Africa may lose 25-30 million jobs in 2020 due to COVID-19: report

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A view shows a busy street as businesses close ahead of the lockdown restrictions set by the government to prevent the rampant spread of the coronavirus disease (COVID-19), in Eastleigh district of Nairobi, Kenya May 6, 2020. REUTERS/Thomas Mukoya
FILE PHOTO: A view shows a busy street as businesses close ahead of the lockdown restrictions set by the government to prevent the rampant spread of the coronavirus disease in Eastleigh district of Nairobi, Kenya. REUTERS/Thomas Mukoya

Africa may lose between 25 and 30 million jobs this year depending on the level of economic contraction due to the effects of the COVID-19 pandemic, according to a report released by the African Development Bank (AfDB).

The report, titled African Economic Outlook (AEO) 2020 Supplement, said that a potential 1.7 percent contraction would result in a decline by 24.6 million jobs in 2020 while a contraction of 3.4 percent, the “worst-case scenario”, would see up to 30 million jobs being lost.

“The brunt will be mostly felt by the working poor, who account for almost half of the employed,” the report said.

Despite the pandemic not yet peaking in Africa, several governments, most notably South Africa, had implemented strict measures to contain the spread of the virus early on. However, the same governments subsequently came under heavy public pressure to relax the very same measures due to the economic hardships resulting from their implementation.

Algeria, Egypt, Ghana, Kenya, Senegal and South Africa are just some of the countries that have instituted gradual re-opening of their economies to allow citizens to try and make ends meet and ward off the prospect of long-term damage to their economies.

However, the report went on to say that the effects of economic disruption would be experienced beyond the circles of the working poor and will likely be felt for longer than anticipated.

“And the crisis would also affect the nature of surviving jobs, since wages and working hours for those in the formal sector could be downgraded, and the number of workers switching to informal sector jobs could increase as a survival strategy to maintain incomes in the face of lockdowns and restrictions,” it added.

The COVID-19 pandemic has affected several economic sectors in the continent since its onset. Trade and supply chains have been disrupted while some sectors, such as aviation and hospitality, have been hard hit resulting in massive losses of jobs and revenue.

The report also pointed out that there was a significant variation on the impact of the pandemic and prospects for recovery across various regions and economies. It said that East Africa could be the one to recover quickly, while Southern Africa could be the hardest hit region this year.

Closely connected to job losses, the report further warned that millions of Africans could be dragged into poverty this year if poor economic conditions persist. It singled out Nigeria, Africa’s most populous nation and largest economy, and the mineral-rich Democratic Republic of Congo as countries with potential to record the worst numbers.

“Nigeria and the DRC, two of Africa’s most populous countries, could record the largest increases in the number of people in extreme pov­erty – 8.5 and 2.7 million respectively in the baseline scenario in 2020, and 11.5 and 3.4 million in the worst-case scenario.”

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