Thirty-nine million Africans may slip into extreme poverty this year – AfDB

THE African Development Bank (AfDB) has revealed that an estimated 39 million Africans could slip into extreme poverty this year, due to the Covid-19 pandemic, after 30 million were pushed into extreme poverty in 2020.

This was made known on Friday in the AfDB’s Economic Outlook 2021, titled “Africa’s growth prospects bullish despite COVID-19 constraints and debt burden.”

“The outbreak of the novel coronavirus in December 2019 has taken a massive toll on Africa, hitting tourism-dependent economies, oil-exporting economies and other-resource intensive economies the hardest, as well as deepening inequality,” the Bank said.

The AfDB added that 2021’s theme “From Debt Resolution to Growth: The Road Ahead for Africa”, highlights the impact of Covid-19 and government debt, offering mitigating measures to governments and policymakers.

It warned that despite an expected economic recovery for African nations in 2021, there was a need to deal with the threat of increasing poverty as countries with lower HDI pose larger threats.

“An estimated 39 million Africans could possibly slip into extreme poverty this year, following about 30 million who were pushed into extreme poverty in 2020 as a result of the pandemic.

“The report finds that populations with lower levels of education, few assets, and working in informal jobs are the most affected and must be protected,” it said.

The Bank further warned that inaction from stakeholders will incur a high cost as people living on less than $1.90 per day rises to 465.3 million,  which is 34.4% of Africa’s population.

AfDB however recommended that Africa needs a multi-pronged policy approach to addressing the pandemic. This approach includes:

• Supporting the health sector with resources for health care systems to cope with the virus and other preventable diseases;
• Monetary and fiscal support to underpin economic recovery;
• Expanding social safety nets and making growth more equitable;
• Minimizing the long-term implications of the pandemic on human capital accumulation by opening schools and
• Scaling up active labour market policies to retool the labour force for the future of work through digitalization, industrialization, and diversification.

The President of the AfDB, Akinwumi A Adesina, stated that Africa needs much larger credit support and relief, and urged that private creditors need to be implemented as a solution.

He said, “We need to address Africa’s debt and development finance challenges in partnership with the international community. Much larger financial support is needed, and private sector creditors need to be part of the solution. The time for one last debt relief drive for Africa is now.”

It can be recalled that the World Bank had in October 2020 warned that as many as 150 million people would fall into extreme poverty by 2021, due to the economic effect of the coronavirus pandemic.