reduce this speech file to 500 words

Impact of Covid-19 on Poverty Levels in Africa

In a move to respond to the outbreak of the COVID-19 pandemic globally, governments worldwide announced measures to help stop the spread, and these included keeping social distance and isolation of those who tested positive of the virus. World Health Organization stated that various measures were recommended to curb the virus from spreading before the vaccine was rolled out. However, strict containment policies can damage developing countries. Low-income families have minimal savings and food supplies, cannot operate remotely, and depend on regular labor income. As a result, being trapped during a lockdown puts them at risk of falling into severe poverty, therefore derailing the steps made to realize SDG 1. They can go hungry, resort to negative defense strategies (such as poor diets), or fail to report for work, putting them at greater risk of potential illnesses. This is the case in several countries where social safety nets do not exist or were reaching the vulnerable, who are disproportionately employed in informal jobs, is difficult.

According to World Bank, Many African governments’ fast and aggressive attempts to control the disease, while important, have come at a substantial financial cost. The country will experience a downturn for the first time in 25 years. GDP per capita growth in the area is now expected to be three to five percentage points lower. We predict that a 3% drop in GDP per capita in 2020, the optimistic outlook will result in an additional 13 million Africans living below the $1.90 international poverty line. If the containment steps are extended, or the downturn worsens, even more than 13 million people will become impoverished. For example, a 5% drop in GDP per capita may result in poverty rates similar to those seen in 2011 or send 50 million people in Sub-Saharan Africa into poverty. This is a significant setback. It will undo years of hard-won success in reducing poverty.

Families and individuals are struggling incalculably as a result of these sweeping economic shifts. There has been significant disruption to essential services. Hundreds of millions of children have dropped out of school. When schools reopen is unknown, and some students will never return. World Bank noted that many mothers and children are worried that COVID would cause them to die from diseases that would otherwise be preventable. These are also major failures, jeopardizing years of growth in the region’s human resources. Businesses have closed, markets have been disrupted, and jobs have been lost due to the lockdowns. The financial losses, as a result, have been enormous. COVID-19 caused income losses in 45 percent of urban households and 55 percent of rural households in Ethiopia, according to a phone survey. In Nigeria, 79 percent of respondents said they had lost their employment, and 42 percent of those previously worked are no longer working. Transfers from local and foreign remittances have also dried up, as domestic workers and international migrants have been struck simultaneously.

These shocks have been felt more strongly in urban areas, where the initial effects of the lockdowns were more severe. Low-wage and casual workers who work in occupations that can’t be done from homes, such as hospitality, retail, and distribution, have suffered the most significant income losses. Not unexpectedly, we discover that the latest poor vary in many ways from previous African poor profiles. Pre-COVID, for example, only two out of every ten poor Africans lived in cities. After COVID-19, the ratio is three in ten, representing a ten-percentage-point rise in the proportion of urban poor people. Since they have no choice but to work to survive during the pandemic, people from low-economic households are doubtful to adhere to self-isolation guidelines provided by the government. People from low-income countries are less likely to have a steady source of income since many of them depend on self-employment, for example, vendors and small-scale traders. Many of these people have reduced work opportunities that cannot be done remotely are therefore difficult to be reached by even aid organizations. A small percentage of workers in the rural areas who depend on farm work is likely to continue with their job if they had access to farm inputs and market for their products or rely on growing their food. Other people who don’t rely on the agricultural sector from poor regions work in small industrial sectors, for example, the production of handicrafts. Despite previous announcements that informal markets and street vendors will be closed, some of their activities could have continued. Many opinions have come up, especially on health and hunger issues, especially in places where stringent lockdowns have been introduced, such as South Africa. On the other hand, findings show that more impoverished areas have substantially lower work mobility. This is because many low-income families are unable to work, such as those employed in sectors that were adversely affected by the decrease in demand worldwide, for example, the manufacturing and tourism industries.

Given the magnitude of the problem and the lack of knowledge about the epidemic, various solutions – such as cash transfers, food distributions, and tax rebates – have been suggested and in many cases implemented to save lives and livelihoods. However, a major obstacle is that these initiatives are likely to bypass most of the new disadvantaged, mainly in urban areas and previously non-poor. So, what are the requirements for a better recovery from the crisis? I propose two short-terms and three medium-term options. Policymakers can help the new poor by using non-official but still useful data. This may include databases held by mutual aid communities, cooperatives, or telephone companies’ call information records. Irregularities and inadequate fund management have also marred the government’s effort to alleviate the plight of the poor in African countries. Cash payments by the federal government, for example, can only hit a fraction of the poor because Nigeria lacks a comprehensive national information management system, rendering electronic payments difficult. As a result, many people who have signed up for the National Social Register have not received the funds promised by the government. The government could investigate providing prepaid debit cards to the poor as an immediate solution. To ensure that the cards hit the poorest, this can be achieved at the group level. Of course, this is just a band-aid solution; more successful steps, such as direct bank transfers, must be bolstered. However, to open a bank account, one must first obtain a Bank Verification Number, including a national ID or an international passport, which many people lack. African governments must ensure that such programs are successfully executed by filling structural gaps and ensuring that distribution reaches the most deserving citizens.

Countries should also invest heavily in observatories to track how the shock affects families and provide assistance. In the short term, policymakers should consider creating universal databases since even localized, or complex community targeting would benefit from using one. Two additional actions would be required to develop resilience to future global shocks, including another pandemic, climate shock, or large-scale war. One option is to invest in digital networks, making them more affordable and accessible to all, much as we do with essential services like electricity and water. The other is to make sub-regional economic development more attractive. Since many African countries are too small to accomplish this tradeoff at a fair cost on their own, I believe that sub-regional if not regional resilience will be prioritized. While physical separation can help reduce the spread of the COVID-19, it can be costly for low-wage workers who depend on casual labor to meet their daily requirements. Due to such limits, people from low-income environments are likely to continue working despite restraint rules.