By Chioma Obinna
A new report released Wednesday at the ongoing Bloomberg New Economy Forum in Singapore has revealed that the COVID-19 pandemic has further pushed an estimated 30 million people in sub-Saharan Africa into extreme poverty, wiping out more than five years of progress.
The report noted that while some ground will be made up as economies across the continent recover, it will still not be enough to meet the United Nations’ Sustainable Development Goal, SDG, of eradicating poverty by 2030 – a target that was already a stretch before the pandemic hit.
The Bloomberg Economics Special Report entitled: “Long COVID: Jobs, Prices and Growth in the Enduring Pandemic focused on the challenges the pandemic poses to growth, inflation and development globally.
A piece titled Half a Billion in Poverty and Counting: “How COVID Derailed Africa’s Development Goals” models how a lost year of growth has affected poverty reduction goals in Africa.
The turn of the century saw Africa’s economy on an upward trajectory due to reduced conflict, allowing for better economic policies and increased macroeconomic stability.
The International Monetary Fund and World Bank’s Heavily Indebted Poor Country Initiative in the early 2000s led to a substantial reduction in debt levels, freeing up domestic resources and improving donor relations. Increased trade and buoyant commodity prices also played a role, with GDP per capita in resource-rich countries growing twice as fast.
This resulted in better living standards for the populations, people became healthier, access to basic services such as water and sanitation improved, school enrolment increased, and the share of people living below the World Bank’s extreme poverty line of $1.90 per day fell from 58 percent in 2000 to 42 percent by 2015.
From 2016, growth has faltered. The slowdown started a year after the adoption of the Sustainable Development Goals — the universal call to eradicate poverty by 2030 through progress on 17 integrated goals that range from health, education, inequality and climate change. Sub-Saharan Africa continues to lag behind on most of the goals.
Most notable is the lag on poverty reduction; before the pandemic in 2019, Africa had more than 60 percent of the world’s 700 million poor.
According to the report, the COVID-19 pandemic threatened to throw the region further behind.
In 2020, sub-Saharan Africa plunged into its first recession in more than 25 years, erasing at least five years of progress in fighting poverty.
Economists forecast that lost ground won’t be recovered until 2024 when the expected per capita output to return to pre-pandemic levels.
The report also pointed out that sluggish vaccine rollout means that many countries will continue to deal with virus outbreaks that delay the safe reopening of their economies.
“Rising debt service costs will continue to squeeze out much-needed development spending even when the virus effects fade.
“The persistent impact of the pandemic on incomes means the poverty rate would translate into almost 25 million more people living in poverty, compared with pre-COVID estimates, “the report stated.
The report further noted that to make notable progress on poverty eradication, Africa will require immense support from the international community given the region’s limited resources. To address this gap, funding from official creditors including the IMF, the largest providers of external debt, remain crucial for sub-Saharan Africa. Over the past 20 years, China has become one of the largest creditors on the continent and has seen its share of debt owed rise from about 40 per cent in 2010 to more than 63 per cent at the end of 2019.