This document analyses the impact of COVID-19 and the restrictions measures that were put in to place to contain the pandemic, in the ECOWAS region. It is based on a review of the epidemiological and the socioeconomic analysis of primary and secondary data (implemented through a household web-survey covered 15 countries).
The epidemiological situation of the coronavirus pandemic shows the level of COVID-19 infections to be around 131,680 as of August 3, 2020. This figure represents 13.6% of cases in the continent, a relatively low incidence level for an area that is home to 30% of the African population. The case -fatality rates are also relatively low at 1.5% compared to 2.1% and 3.8% for the rest of Africa and the world respectively. Cure rates were also high at 69% for ECOWAS compared to the continent which stood at 65% respectively. Based on data observed between 3 and 5 August 2020 in some ECOWAS States, it appears that the number of tests carried out remains relatively low compared to countries such as Morocco and South Africa. The rate of people tested (per 1000 inhabitants) varies on average from 1.3 to 13.4 in the region while it is 29.6 in South Africa.
The number of actual positive cases is estimated at 1.3 million, i.e. nearly twelve (12) times the number officially reported, if the rates from South Africa between June and July are factored into the average positive rates in the region. Consequently, the implementation of the lifting of lockdown measures and the quasi-return to normal life should take into account both the evolution of the number of positive cases recorded and the capacity of the States to make an effective assessment of the health risk through the performance of a significant number of tests.
The current report will demonstrate how the rate of the spread of COVID-19 and the restriction measures taken, are straining the economic and social system of ECOWAS States. Several factors of vulnerability and socioeconomic fragility facing the region could exacerbate the effects of the health crisis. In particular, the region is characterized by: (i) poorly diversified economies focused on exports of primary products; (ii) limited fiscal space; and (iii) a large informal sector.
The region's growth prospects are much less favourable in the second and third quarters of 2020, which are expected to lead to negative annual growth. In fact, ECOWAS is expected to enter recession in 2020, with a 3.6% contraction of the regional economy. This overall result is in line with the negative growth anticipated in Nigeria (5.4%) and Cape Verde (5.5%), Guinea Bissau (1.6%) and Sierra Leone (2.3%).
In Liberia, the economic recession that began in 2019 (2.3%) is expected to deepen in 2020 (2.6%). The other countries in the region are not expected to go into recession in 2020. But they are expected to diverge in their growth rates and to experience an economic slowdown of at least 3½ percentage points in the region.
The crisis situation could lead to greater instability in consumer prices in 2020. On average, a slight easing of the rise in consumer prices is expected due to lower demand and a sharp drop in oil prices, the combined effect of which is expected to more than offset the rise in the price of specific products caused by supply disruptions due to restriction measures.
The COVID-19 crisis would lead to a significant widening of the public deficit in ECOWAS Member States. The budget deficit for ECOWAS as a whole is expected to reach 6.4% in 2020 after an increase of 4.7% in 2019 and 2.9% in 2018. This sharp deterioration in the region's budget deficit in 2020 reflects a general worsening in all countries.
The economic recession and governments' swift response to the COVID-19 crisis would have a more or less significant impact on the evolution of public debt relative to GDP. Forecasts suggest on average an increase in ECOWAS public debt as a proportion of GDP, which would stand at 41% in 2020 and 42% in 2021, against 35% in 2019. However, the overall public debt situation remains of little concern.
The region is strongly affected by the contraction of world trade, causing a sharp fall in the prices of several export products such as oil, minerals and some agricultural products. In 2020, although still subject to strong uncertainty, forecasts predict a sharp deterioration in the current account deficit for ECOWAS as a whole, which is expected to stand at 4.3% against 2% in 2019.
A decline, sometimes significant, in the prices of raw materials exported by ECOWAS is observed due to the contraction of global demand. The price index of exported commodities fell by -11.4% in March 2020. The fall in prices concern both energy products (-36.1%), including a -39.8% collapse in the price of oil, and non-energy products (-7.2%).
The heavy reliance on a few products for exports or on a small number of customers (including India, the European Union, the United States and South Africa, which have been hard hit by the pandemic) amplifies the impact of the crisis on the regional economy.
Migrant workers are particularly vulnerable to income losses as they work in the sectors most affected by the restriction measures, including restaurants, hotels, retail and wholesale trade, tourism, and transportation and construction. Based on an estimated decline of 23.1% in Sub-Saharan Africa, ECOWAS remittances could fall to $25.9 billion in 2020, their lowest level in ten years.
The household survey undertaken for this report, further confirms the negative impact of the pandemic and restriction measures on the overall socio-economic situation and the well-being of the population. In particular, measures to close workplaces, schools, markets and restrictions on internal movements have affected households the most. Four groups of countries stand out in relation the type of impact experienced due to COVID-19 restriction measures:
◼ The first group, consisting of Togo, Guinea, Guinea Bissau, Liberia, Nigeria and Sierra Leone, recorded an increase in prices, lower stocks of goods compared to last year, difficulties in carrying out activities due to measures restricting public events and the closure of schools, all of which contributed to social tensions and an increase in the crime rate.
◼ The second group, made up of Benin, Burkina Faso, Ghana, Niger, and Senegal, were affected by the closure of local markets and the restriction of cross-border and internal movements, which nonetheless helped to generate new employment opportunities.
◼ The third group consists of Cape Verde, where COVID-19 has not had a significant impact on food stocks and prices, thanks to the public information campaign and health investments put in place.
◼ Finally, in Côte d'Ivoire, slums and informal settlements suffered a severe impact on income and job loss due to the closure of workplaces.
This situation is similar for all the slums and informal settlements in the region.
Based on the findings listed above, below are the core recommendations:
a. It is crucial to systematically strengthen coordination and consultation among the various States with a view to harmonize and ensure the consistency of policies and measures implemented within the framework of the community provisions in force in the region.
b. Governments are called upon to further promote free movement by easing restriction measures (tariff and non-tariff barriers) that hinder the movement of goods, persons, capital and services, while strengthening health and sanitation measures.
c. Governments are encouraged to support policies and investments in local production in line with policies and strategies adopted at the continental and regional levels and to take advantage of innovation and technologies to modernize the agricultural sector, supply chains and diversify the economy in general.
d. Governments and economic actors are encouraged to invest in innovation by taking advantage of new information technologies to improve attempts to use distance learning as a teaching tool to address such situations in the future.
e. It is important to work with the States and all technical and financial partners to prioritize food products and agricultural inputs in the processing of goods at ports and ensure that agricultural producers have access to agricultural inputs on time in anticipation of the next crop year.
f. It is important for governments and the private sector to invest through research and development (R&D) in supply chains and the local processing of certain food and pharmaceutical products in order to reduce the supply chain and the risk of disruptions if restriction measures are extended.
g. There is a need to strengthen advocacy, policy dialogue and mobilization of adequate resources for food security and nutrition in relation to medium and long term interventions, including in terms of social protection, social safety nets, strategic reserves, food banks, etc.
h. It is imperative that governments and partners work closely together to establish humanitarian corridors, understand the socio-economic impact of COVID-19 on vulnerable households, and promote optimal and inclusive supply chains to facilitate agricultural producers' access to markets while ensuring the free movement of goods, people and humanitarian personnel.
i. There is an urgent need to forge/strengthen partnerships at several levels to guide and support decision-makers in implementing evidencebased interventions.