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COVID’s Aftershocks in Africa: A global economic recovery

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A roundup of the latest news, stats, and analysis of COVID-19’s impact in Africa. View our data tracker and sign up for our weekly newsletter here, and read on for a primer on COVAX and what to look for at this week’s G7 meeting. But first, how to avert a lost decade for African development.

Top news

Lost decade: COVID is set to cost the global economy on average $1 billion a day over the next six years, according to the IMF. ONE’s new data viz shows the uneven shape of the recovery. While Europe, North America, and China will be close to pre-pandemic growth levels by 2022, most of Africa, Latin America, and India will not. Ghana’s Finance Minister Ken Ofori-Atta told The Economist Africa is “going to lose a decade.”

Intolerable hardship: “This isn’t any old recession. Its depth and extent are something we have never seen in poor countries.” So said the authors of a major new study that surveyed 30,000 people in nine low and middle-income countries and found “staggering hardship.” The study, conducted by academics at Yale, Northwestern University, and Berkeley, found 70% reporting lost income, and almost half skipping meals. In Kenya, the number of children missing meals increased by a staggering 69%.

Think global, act now: The UK will host a special G7 Finance Ministers meeting this week to map a way out of the economic crisis. UK Chancellor Rishi Sunak wants to prioritise vulnerable countries. First item of business should be a global economic recovery plan. Global doesn’t just mean rich countries. While advanced economies have created stimulus packages of more than 12% of GDP, the average in low-income countries is just 1.2%. It’s time for a global response to a global pandemic, and this meeting is a key opportunity for the world’s richest countries to finally start delivering.

No-brainer: Finance ministers should instruct the IMF to use its tools to avert economic catastrophe. Special Drawing Rights (SDRs) were used during the 2008 financial crisis to bolster economies and prevent more widespread damage. President Trump’s Treasury Secretary Stephen Mnuchin blocked a new issuance last year, despite widespread support for what is a no-brainer. But the idea is back in play with positive signals from new US Treasury Secretary Janet Yellen’s team. $650 billion of SDRs would not require congressional approval, could happen quickly, and would go a long way to solving the fiscal crisis in Africa.

Fair share: SDRs are allocated in proportion to how many shares a country holds in the IMF. This means the majority would go to richer countries that don’t need them. Africa would get about 5%. Rich countries should transfer these SDRs to low- and middle-income countries. European Finance Ministers should agree to champion this idea when they meet next week. CGD’s Mark Plant and David Andrews have the details on how this would work.

Proxy war: While the allocation doesn’t require congressional approval, insiders tell us that SDRs could be turned into a partisan political football in the US. DC politicos and their colleagues around the world should remember the collateral damage — debt defaults, hunger, and a slower global recovery.

Looming debt crisis: 31 countries are in or at high risk of debt distress. Nigeria’s 2021 budget allocates three times more to debt service than health and education combined. G7 Finance Ministers should extend the Debt Service Suspension Initiative through at least the end of 2021 to give countries breathing space and include private creditors and multilaterals. Same applies to the G20’s Common Framework which should ensure a fair deal for Zambia, Chad, Ethiopia, and others that will need debt restructuring. With growing concerns about debt transparency, African Parliamentarians are stepping up and our partners at the Open Government Partnership lays out a smart solution.

Trouble brewing: Even before COVID, Aid to Africa and the most vulnerable countries was falling. Our expert Sara Harcourt shares her takeaways from the latest OECD data.

Step up or step out: It’s no secret that the World Bank’s performance during the pandemic has been lackluster. Last year, ONE was pretty outspoken on the Bank taking more money in debt service from the poorest countries than it was in providing new COVID financing. We’re now hearing rumours that African leaders see the Bank as increasingly irrelevant, while activists are preparing to call for David Malpass to be removed unless he launches a credible COVID recovery plan by the Bank’s Spring Meetings in April. Read our analysis of the Bank’s performance.

Playing truant: Kids in South Sudan have missed a sixth of their schooling because of COVID. Even before the pandemic, 90% of 10-year-olds in low-income countries could not read and understand a simple sentence. At ONE we’re campaigning to avert a learning catastrophe.

The numbers

  • 130 million: additional people globally could be at risk of becoming acutely food insecure.
  • 90 million: COVID vaccine doses from COVAX will be shipped to the most needy countries this month.
  • 3955: COVID infections among health workers in Africa in the past month; 40% were in Zimbabwe.
  • 16: African countries requested 114 million vaccine doses for COVID under the African Union Vaccine Acquisition Task Team plan.

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