Publication: A Tale of Africa Today: Balancing the Lives and Livelihoods of Informal Workers During the COVID-19 Pandemic
Loading...
Date
2020-10
ISSN
Published
2020-10
Author(s)
Editor(s)
Abstract
In Sub-Saharan Africa (SSA), more than 80 percent of workers find their livelihoods in the informal sector. They are artisans and shop owners, fishers and divers, tailors and weavers, truck drivers and market sellers, among many other informal jobs. In the era of the COVID-19 (coronavirus) pandemic, saving lives and protecting livelihoods are both deeply challenging in SSA countries with high informality and almost no social protection. Informal workers and their families are most vulnerable to the disease, as they toil in crowded bazaars and busy streets. Moreover, informal workers are typically poor and cannot stockpile food or cash for a long lockdown. Strict containment measures directly jeopardize their income, their livelihoods, and their lives. The analysis confirms that higher rates of informal employment (as a fraction of total employment) are associated with higher rates of COVID-19 infection or disease spread. Not surprisingly, countries with relatively larger populations are also more likely to experience higher rates of infection. Given the adverse socioeconomic effects of COVID-19 containment on informal businesses and workers lacking social protection, countries should take proactive steps to curb the spread of infections, treat affected people, and at the same time provide social safety nets and economic relief for informal workers and businesses.
Link to Data Set
Citation
“Nguimkeu, Pierre; Okou, Cedric. 2020. A Tale of Africa Today: Balancing the Lives and Livelihoods of Informal Workers During the COVID-19 Pandemic. Africa Knowledge in Time Policy Brief;. © World Bank. http://hdl.handle.net/10986/34582 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Costs and Trade-Offs in the Fight Against the COVID-19 Pandemic(World Bank, Washington, DC, 2020-05-15)The world is experiencing the worst pandemic crisis in one hundred years. By mid-April 2020, more than 80 percent of countries around the world had imposed strict containment and mitigation measures to control the spread of the disease. The economic fallout has been immense, with dire consequences for poverty and welfare, particularly in developing countries. This Brief first documents the global economic contraction and its potential impact on developing countries regarding macroeconomic performance, poverty rates, and incomes of the poor and vulnerable. It then argues that the pandemic crisis may hurt low- and middle-income countries disproportionately because most of them lack the resources and capacity to deal with a systemic shock of this nature. Their large informal sectors, limited fiscal space, and poor governance make developing countries particularly vulnerable to the pandemic and the measures to contain it. Next, the Brief reviews recent epidemiological and macroeconomic modelling and evidence on the costs and benefits of different mitigation and suppression strategies. It explores how these cost-benefit considerations vary across countries at different income levels. The Brief argues that, having more limited resources and capabilities but also younger populations, developing countries face different trade-offs in their fight against COVID-19 (coronavirus)than advanced countries do. For developing countries, the trade-off is not just between lives and the economy; rather, the challenge is preserving lives and avoiding crushed livelihoods. Different trade-offs call for context-specific strategies. For countries with older populations and higher incomes, more radical suppression measures may be optimal; while for poorer, younger countries, more moderate measures may be best. Having different trade-offs, however, provides no grounds for complacency for developing countries. The Brief concludes that the goal of saving lives and livelihoods is possible with economic and public health policies tailored to the reality of developing countries. Since "smart" mitigation strategies (such as shielding the vulnerable and identifying and isolating the infected) pose substantial challenges for implementation, a combination of ingenuity for adaptation, renewed effort by national authorities, and support of the international community is needed. The lockdowns may be easing, but the fight against the pandemic has not been won yet. People and economies will remain vulnerable until a vaccine or treatment are developed. The challenge in the next few months will be to revive the economy while mitigating new waves of infection.Publication Implications of Major Adverse Events on Productivity(World Bank, Washington, DC, 2020-09)Since 2000, there have been three major global slowdowns, with the latest and most pronounced episode triggered by the COVID-19 pandemic. At the same time, many countries have faced major adverse events including natural disasters, wars, and financial crises, all of which can lead to long-lasting harm to productivity. Wars inflict particularly severe damage to productivity, while financial crises also lead to substantial losses, especially accompanied by a rapid build-up of debt. The greater frequency of natural disasters, especially climate disasters, means that they have the largest aggregate impact on productivity, as natural disasters have occurred most often and their frequency has doubled since 2000. Global adverse events can have large sustained negative effects on productivity through dislocating labor, tightening of credit, disrupting value chains, and decreasing