By: Sara Gustafson
Blog originally posted on ssa.foodsecurityportal.org
While Africa south of the Sahara has largely avoided severe health impacts of the COVID-19 pandemic (fewer than 5 percent of globally confirmed cases and approximately 89,000 COVID-related deaths), the region is experiencing economic fallout due to national and global pandemic policy responses. Economic growth, value chain functioning, incomes, trade, poverty, and consumption have all been negatively affected, according to IFPRI’s 2021 Global Food Policy Report.
The pandemic has interrupted the region’s recent decades of economic growth, with an additional 37.5 million people expected to fall into extreme poverty. GDP losses for the continent as a whole are estimated to range from 1.7 to 5.1 percent. Country-level GDP losses range more widely, from 9.7 percent in Mali to as high as 38 percent in Rwanda. Much of these losses are due to decreased global demand for primary commodities.
Household incomes throughout the region also fell in 2020 as lockdowns to control the spread of COVID-19 reduced employment opportunities and remittances. Disruptions to food value chains and informal markets resulted in food shortages and surging food prices in some countries, although these impacts varied by area and commodity. For example, while food value chains in Ethiopia remained surprisingly resilient overall, the country’s dairy and livestock sectors saw a significant decrease in demand and increase in price of feed and other inputs.
Social safety net programs like cash transfers were scaled up across Africa south of the Sahara, and many countries enacted other macro-level relief policies to help populations better weather the shock. For example, Kenya and Malawi passed various tax relief measures, and Rwanda fixed prices for critical PPE goods like masks and hand sanitizer. However, policymakers’ ability to address the impacts of the pandemic at the macro level have been hindered by a lack of fiscal space: the liquid capital available to respond to the shock posed by COVID-19 is estimated to be less than half of what that response will cost. As a result, Ethiopia, Ghana, Mali, and Senegal (among other countries) are now facing potential financial crises.
The long-term effects of the COVID-19 pandemic and associated policy responses remain to be seen. However, the GFPR emphasizes that a food systems approach can help prepare national and regional food value chains for future shocks. Such an approach should take a long-term view of factors like climate change, increasing urbanization, shifting demographics, and modernizing value chains and trade systems. By helping informal food value chains enhance their productivity and enter the formal agrifood sector, governments can increase their revenues. This will allow national budgets to better account for disaster preparedness and build in more flexibility to respond to shocks at the macro level. With increased revenues, governments can also increase investments in rural infrastructure, early warning systems, agricultural R&D, education, and health systems, as well as incentivize private sector investments in digital technologies and other innovations that can aid in both agricultural transformation and disaster response.
Sara Gustafson is a freelance writer.