[CAVIE –ACCI] The COVID-19 virus is taking hold across the African continent and the situation is evolving quickly. Many African governments have put in place measures to prevent the spread of the pandemic.
But at the same time, disruptions to supply chains and domestic production combined with weak external demand, the sharp fall in commodity prices, as well as disruption in key service sectors such as tourism, are putting people’s jobs and livelihoods at risk.
The full brunt of the pandemic has yet to be felt. Even at this early stage, the COVID-19 crisis is taking a toll on African lives and economies, pushing the region into its first recession in 25 years. Recent estimates show that COVID-19 could push 40 to 60 million people globally into extreme poverty, 27 million of whom live in Sub-Saharan Africa. The immediate impacts are being felt the hardest in urban areas and in the informal sector, which employs around 80% of the population in low income countries.
Over the next 15 months, the World Bank Group will be making up to $160 billion in financing available, tailored to the health, economic and social shocks that countries are facing. This includes up to $50 billion for African countries.
In Africa, the World Bank’s response is focused around three main areas, simultaneously: saving lives, protecting livelihoods and securing the future.
The World Bank has taken fast action to help African countries strengthen their pandemic response and health care systems. Nearly a billion dollars for the immediate response to the COVID-19 pandemic has been approved in Africa, through a combination of new operations and redeployment of existing resources. Together, these interventions are reaching 42 countries in the region.
As of May 29, the first set of emergency health projects in 27 African countries (amounting to a total of $471 million) have been launched and are focused on:
- Strengthening prevention and limiting local transmission through improved surveillance systems and training of front-line responders;
- Expanding testing and providing medical equipment such as gloves, masks, and portable ventilators;
- Building or expanding healthcare facilities;
- Building systems for real-time community-based tracing;
- Scaling-up communications and messages to the communities on best practices;
- Supporting vulnerable populations affected by COVID-19; and
- Strengthening coordination and collaboration by supporting regional institutions such as the Africa Center for Disease Control (CDC) and the West African Health Organization (WAHO).
In addition, the World Bank is redeploying existing resources in the portfolio of health, urban and resilience projects including: $350 million through the emergency components of existing projects (CERCs) in 17 countries. Additional resources are being leveraged through project restructuring and existing health operations.
Regional operations have played a crucial role in the response. Over $150 million was mobilized through the existing Regional Disease Surveillance Systems Enhancement Program (REDISSE) to support 13 countries and the West African Health Organization (WAHO) with entry-point surveillance, reinforced laboratory testing capacity, infection prevention and control, essential medical equipment and materials, risk communication, and cross-border coordination. The Africa Centers for Disease Control also received support to enhance cross-border collaboration on disease surveillance and response.
In the Seychelles, Cabo Verde, Kenya, Malawi and other countries, Catastrophe Deferred Drawdowns (CAT DDOs) have been triggered disbursing more than $160 million or are being prepared in response to the health emergency and to strengthen preparedness and long-term disaster and climate resilience.
Several Sub-Saharan African countries have also prioritized water, sanitation and hygiene in health facilities and access to water in urban areas as part of their health response.
To protect the poor and vulnerable and respond to the impact on their livelihoods, the Bank is helping African countries to:
Scale up and adapt social safety net programs: more than 45 countries have social safety net programs in place to address chronic poverty through cash transfers and support to extremely poor households. By putting cash into poor people’s pockets, social protection can help sustain local economic activities especially in essential sectors like food.
Protect jobs: Micro, Small and Medium-Sized Enterprises (MSMEs) provide the bulk of jobs and are being particularly hit across the region where informal firms dominate employment. Public works and urban programs are also being launched or scaled up to facilitate job creation in low income communities. In Ghana, the Greater Accra Resilient and Integrated Development Project will accelerate slum upgrading activities and help generate around 60,000 workdays. Similar projects are underway in Ethiopia, Kenya and Senegal.
Support to the private sector is critical to containing the economic crisis and supporting recovery, so the World Bank Group’s private sector arm – International Finance Corporation – is working to help the private sector navigate the pandemic and recover from the economic and financial impact of the crisis. This includes mobilizing IFC’s global $8 billion fast track facility to initially support existing clients in the region affected by the outbreak. IFC is also providing advisory support to clients including financial institutions to manage risk during this period, to apparel manufacturers to help them transition to produce medical personal protective equipment (PPE), and to the tourism industry to find ways to navigate this difficult period.
Ensure food security by supporting farmers to expand agricultural production to meet the needs of local communities and by sustaining food supply chains. For instance, in Côte d’Ivoire an allocation of US$70 million for this COVID-19 response plan will provide income to 320,000 farmers and safeguard 5,000 jobs in local processing units. In Chad, cereal banks are being set up, and seeds and food kits are being distributed to help poor families not go hungry during the crisis. In Kenya, digital technologies are being used through the partnerships with 15 AgTech startups to facilitate the delivery of inputs, soil testing, crop insurance and other services. In Rwanda, about 38,000 farmer households are benefiting from the Sustainable Agricultural Intensification for Improved Livelihoods, Food Security, and Nutrition Project.
Securing the future
While addressing the immediate impacts of the COVID-19 pandemic, the focus on recovery remains central to the Bank’s response and support to countries. Over 20 countries in Sub-Saharan Africa have requested development policy operations or budget support from the Bank to assist them to manage the fiscal impacts of the pandemic. These operations are focusing on supporting governments to mitigate the effects of the COVID crisis, and at the same time promoting reforms that will create the conditions for economic recovery.
Securing the future also involves maintaining critical government services and service delivery, particularly in nutrition and education, as well as building health systems and water and sanitation. Energy services are also key in fighting pandemics – from powering healthcare facilities and supplying clean water for essential hygiene, to enabling communications and IT services that connect people while maintaining social distancing. Efforts to increase investments in solar, wind and other sustainable energy sources are underway and will be key to ensure economic recovery.
Digital technologies can be game changers in the crisis, and we are encouraging more investment not just in digital infrastructure and platforms, but also in skill and in creating an enabling regulatory environment.
The World Bank Group and the IMF called on official bilateral creditors to grant a debt suspension to countries eligible for International Development Association (IDA) financing – the world’s poorest countries – to help provide a buffer in their efforts to respond to the COVID-19 pandemic. During the Spring Meetings, the Governors of the World Bank and IMF and the Finance Ministers of the G7 and G20 supported a May 1 start date. This is an important part of the global response to soften the impact of COVID-19 on Africa’s poorest and most vulnerable people, and to ensure that governments have the resources to respond swiftly and decisively to protect lives and livelihoods. Africa paid US$35.8 billion in total debt service in 2018, of which US$9.4 billion was paid to official bilateral creditors.
As the social and economic impacts of COVID-19 are still unfolding across the region, having real time data to inform policy choices is critical. The Bank is scaling up its high frequency monitoring of key economic indicators and impacts on firms, households, and food prices, to assist governments to monitor and respond effectively to the crisis.