innovation. Policies to counter the negative consequences of adverse shocks include accommodative fiscal policies, such as reconstruction spending on resilient infrastructure; transparent governance; efficient use of relief funds; as well as growth-friendly structural reforms. Appropriate policies and regulations concerning finance, construction, and environmental protection can help reduce the frequency of adverse shocks.Publication The COVID-19 Impact on Livelihoods and Poverty in Sri Lanka(World Bank, Washington, DC, 2021)The Coronavirus (COVID-19) crisis has dealt a significant shock to Sri Lanka’s economy and people. This note examines the expected impact on poverty and inequality amid widespread job and earnings losses. While poverty was relatively low in Sri Lanka prior to the pandemic, pre-existing vulnerabilities were high, partly owing to high levels of informality. Many workers do not have access to employment protection or other job-related social protection benefits, making them vulnerable during times of economic crisis. Livelihoods support programs and various relief measures implemented by the government over the course of the pandemic are expected to have mitigated the labor market shock. Inequality is expected to increase in the short run because of the unequal distribution of the shock. Moreover, reduced social mobility as a consequence of widening disparities in access to education for example could increase inequality in the long term. Policy measures could aim to strike a balance between those that support a resilient recovery and those that aim to include the most vulnerable in the recovery process. Achieving this balance will help reverse the impact of the pandemic and mitigate its consequences for inequality. Shifting toward a more adaptive social protection system would allow much needed support to be scaled up quickly and effectively in times of crisis.Publication Ethiopia Economic Update, No. 8(World Bank, Washington, DC, 2021-03)COVID-19 has severely affected Ethiopia, weakening its economic performance. Ethiopia has experienced a collapse in external demand since April 2020 due to COVID-19. While merchandise exports, excluding gold, increased by 5.8 percent overall in FY20, they declined by 4.1 percent during July-December 2020 (year-on-year). Exports of garments, textiles, and fruits and vegetables have been particularly hit since the onset of the pandemic. Both exports and imports of services, dominated by air transport, recorded negative growth in FY20. Remittances dropped by 10 percent in FY20, although they have rebounded during the first half of FY21. Merchandise imports, which were already on decline prior to COVID-19, dropped by 8 percent in FY20, contributing to the narrowing of the current account balance, estimated at about 4 percent of GDP. Meanwhile, foreign direct investment has been severely hit, with inflows declining by 20 percent in FY20, contributing to weakening reserve levels. Despite the severe impacts, Ethiopia grew at 6.1 percent in FY20, as the impact of the COVID-19 pandemic took place largely in the final quarter of the fiscal year. Phone survey data suggests that both firm revenue and household income are significantly depressed, which points to weakening domestic demand. The adverse impact of the COVID-19 pandemic on economic activity is expected to continue in FY21, prior to experiencing a rebound in FY22 and beyond. Further action is needed to ensure a resilient economic recovery. The Government of Ethiopia is to be commended for having kept advancing its Homegrown Economic Reform Agenda despite COVID-19. Implementing some complementary reforms will be key to ensuring a resilient recovery in the new COVID-19 normal.Publication Regional Initiative in Support of the Horn of Africa(Washington, DC, 2014-10-23)The Horn of Africa (HoA) region has many security and development challenges whose origins and consequences go well beyond the borders of individual countries. It is also a region with many human assets and resource endowments, and some of the most dynamic economies in the world. Despite its numerous challenges, the Horn of Africa offers significant potential to address cross-border issues that can help transform its countries and the region. This paper describes a World Bank Group (WBG) initiative to address some of the key drivers of instability in the HoA and promote development in the area. The initiative is intended to build on and complement the large country and regional programs the WBG and other partners are already supporting in the HoA, bringing value by addressing a number of issues which demand cross-border collaborative solutions to reducing fragility and instability. The central rationale to this initiative is that WBG cannot effectively support the elimination of extreme poverty and boost shared prosperity in the region without engaging more intensively and creatively in addressing very difficult development problems, including those linked to insecurity and vulnerability. The WBG package totals $1.8 billion to be committed over approximately 24 months, with about $600 million investments from the International Finance Corporation (IFC) and an estimated $200 million in guarantees from the Multilateral Guarantee Investment Agency (MIGA). The initiative builds on two previous programs aimed at similar issues in the Great Lakes Region (May 2013) and the Sahel (November 2013), efforts that recognize the link between security and development, and the importance of giving hope to vulnerable citizens, including women and children, that they can overcome poverty and deprivation.
