IMPACT OF COVID-19 ON AFRICAN ECONOMY
The poor lose again: Who is the Speaker for the poor citizen? to overcome the challenge of COVID-19 almost all countries were applied ‘from restriction to total lockdown’. In one case the poor peoples are depending on daily activity which is hand to mouth, in another case national emergence which supports the slogan of ‘stay at home’ has been underway. Africa is poor continent in live and there was no subsidization for marginalized group. Therefore, double side sword on the continent needs critical decision.
According to ECA (2020) “between 5 million and 29 million people will be pushed below the extreme poverty line of $1.90 per day owing to the impact of COVID-19, compared to the baseline 2020 African growth scenario. Vulnerable households affected by COVID-19 face an increased probability of moving into transient poverty by 17.1 per cent, a 4.2 per cent increased probability of staying in poverty for a decade or longer, and a fall in the probability of moving out of poverty by 5.9 per cent. Increased poverty levels will also exacerbate existing income inequalities. For low-income households, which already spend an average of 36 per cent of their income on health care-related expenses, access to health care will become increasingly unaffordable in the wake of COVID-19, leading to an increase in the number of households falling below the poverty line. Annual formal job creation (currently 3.7 million) is forecast to drop by 1.4 to 5.8 per cent, compared with the baseline 2020 African growth scenario. An increase in informal and vulnerable employment is expected (more than 60 per cent of men, and nearly 75 per cent of women are informally employed in Africa) and an increase in out of pocket expenditure by poor and vulnerable households. on the above statement, one can freely understand that the poor become poorest due to COVID-19” (Africa Development Bank,2020).
Economic Recession of the Giants
The two giants in economic performance, Nigeria and South Africa faces big Challenges in arena of COVID-19. There is no self-sufficient country in the world in which all resource is available in their domestic land. Some of the countries were agricultural exporter while other importer, the same is true for oil producing and natural endowed countries. In the nutshell one country depend on the other and vice versa is true. In this time of pandemic tourism, import and export and all international trade are under question due to total lock down. Nigeria and South Africa are the two-leading country in the continent. GDP of both Stricker countries were unquestionably reduced to recession. In Nigeria the lockdown of capital city of Abuja and Lagos have been undermine government revenue. In south Africa tourism become stagnant sector due lock down. In both cases deep recession in economic growth was recorded. If revenue of government decrease health sector service will reduce.
Fiscal Risk
Most African countries have been used fiscal policy in which government expenditure and tax is key players in economic growth. At the moment of restriction and total lock down expecting revenue from tax collection is just like finding the moon on the ground. If revenue from tax is reduced it will result government deficit, in turn unemployment and the country may failed under dept crisis. For example, “At an estimated 13.4 per cent in 2018, its tax-to-GDP ratio was lower than that of Asia (14 per cent), Europe (25 per cent) and Latin America (18 per cent). On the whole, average tax revenues on the continent consistently decreased by 2.8 percentage points from 16.2 per cent of GDP in 2014 to 13.4 per cent of GDP in 2018. Commodity exporters have in particular been under pressure since the 2014 commodity price shock. Notwithstanding increased government efforts on domestic resource mobilization, several Africa countries (oil exporters and non-oil exporters alike), in recent years have adopted policies such as tax holidays that were aimed at attracting foreign direct investments. Consequently, tax buoyancy in Africa has been less than 1, with output and incomes growing much faster than tax revenues. Ethiopia, Gabon, Ghana and Kenya are examples of countries that have export processing zones or special economic zone agreements with foreign countries that grant tax reductions (ECA,2020). Income tax is an important source of tax revenue for African countries, contributing over 40 per cent of total tax revenue for the lower-middle income countries and middle-income countries. Both personal income tax and corporate income tax are larger for the more diversified economies like Kenya, Morocco and South Africa” (SDG7,2020)
Loses due to travel restriction
In many African countries including Ethiopia, Egypt, Morocco and south Africa airways are registered as the large tax payers’ sectors. Witnesses from BBC indicated that “As at February 2020, regional carriers that cancelled flights to China included Rwanda Air, Kenya Airways, Air Madagascar and Air Mauritius. The subsequent losses were heavy, estimated at $29 billion globally and $400 million for African carriers. More precisely, for instance, it was estimated that Kenya Airways lost over $8 million monthly as a result of suspending flights to China. Most airlines have currently suspended flights to over 50 per cent of their destinations” (BBC Africa,2020).
