Lack of systemic resilience to shocks has exposed Africa’s vulnerability to the COVID-19 pandemic.
Years of underinvestment has left the health system incapable of handling needed testing, emergencies and care. Also a significant proportion (45%) of the region’s population live a hand-to-mouth existence (IGC 2020) which means there is a lack of personal cautionary savings; functional credit system; curtailed household survival during containment based on social distancing; and a lack of fiscal space and mature financial markets constrained resource mobilisation to fund required interventions and safety nets.
While there is some significant diversity in the type and magnitude of responses to the pandemic across African countries, overall the region has had a much more muted economic response (stimulus about 3% of GDP) compared to double digit responses in OECD and some key emerging economies. IMF projects a much slower recovery for the region relative to the world even when the region’s growth collapse in 2020 is much smaller.
The responses to the pandemic were made against the background of (i) high levels of indebtedness, which closed doors of access to capital market; (ii) a reverse flow of private capital; (iii) collapse of remittances) and (iv) tight aid resource envelopes allowing only for reprogramming rather than addition of resources.
Join Professor Benno Ndulu, former Governor of the Central Bank of Tanzania and Professor Stefan Dercon, Lead Reseacher on the Oxford Martin Programme on African Governance, chaired by Professor Ricardo Soares de Oliveira, Lead Reseacher on the Oxford Martin Programme on African Governance, where they will discuss the problems and the role that digital technology can play in coping mechanisms during crises, the rationale for acceleration and broadening of digitalisation of entire economies – with inclusion as its pivotal target.
To register and watch this talk live: www.crowdcast.io/e/covid19-in-africa