Users also downloaded
Showing related downloaded files
Publication Poverty and Shared Prosperity 2018(Washington, DC: World Bank, 2018-10-17)The World Bank Group has two overarching goals: End extreme poverty by 2030 and promote shared prosperity by boosting the incomes of the bottom 40 percent of the population in each economy. As this year’s Poverty and Shared Prosperity report documents, the world continues to make progress toward these goals. In 2015, approximately one-tenth of the world’s population lived in extreme poverty, and the incomes of the bottom 40 percent rose in 77 percent of economies studied. But success cannot be taken for granted. Poverty remains high in Sub- Saharan Africa, as well as in fragile and conflict-affected states. At the same time, most of the world’s poor now live in middle-income countries, which tend to have higher national poverty lines. This year’s report tracks poverty comparisons at two higher poverty thresholds—$3.20 and $5.50 per day—which are typical of standards in lower- and upper-middle-income countries. In addition, the report introduces a societal poverty line based on each economy’s median income or consumption. Poverty and Shared Prosperity 2018: Piecing Together the Poverty Puzzle also recognizes that poverty is not only about income and consumption—and it introduces a multidimensional poverty measure that adds other factors, such as access to education, electricity, drinking water, and sanitation. It also explores how inequality within households could affect the global profile of the poor. All these additional pieces enrich our understanding of the poverty puzzle, bringing us closer to solving it. For more information, please visit worldbank.org/PSPPublication The African Continental Free Trade Area(Washington, DC: World Bank, 2020-07-27)The African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world, measured by the number of countries participating. The pact will connect 1.3 billion people across 55 countries with a combined GDP valued at $3.4 trillion. It has the potential to lift 30 million people out of extreme poverty by 2035. But achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures. The scope of the agreement is considerable. It will reduce tariffs among member countries and cover policy areas, such as trade facilitation and services, as well as regulatory measures, such as sanitary standards and technical barriers to trade. It will complement existing subregional economic communities and trade agreements by offering a continent-wide regulatory framework and by regulating policy areas—such as investment and intellectual property rights protection—that have not been covered in most subregional agreements. The African Continental Free Trade Area: Economic and Distributional Effects quantifies the long-term implications of the agreement for growth, trade, poverty reduction, and employment. Its analysis goes beyond that in previous studies that have largely focused on tariff and nontariff barriers in goods—by including the effects of services and trade facilitation measures, as well as the distributional impacts on poverty, employment, and wages of female and male workers. It is designed to guide policy makers as they develop and implement the extensive range of reforms needed to realize the substantial rewards that the agreement offers. The analysis shows that full implementation of AfCFTA could boost income by 7 percent, or nearly $450 billion, in 2014 prices and market exchange rates. The agreement would also significantly expand African trade—particularly intraregional trade in manufacturing. In addition, it would increase employment opportunities and wages for unskilled workers and help close the wage gap between men and women.Publication Doing Business 2020(Washington, DC: World Bank, 2020)Doing Business 2020 is the 17th in a series of annual studies investigating the regulations that enhance business activity and those that constrain it. It provides quantitative indicators covering 12 areas of the business environment in 190 economies. The goal of the Doing Business series is to provide objective data for use by governments in designing sound business regulatory policies and to encourage research on the important dimensions of the regulatory environment for firms.Publication Poverty and Shared Prosperity 2020(Washington, DC: World Bank, 2020-10-07)Previous Poverty and Shared Prosperity Reports have conveyed the difficult message that the world is not on track to meet the global goal of reducing extreme poverty to 3 percent by 2030. This edition brings the unwelcome news that COVID-19, along with conflict and climate change, has not merely slowed global poverty reduction but reversed it for first time in over twenty years. With COVID-19 predicted to push up to 100 million additional people into extreme poverty in 2020, trends in global poverty rates will be set back at least three years over the next decade. Today, 40 percent of the global poor live in fragile or conflict-affected situations, a share that could reach two-thirds by 2030. Multiple effects of climate change could drive an estimated 65 to 129 million people into poverty in the same period. “Reversing the reversal” will require responding effectively to COVID-19, conflict, and climate change while not losing focus on the challenges that most poor people continue to face most of the time. Though these are distinctive types of challenges, there is much to be learned from the initial response to COVID-19 that has broader implications for development policy and practice, just as decades of addressing more familiar development challenges yield insights that can inform responses to today’s unfamiliar but daunting ones. Solving novel problems requires rapid learning, open cooperation, and strategic coordination by everyone: from political leaders and scientists to practitioners and citizens.Publication Poverty and Shared Prosperity 2016(Washington, DC: World Bank, 2016-10-02)Poverty and Shared Prosperity 2016 is the first of an annual flagship report that will inform a global audience comprising development practitioners, policy makers, researchers, advocates, and citizens in general with the latest and most accurate estimates on trends in global poverty and shared prosperity. This edition will also document trends in inequality and identify recent country experiences that have been successful in reducing inequalities, provide key lessons from those experiences, and synthesize the rigorous evidence on public policies that can shift inequality in a way that bolsters poverty reduction and shared prosperity in a sustainable manner. Specifically, the report will address the following questions: • What is the latest evidence on the levels and evolution of extreme poverty and shared prosperity? • Which countries and regions have been more successful in terms of progress toward the twin goals and which are lagging behind? • What does the global context of lower economic growth mean for achieving the twin goals? • How can inequality reduction contribute to achieving the twin goals? • What does the evidence show concerning global and between- and within-country inequality trends? • Which interventions and countries have used the most innovative approaches to achieving the twin goals through reductions in inequality? The report will make four main contributions. First, it will present the most recent numbers on poverty, shared prosperity, and inequality. Second, it will stress the importance of inequality reduction in ending poverty and boosting shared prosperity by 2030 in a context of weaker growth. Third, it will highlight the diversity of within-country inequality reduction experiences and will synthesize experiences of successful countries and policies, addressing the roots of inequality without compromising economic growth. In doing so, the report will shatter some myths and sharpen our knowledge of what works in reducing inequalities. Finally, it will also advocate for the need to expand and improve data collection—for example, data availability, comparability, and quality—and rigorous evidence on inequality impacts in order to deliver high-quality poverty and shared prosperity monitoring.