“A major contribution of the report is the emphasis on the centrality of risk and vulnerability to shocks in the design of poverty reduction strategies in Africa,” said Gauci.
“The report calls for an urgent need to explore innovative and affordable market-led insurance schemes which can insure the poor from future shocks. Collaboration of governments with the private sector is paramount.”
The African Continental Free Trade Area (AfCFTA), the report says is an opportunity to build forward better Most African countries still depend on exports of raw materials and on imports of essential goods such as food items and pharmaceuticals.
“If AfCFTA is effectively implemented, intra-Africa trade is expected to be about 35 per cent higher than without the grouping by 2045,” it said.
“The AfCFTA would help Africa industrialize and diversify, reducing trade dependence on external partners and boosting the share of intra-Africa trade from roughly 15 per cent today to over 26 per cent.”
