A new report by the UN Economic Commission for Africa has revealed that Eastern Africa’s growth is estimated to slow down by 0.6 percent in 2020 from 6.6 percent in 2019.
According to the report, the socio-economic impact of the Covid-19 pandemic has been very devastating to the region. Pre-Covid economic challenges have exacerbated, especially regards the region’s labour market which stands as the worst hit on the continent, with an estimated 38 million jobs lost as a result.
Owing to this development, more than 95 percent of countries in the region are struggling to close the year with positive growth. Though currently, only four countries are on track to experience positive growth levels in 2020. South Sudan comes first with 4.1 percent GDP growth, followed by Ethiopia and Tanzania with close to 2 percent and Kenya with 1 percent.
Furthermore, the Covid-19 pandemic has increased borrowing costs and debt vulnerabilities in the region. Till the pandemic began, only five countries (Burundi, Eritrea, Ethiopia, Kenya and Seychelles) with debt-to-GDP ratios exceeding 50 percent. However, the pandemic has pushed the debt-to-GDP ratio of a lot more countries beyond the 50 percent threshold.
Speaking at the Intergovernmental Committee of Senior Officials and Experts, the Director of ECA in Eastern Africa, Ms. Mama Keita said that, looking at the data, for six countries in the region, more than 10% of export revenue and primary income was spent on debt servicing payments.
Focusing on the social and health implications of the pandemic, the report highlights that, the virus spread in the region has been low as compared to the rest of Africa. Albeit, it has exposed the critical gaps in the health systems of countries in the region.
More specifically, the gaps in regional health systems pertains to the inadequacies, financing and quality of the health system. Therefore, countries in the region were ill-prepared for pandemic.
“Most Eastern Africa economies spend less than US$50 percapita on health, which is less than half of the African average of US$114,” based on the 2017 data.
With such little resources committed to public health, it is evident that countries in the region could have faced severe risks including high mortality rates, in case of an upsurge in the spread of the virus.
Additionally, how handicapped the health systems of the region are, is seen in the shortage of healthcare workers in most of the countries (with less than 3 medical doctors per 10 000 inhabitants); seven countries in the region are far below the African average of 1.8 beds, which is way below the EU rate of 5.1 beds per 1000 inhabitants.
The report therefore recommends that maintaining a right balance and sequence of health and economic and social policy interventions continues to be critical.
It also stresses the impact of COVID-19 on education, leading to school closures that affected 96 million learners in Eastern Africa. Ms Keita stated that while many governments have introduced remote teaching strategies, access to technologies such as the internet, television, and radio is limited in low-income countries, especially among poorest households.
The report also highlights the importance that policy makers need to attach to digitalization and digital trade. The pandemic has heightened the benefits of a digital economy and the challenge of a digital divide. Therefore governments should invest in extending access to the digital infrastructure across the region to narrow the divide.
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