THURSDAY 9 APRIL 2020
Covid-19 is putting a strain on societies and economies around the world, and the poor who are carrying the burden of the disease, both in high-income countries as well as in developing contexts. Today, the World Bank has published its first assessment of the economic impact of Covid-19 in Sub-Saharan Africa, showing the devastating effects the new coronavirus is likely to have on the world’s poorest continent.
Because of international and domestic shocks, Africa’s gross domestic product (GDP) is forecasted to decrease by at least 2.5% in 2020 in the more optimistic scenario of a quick and efficient response. If the Covid-19 epidemic is not rapidly addressed and extends to next year, GDP could decrease by more than 5% in comparison to last year. While those economic statistics already seem bad, the effects on societies – and particularly on the most deprived and marginalised people – could be devastating. Even before the pandemic, 42% of people in Sub-Saharan Africa lived in extreme poverty (less than $1.90 per day). With household consumption 7% to 10% lower than without Covid-19, the crisis will lead to significant increases in poverty across Sub-Saharan Africa.
We have estimated the effects of those changes in consumption levels on poverty, using data from the World Bank’s PovcalNet dataset (this analysis is similar to that behind the research released earlier today by UN-WIDER). Depending on the decrease in consumption, poverty headcount could increase to as much as 47% of the population, levels last seen in Sub-Saharan Africa at the beginning of the last decade, after the global financial crisis. Under the more optimistic scenario, the consequences of Covid-19 would push more than 40 million people in the region into extreme poverty, adding up to a total of 495 million. In the more pessimistic scenario, 514 million people could live in extreme poverty, an increase of 59 million. With more than half of all people in extreme poverty being children, those estimates suggest that between 22 and 33 million children will be pushed into poverty by the economic consequences of Covid-19.
While this analysis has important limitations, other models project similar increases in poverty if the new estimates by the World Bank materialise. However, more analysis is needed to expand these estimates to other measurements of child poverty, particularly taking into account the multidimensional nature of poverty for children.
This is why governments across the world needs to respond decisively and effectively to the Covid-19 crisis. There is now a real and present danger that the 2020s will become a ‘lost decade’ of unprecedented reversals in development. The world’s poorest and most vulnerable people will bear the brunt – and the hopes of a generation of children will be destroyed. "Protecting a generation from Covid-19”, our agenda for action lays out what is needed now through coordinated community, national and global action to avert catastrophic outcomes for the poorest and most marginalised children on the planet.