The Covid-19 crisis, a turning point in social protection in Africa?

In its latest analysis of the world economic outlook, published on June 24, the International Monetary Fund highlights the extent of the economic crisis "unprecedented" due to the Covid-19 pandemic. Global gross domestic product, which grew by 2.9 1TP3Q in 2019, is expected to plunge by 4.9 1TP3Q in 2020, much more sharply than forecast in April. The drop would be on average 8 1TP3Q in advanced economies and 3 1TP3Q in emerging and developing countries. While China limits the damage (+1 1TP3Q), Latin America (-9.4 1TP3Q), the Middle East (-4.7 1TP3Q), India (-4.5 1TP3Q) and sub-Saharan Africa (-3.2 1TP3Q) are hard hit. In the latter region, marked by sustained demographic expansion, GDP per capita would fall by 5.4 1TP3Q: enough to push a whole segment of the population that was beginning to emerge back into poverty.

African governments have responded vigorously, in varying ways depending on the severity of the recession and, above all, the resources at their disposal. According to the World Bank, 39 million people on the continent are at risk of falling below the poverty line due to the health crisis, but the social assistance plans implemented by states could limit this disaster. They cover some 175 million Africans, or 13.1% of the population, according to the count published on June 26 by the consultancy firm Development Reimagined.[1]These plans consist mainly of direct cash transfers (two-thirds of beneficiaries), the payment or deferral of water and electricity bills (about a quarter) and the distribution of water and food (10 %). Their cost would be 53 billion dollars. (chart).

Situations vary greatly from one country to another. In ten states, social assistance plans cover between 32,000 and 51,000 (Egypt) of the population, compared to less than 2,000 in Kenya. South Africa alone accounts for half the total cost of these measures: it devotes more than 7,000 of its GDP to them, compared to less than 2,000 in Mali and Mauritania. It is true that this country accounts for a third of the continent's infections and a quarter of its deaths.

These figures should be taken with caution, as other sources provide significantly different estimates.[2]. But they reflect an undeniable acceleration in social protection spending: thus, according to the World Bank and UNICEF, the pandemic has led to an increase in the amount of cash transfers of around 60 % in Cameroon and 157 % in Egypt. The number of people benefiting from these measures has increased 11-fold in Nigeria and the Republic of Congo; it has almost quintupled in Madagascar and quadrupled in Guinea. Some countries have taken radically new measures, such as Togo with the Novissi scheme, which provides a basic allowance to all workers in the informal sector, via their mobile phones.[3]The inclusion of the informal sector is also a major innovation in the initiatives taken in many countries to alleviate the impact of Covid-19.

The question is whether the strengthening of social protection can be maintained if the crisis continues for a long time and even if the pandemic is contained – a prospect that is still distant, although Covid-19 is spreading more slowly in Africa than in other regions.[4]Whatever the situation, in fact, ambitious social policies will be necessary to continue to fight against poverty, which, before the spread of the virus, still affected 40,000 people south of the Sahara, and to boost demand in order to create jobs.

In this context, the proposal for a basic income, whether universal or targeted at the most vulnerable groups, is back on the table. For its most ardent proponents, such as Esther Duflo and Abhijit Banerjee, winners (with Michael Cremer) of the 2019 Nobel Prize in Economics, the current crisis makes this measure essential.[5]Its establishment of course comes up against financial obstacles, accentuated by the growing indebtedness of African states, but also prejudices and unfavorable political power relations, although many studies have largely documented the positive impact of monetary transfers for the community.[6] and that digital tools facilitate their implementation, as shown by the example of Togo cited above.

Social policies have several consequences for agriculture. An increase in cash transfers can reduce the risks borne by farmers, encourage investment, and increase agricultural production and income. However, their effect on restructuring and therefore on farm expansion is ambiguous: a basic allowance can slow the abandonment of agriculture or, on the contrary, accelerate it. In any case, the impact of agricultural policies also depends on the "safety nets" that those who work the land benefit from, or lack thereof, for their living conditions.

[1] Is more poverty in Africa an inevitable outcome of Covid19?, June 26, 2020, https://developmentreimagined.com/2020/06/26/is-africa-poverty-inevitable/

[2] Thus, according to the World Bank and UNICEF, cash transfers and in-kind aid implemented in sub-Saharan Africa in response to the Covid-19 pandemic only covered 5,100,000 of the population in mid-June (Social Protection and Jobs Responses to COVID-19: A Real Time Review of Country Measures, https://www.ugogentilini.net/wp-content/uploads/2020/06/SP-COVID-responses_June-12.pdf).

[3] Under the Novissi program, Togolese people aged over 18, working in the informal sector and able to prove that they have suffered a loss of income due to Covid-19, receive a monthly allowance (12,500 CFA francs or 18.75 euros for women, 10,500 CFA francs or 15.75 euros for men), intended to meet their basic needs (food, water, electricity, communication).

[4] According to the tally published by Development International on July 3, Africa accounts for less than 4 billion cases of Covid-19 and 2.5 billion deaths from the disease, despite being home to 17 billion of the world's population. Several reasons have been put forward to explain this situation (see "Slower spread, much lower mortality, in Africa, the coronavirus plays a singular role, The World Africa, June 29, 2020). But the pandemic continues to progress on the continent, particularly in South Africa and a few other countries.

[5] See their article published in The Guardian May 6, 2020, “Coronavirus is a crisis for the developing world, but here's why it doesn't need to be a catastrophe”.

[6] See in particular the report published by FAO and UNICEF in 2016, “From Evidence to Action. The Story of Cash Transfers and Impact Evaluation in Sub-Saharan Africa”, and the study published by these two organizations in 2017, “Myth-busting? Confronting Six Common Perceptions about Unconditional Cash Transfers as a Poverty Reduction Strategy in Africa”.