Africa failed under critical pressure as restrictions and total lockdown are imposed. For example, FDI (foreign direct investment) and investment in the continent become illusive as aircraft transport is restricted. Industrial input and manufactural company in developing country like Africa was interrupted and its bad news specially for labor intensive company because flow of both capital and labor is under severe pressure as travel is restricted due to COVID-19. “As borders close as part of the COVID-19 policy response, governments can expect a drastic reduction in revenue collection. Local governments will also face a decline in own source revenues as well as national transfers, which account for 70–80 per cent of their finances. Consequently, the financial capacity of African national and local governments to respond to the COVID-19 crisis is acutely impaired…”
Agriculture export shock
Ethiopia and Uganda are the known coffee producer in Africa. In Ethiopia four million smallholder farmers grow coffee while 500,000 households depend on coffee farming in Uganda. At the moment of restriction, the international coffee price may reduce in the major importing countries like USA and EU. If prices of coffee in international market fall redundantly for the coming season, it will affect small-scale producer of coffee in Africa. Ivor coast and Ghana are the known producer of Cocoa in the continent and good exporting countries. Kenya and Ethiopia are also the top fresh cut flower producing countries while Botswana is the leading fresh meat exporter in the continent.
Generally, Agriculture sector severely hit by COVID-19, which leads to losses in export revenues.
Given the recent study conducted by Alemayehu Geda about the social and economic impact of COVID-19 in Ethiopia and using local and global media-based information, information obtained from interaction with some of the industry actors as well as his own research about the Ethiopian economy, one can understand and come up with the possible economic impact of the virus on the country. That study noted that GDP may contract by 11.2 percent in 2020/21 fiscal year (that runs from July,2020- June 2021) if the economic effect of the virus lasts till the end of 2020. In the best-case scenario of the effect of the virus being limited to the first quarter of the next Ethiopian fiscal year 2020/21, the GDP may contract by 5.6 percent, instead. In the worst-case scenario of the effect hanging around for the coming three quarters, the decline in growth could be as high as 16.7 percent (Alemayehu Gada,2020)
Domestic Violence and Remittances loses
Remittance inflows are the major source of finance for large numbers of African countries. It increases access to dollar and will increase the velocity of money for international trade. In 2020 it estimated around 65 billion Dollar is projected as a result of remittance in Africa. Remittances are projected to reduce as service sectors in the remittance exporting countries like USA, Asian Tigers and West Europe are vulnerable to COVID-19. Reduction in remittances will affect Africa (developing countries) and conflict affected countries. “Domestic violence rates are rising, with COVID-19 lockdowns keeping families at home together for longer periods and women unable to leave an unsafe situation, in what the United Nations Secretary General, António Guterres, calls a “horrifying global surge in domestic violence”.
As governments divert resources to deal with the public health crisis, safety, security and access to justice services will no longer be readily available to victims of domestic violence. As has been evidenced from the experience in Sierra Leone during the Ebola epidemic, the closure of schools and the diminished protection from governments create an enabling environment for child marriage and sex transactions between young girls and older men as a means of economic survival for families…” (FAOSTAT,2020)
TRADE-OFFS: COVID-19 AND POLITICS OF THE CONTINENT
Politics and the newly emerged pandemic are the two-chief evil in Africa. Therefore, one can say Africa is in a moment of madness and the continent is in the cross-road. The pandemic is set to test seriously the continent’s political elites and governance. Countries of displacement, political instable and continent of the poor, Africa is wounded by multiple sided swords. Democracy is illusive for Africa because of low educated man power, a greater number of ethnicity and historical revenge.
The spread of pandemic (COVID-19) in Africa because of political instability by causing ideal conflict among ruling class, hunger and famine problems, unemployment and increasing conflict between population and government body. Government intervention could have face trade-off in decision making specially in Africa. The effect of Pandemic is different from country to country. As example “national emergence and stay at home” declared by government will result unrest because when police try to soften the impacts of COVID-19 through lockdown it may cause economic stagnant on the poor family. To overcome the Pandemic Crisis the government may exposed to expense which will in turn dept crisis. The use and extension of emergency powers in a number of countries represents a threat to human rights and the consolidation of democracy. Slowing economic growth will undermine the ability of governments to provide basic public services in the medium term.
