As mobility of people and goods almost comes to a pause, COVID-19 pandemic is brining economies into their knees with multinational companies ceasing production. Economies are plunging into one of the great economic recession.
Besides the repercussion that the virus is inflicting on the economies, governments counter measures are taking toll in the different sectors. No doubt, lockdown of cities means no production or movement of goods and people; this will inevitably lead to economic slowdown if not complete recession. In this respect, the Sub-Saharan economies such as ours would be one of the hard hit by COVID-19 facing its first great recession in 24 years.
The sharp fall in global demand for products is having and will have spillover impacts on the economics of others, and the repercussion is already being felt by different sectors. In Ethiopia, aviation, trade and manufacturing sectors have felt the impacts earlier. While the problem appears to be global, there is no one-size-fits-all solution to the impacts. The counter measures rely on the financial strength of the government, and the intervention depend on the intensity of the pandemic and its duration time.
The scale of the impact will depend on the respective countries’ preparation and containment mechanisms, so is the policy responses. That is why experts have emphasized more on the need for a customized policy response. As developing countries, Ethiopia must secure additional financial sources from donors as it has already made requests to the global institutions to provide Africa with the much needed finance. Pushing for debt relief is also a way out of the current global mayhem.
Experts advise to come up with various social protection interventions, especially targeting workers in the informal sectors should also be considered. In fact, the effort to fight the virus and mitigate its impact in the economy should not be left to the government alone.
The country needs to assess and strengthen its well-functioning rural and urban safety net organizational arrangement, programs, delivery methods such as cash and voucher. These must now be tested and made to work using existing stocks in addition to activating strategic grain reserves.
Mobilizing social self-help institutions such as Idir, Maheber and whatnot provide no fewer advantages. These institutions could be linked with formal structure to provide a coordinated support to the most vulnerable population during the pandemic.
The Ethiopian Herald April 17/2020
