May 16, 2020

Post COVID-19 and Africa’s informal sector: The new normal


By Abraham John Onoja

The outbreak of the Novel Coronavirus disease (COVID-19) in China has extremely changed the world as it has turned into a major pandemic disease and has affected over millions around the world regardless of their geographical location, age, race, gender, differences.

While this crisis is first and foremost a public health issue, which has claimed the lives of thousands of people worldwide and still counting, the economy would no doubt be overwhelming and is likely to create major economic meltdown in both the formal and informal sectors.

According to Brookings Institute, Africa is the world’s last frontier in the fight against extreme poverty where one in three Africans−422 million people−live below the global poverty line.

READ ALSO: South African economy out of recession by 2.5 above Nigeria – Statistician-General

Therefore, this fact brings to fore, the alarming consequences of COVID-19 in the economic sectors which will increase the income gap backward rather than reduce the number of people living below the global poverty line.

The Informal Sector constitutes arguably the largest employer of labor in the African Continent.

The International Labour Organization estimates that more than 66% of total employment in Sub-Saharan African is in the informal sector.

With a pervasive informal sector, city governments have been struggling with how best to respond to the Covid19 pandemic.

Furthermore, informal enterprises are typically characterized by low wages and non-exportable goods and services. This sector provides crucial livelihoods to the most vulnerable of the urban poor.

The spread of COVID 19 poses a big threat to small scale businesses which serve as a major source of livelihood for many Africans. It is important that, just as Africa is working towards combating the spread of the virus, the government should help to support this vital yet often excluded segment of the economy.

The informal sector is very much essential for the welfare of the people living in the local communities and for the expansion of the economy at large. As Africa’s informal sector provides about 80% of employment and contributes over 50% GDP, it is reason enough that this crucial sector cannot be allowed to be jeopardized.

Taking Nigeria to be the case study, the wave of the pandemic is showing no sign of reduction unless a permanent solution is found.

However, looking on the bright side, there is a possibility that a vaccine could be found sooner or later to counter with this unpleasant enemy.

But just until then, how will we as a country adjust to the “new normal”, that is life after COVID 19 as the experts who used this terminology explained that life, as it was before, will not come back to normal for some time to come. Let’s take a few instances.

One major normal which is of general importance that can have a generational impact on our livelihood is the loss of jobs. Yes, our ways of making ends meet have been threatened, jeopardized and the center can no longer hold. Many people would be rendered jobless as all economic activities the world over, have slowed down.

Those who will be hit the hardest are the, as already mentioned small-scale business who may find it challenging to adapt to the new normal of doing business via virtual means, etc.

The small-scale business is also employers of labour, going down means their employees will suffer the same loss with them.

Amongst the unemployed, the hard-hit is the daily wage workers whose livelihoods are based on their daily income.

Therefore, a lot of people will suffer unemployment at this time, and paying bills such as house rent bills, food bills, school bills will become a serious threat.

Another new normal is that classes and lessons will have to be done online, and this could be the new pattern for some time to come.

This will pose major challenges for parents who do not have the resources to acquire these gadgets or even buy the data required for their wards/children to participate in online classes.

This new normal is also applicable to post-secondary students, who have a higher need for gadgets and data to participate in the online classes.

By this time in the old normal, schools have begun a new term. Being the third term in which promotional exams are done, both parents and pupils will be up and doing to ensure preparations in order to secure the promotion.

Most especially those preparing to take examinations to secure admission into the universities

The question posed here is, how can the government help in reducing the burden of both the parents and the students who are on lockdown right now and can’t make ends meet talk less of spending the little resources being managed this period to acquire these gadgets or even data, as we are all aware the data rate in our country is high, unlike in most countries where data is cheap or even free.

Can the government help in reducing the data rates in order to reduce the burden on the parents and students?

With the wave of the pandemic being on the rise, so many countries have moved away from multilateralism and have retreated into fending for themselves with several measures to protect their own people and economies, regardless of the effects on the rest of the world which has led to certain restrictions.

This restriction could also be the new normal, as we are left with the questions of what if? What if the COVID 19 pandemic continues in a second wave, with borders still shut, food importation restricted, what if we can no longer travel out for medical attention and must rely

on our hospitals here? Talk less of education, what if we can no longer travel out to study

abroad and must rely on our educational system here? We can always no longer be dependent on the world for everything and anything.

For a country of over 200 million people, we cannot continue to keep ignoring the dangers that lie ahead if we do not begin to depend largely on what we produce locally, because the security and well-being of our nation are solely based on building a productive and well-diversified economy.

We have no clear vision of what the world will look like after the pandemic is over, therefore as a nation, we need to seize the opportunities of the “new normal” and make the best out of it.

As much as all these new developments seem troubling, it is a clear opportunity to work things out for a better future ahead.

READ ALSO: Coronavirus could infect more than 200 million in Africa ―WHO modelling

We must look inwards as a nation and guarantee food security, high quality, and affordable healthcare for all social class and pioneering education for our people. We can transform Nigeria into a modern, sophisticated and self-sufficient economy in which we don’t have to be dependent on other countries for everything and can thrive on our own, protecting the poor and vulnerable and being able to compete with other strategic sectors internationally.

To achieve this goal, what needs to be done include:

  1. Supporting both the smallholder and large-scale agriculture production.
  2. Creating a better educational system that will enable creativity and reasoning in order to prepare our children for the world tomorrow.
  3. Creating more factories, storages, and logistics companies which also serve as a way of creating job opportunities for the youths.
  4. Developing initiative programmed to help support or promote youths who want to acquire skills and take it up as a profession.
  5. Providing security to the poor and the vulnerable and developing the policies that bring financial services to them.
  6. Developing a standard and trusted health care system to keep Nigerians healthy irrespective of social class.
  7. Creating easy access to cheap and long-term credit for SMEs and large corporates.
  8. Creating a reliable power supply that can engender industrial activities.
  9. Developing venture capitalists for nurturing new ideas and propagate Nigerian businesses to compete globally. This is the opportunity to create a better Nigeria and do the needful to become a better country.

The COVID-19 may have thrown us all into a crisis of unprecedented proportions but we can still make the best out of it. However, mismanagement of these challenges could leave us to suffer untold hardship for some time to come.