COVID-19 Crisis as a Cover for politics
In the recent case of continent politics, Ethiopia, Malawi and Uganda faces severe challenges as a result of Pandemic. Countries of Origin Ethiopia suspended election due to pandemic, the reformist and the noble price winner Abiy Ahmed Ali on parliament said the time is for live saving not for politics but the opposition parties denied and they argued as prime minister is for strengthen position. Beginning the day onwards thousands are jailed and hundreds are died in Ethiopia.
For instance, in Malawi, “President Peter Mutharika declared a national State of Disaster on March 24, even though the country did not have a single confirmed case. Mutharika faces an election re-run on July 2 after his victory in 2019 was nullified by the Constitutional Court in February. He now faces a significant challenge to retain power, after the two main opposition parties -- which secured 55% of the vote last year formally launched a coalition…” (Malawi News,2020).
Multiple Side Sword and Africa
Yes, I, the author can say African poor is in the black valley and Africa become a Dark Continent. To protect citizen from COVID-19, shooting men and women by government have been seen in Africa. As example in Rwanda two men were shot and killed by government force when they refused to agree with lockdowns. Five people were killed in Kenya and its surprising that 13-year old boy was killed by police during enforcement operation. These security force enforcements will result popular unrest because for poor family the pandemic is hunger rather than COVID-19.
In Africa the primary and chief evils are poverty. Hunger, famine, drought and unemployment are the key catalyst for the birth of political instability for developing countries. Government budget could not cover and answer for the problems but declaring lockdown on population is like “copxoo irratti fanxoo”. Therefore, for Africa enforcement will leads to popular unrest. In south Africa eight death recorded due to security enforcement. If this action will continue without government subsidization for small holder families of the continent, the resistance may backfire.
Social Distancing and Stay-At-Home
Today, Covid-19 has already spread to most countries around the world and on the all African continent countries have reported confirmed cases. To overcome the spread of the pandemic, almost all countries are in a position of adopting restriction to total lock down legacy. Social distancing, social gatherings and stay at home were also other measures taken in this era. As government intervention taken into consideration national emergency or state emergency were declared on all Africans. Impact of these measures have their own impact on people’s life, democratic election and different institution. Economic resection is not uncommon for all Africans because of lockdowns and stay at home legacy. In a nutshell, election is the key to democracy that peoples elect the parts they want. However, during stay at home and lock downs peoples are in disturbed environment and no manifestation on behalf political party. In this critical period the time of election might be suspended to unknown time that will results political instability in sub-Saharan Africa like Ethiopia, Tanzania, Burundi and Uganda.
Witnesses from Global trade “Elections in ordinary times are critical building blocks for societies and a test for democracy with significant resources required in terms of time, finances and human labor. Voters, candidates, observers and electoral officials are all engaged in the electoral process, often in a highly charged context. In far too many cases, electoral periods have been marred by human rights violations undermining the holding of credible and peaceful elections. The Covid-19 pandemic poses an additional challenge to electoral processes in Africa and raises concerns for the holding of free, fair, transparent and peaceful elections, all while ensuring the safety of citizens. With the omnipresent threat of the pandemic, States are now being forced to evaluate whether they are in a position to hold credible elections, a component of democratic governance, and further of peace, security and development…” (Global Trade,2020)
Risks for Democratic Elections
In most sub-Saharan Africa elections are scheduled in 2020. Tradeoff between election and COVID-19 is the challenging hegemony. For decision maker it is difficult moment because election is must in arena of democracy and also attempting to confront the pandemic is the issue of the world therefore, giving priority is come to desk. In the countries where human capital is low, talking for life is like political statement. In Ethiopia Abiy government is in a crossroad where TPLF declare war on federal government, Conflict with Egypt on Great renaissance Dam (GERD), desert locust, COVID-19 and Economic resection are challenging the country. In this critical time most of opposition political allies in Ethiopia have been claiming for election while the life of the poor is under question. Given above example in Ethiopia which question should be answered for the peoples? So, its tradeoff
In Uganda the old president Musevini has been in power since 1986 and he reshuffle the country constitution to extend the age limit for terms of presidency. The normal election was scheduled in 2020 but due to COVID-19 disease the parliament has been scheduled for the first half of 2021. “Despite the real threat posed by the virus, elections should not be postponed to allow the regime to remain in power, which could, in turn, pose a threat to an environment conducive to the holding of credible and peaceful elections…”.
