‘COVID-19 pushes 30 million Africans into extreme poverty, retards progress’
The novel Coronavirus has pushed some 30 million people in Sub-Saharan Africa into extreme poverty and dwarfed more than five years of progress, according to a report released, yesterday, at the ongoing Bloomberg New Economy Forum in Singapore.
The Bloomberg Economics Special Report, titled, “Long COVID: Jobs, Prices and Growth in the Enduring Pandemic,” noted that while some grounds would have been covered, as economies across the continent recover, the development remained insufficient to meet the United Nations Sustainable Development Goal (SDG) of eradicating poverty by 2030 – an existing target before the outbreak of the virus.
The document speaks to the challenges of the COVID-19 pandemic to growth, inflation and development globally.
A report titled, “Half a billion in poverty and counting: How COVID derailed Africa’s development goals,” relived how a lost year of growth had affected poverty reduction goals on the continent.
According to a statement released yesterday by the forum, the turn of the century saw Africa’s economy on an upward trajectory due to reduced conflict, allowing for better economic policies and increased macroeconomic stability.
The International Monetary Fund and World Bank’s Heavily Indebted Poor Country Initiative in the early 2000s led to a substantial reduction in debt levels, freeing up domestic resources and improving donor relations.
Increased trade and buoyant commodity prices also played a role, with Gross Domestic Product (GDP) per capita in resource-rich countries growing twice as fast. This resulted in better living standards for the populations – people became healthier, access to basic services such as water and sanitation improved, school enrolment increased, and the share of people living below the World Bank’s extreme poverty line of $1.90 per day fell from 58 per cent in 2000 to 42 per cent by 2015.
From 2016, growth faltered. The slowdown started a year after the adoption of the SDGs – the universal call to eradicate poverty by 2030 – through progress on 17 integrated goals that range from health, education, inequality and climate change.
Sub-Saharan Africa continues to lag behind on most of the goals. Most notable is the slack on poverty reduction. Before the pandemic in 2019, Africa had more than 60 per cent of the world’s 700 million poor.
The disease threatens to throw the region further behind. In 2020, the region plunged into its first recession in more than 25 years, erasing at least five years of progress in fighting poverty.
Economists forecast that lost ground won’t be recovered until 2024 when per capita output is expected to return to pre-pandemic levels. Sluggish vaccine rollout means many countries will continue to deal with virus outbreaks that delay the safe reopening of their economies.
Rising debt service costs are continuing to squeeze out much-needed development spending even when the virus effects fade.
According to the Bloomberg report, the persistent impact of the pandemic on incomes means the poverty rate would translate into almost 25 million more people living in penury.