“In West Africa for instance, widely criticized parliamentary elections and a referendum on the Constitution was held in March 2020 in Guinea. The constitutional change ushered in by the referendum is believed to be a way for the President to seek additional presidential mandates despite the fact that he has already served twice, which is the legal limit stipulated by the Constitution. The referendum was held in a context of general unrest and widespread distrust in the government. Opposition parties boycotted the election, and independent election observers were absent. In Malawi, while the Supreme Court has affirmed that there will be a re-run of the Presidential election on 2 July 2020, the credibility of this election hangs in the balance as the country’s measures against Covid-19 continue to unfold. The country has been politically contested since the initial election which was annulled by the Malawi judiciary in February 2020. Fear is spreading that the state of emergency could imperil the organisation of this election and lead to more contestation” [Africa News, 2020)
SUGGESTED IDEA
Election or reducing the impact of pandemic?
Currently all eyes are looking on the novel corona virus disease. In another case democracy is also considered as critical issue in arena of politics. Therefore, we can understand that there is strong tradeoff between democratic election and the pandemic. In developing country disease is obvious and peoples are always be undermine the effect but politics is dangerous evil because of ethnic diversity and peoples are agitated to participate in politics rather than on social healthy.
What International Law saying?
Democratic elections are characterized by both human and democratic right. “Credible elections are characterized by fairness, transparency and freedom. The peaceful conduct of elections has also come to be considered as a component of democratic elections. The COVID-19 crisis has brought an additional component to the holding of democratic elections, which is the safe and secure nature of the elections, with regard to the health of the participants. The principles of fair, transparent, free, peaceful and safe elections are enshrined in several international and regional texts. Holding peaceful, transparent, free, and fair elections organized by independent institutions is one of the foundations of any rule of law and peaceful political life, not to mention a country’s development. It is undisputed that “democratic elections require an environment conducive to respect of human rights and fundamental freedoms, including freedom of peaceful assembly and association, freedom of opinion and expression and personal security and safety, all of which are essential conditions for the effective exercise of the right to vote. However, in times of public emergency, derogations and limitations to certain human rights and electoral obligations, including voting processes, may be permitted, based on the exceptional nature of the context and subject to strict conditions. In this regard, according to the United Nations (Center for Human Rights), ’Postponement of scheduled elections necessitated by public emergency may be permitted in certain limited circumstances, but only if and to the extent strictly required by the exigencies of the situation. Any such exigencies must comply with all the rigid international standards for such derogations and must not threaten democracy itself …)”.
Solution on Politics and election: FIDH saying…
Today I felt like sharing something what FIDH forward for the globe including Africans. “ Drissa Traoré, FIDH Secretary-General and member of the Mouvement ivoirien des droits humains To this end, FIDH calls upon: States with upcoming electoral deadlines: To ensure an environment conducive to credible, peaceful, and safe elections at all times, including during the Covid-19 pandemic by: Putting an end to human rights violations, including against representatives of civil society organisations; Ensuring that measures restricting individual rights and liberties under exceptional circumstances meet certain conditions such as necessity, proportionality, time limitation and non-discrimination; Ensuring the protection of the health of all elections’ participants, by taking appropriate measures before, during and after the elections; Refraining from making politically expedient but extra-legal decisions related to electoral process; Adopting an inclusive and consultative approach to elections, by including at most civil society in any decision-making related to elections; Providing information and communicating on election-related decisions, through the medias and civil society.
According to FIDH, The international community, including the African Union, the United Nations, and European Union, to: Stay abreast of the electoral situation and decisions in the context of Covid-19, and closely monitor situations at risk; Call on States to respect their national, regional and international obligations with regard to human rights and electoral processes; Publicly condemn States if human rights violations are committed before, during and after elections, and call on them to fight the impunity of those cases; Advance a holistic election monitoring approach through bodies such as the African Union Peace and Security Council, the African Peer Review Mechanism and the African Commission on Human and People Rights, to foster constructive dialogues among all stakeholders with regard to electoral preparations and investing in local-led observation efforts that are long-term in nature as opposed to focusing on the election day alone…”.