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Thread: I've got a new piece out at @africaarguments talking about how public markets and cash transfers can mitigate the economic effects of coronavirus in Africa. It rounds up research from a lot of smart people on these issues. /1 https://africanarguments.org/2020/04/02/africa-coronavirus-response-rests-on-two-things-markets-money-transfers/
Over the last few weeks, I kept seeing articles saying "Africa can't replicate Europe's coronavirus response" without clearly specifying what should be done differently. I did a lot of reading about those options might be, for economic and public health response /2
By way of background, rich countries have considered ~4 types of response. Goal is to keep people healthy + keep the economy running till a vaccine is available. They involve different combinations of testing and public health spending /3
Approach 1 is uncontrolled spread / "herd immunity", aka the Boris Johnson approach until a few weeks ago. Lots of people get sick, health system crashes, and the economy contracts, so that's a bad idea. /4 https://www.theguardian.com/world/2020/mar/24/confused-dangerous-flippant-worlds-media-pans-pms-handling-of-coronavirus-boris-johnson
Approach 2 is "lockdown w/o income replacement." People have to stop moving around for non-essential activities to control the virus, but many lose their jobs and incomes. Also v. bad for the economy. The US is basically doing this /5 https://www.cnbc.com/2020/03/25/congress-to-send-taxpayers-1200-checks-in-the-wake-of-coronavirus.html
Approach 3 is "lockdown WITH income replacement." People get paid to stay at home. Denmark is doing this by paying companies, Canada is sending $$ directly to individuals. This controls the virus and helps the economy, but it's expensive for the gov't /6 https://www.bbc.co.uk/news/world-us-canada-52022506
Approach 4 is "testing and containment." Test huge numbers of people, isolate those who are sick, and let others go about their daily life. Singapore and Taiwan were doing this for a while. But it requires very good public health infrastructure /7 https://www.nytimes.com/2020/03/13/opinion/coronavirus-best-response.html
Which approaches could African countries adopt? "Herd immunity" is out, as gov'ts are already taking lots of measures to fight the virus. "Testing and containment" is also out b/c most countries don't have the public health systems for this /8
Lots of African countries went for "lockdown w/o income replacement" initially. Uganda's a good example: lockdown from March 31 ( https://www.monitor.co.ug/News/National/688334-5509496-mqc622z/index.html), plans to distribute food to 10% of poor population with no clear start date now discussed ( https://www.independent.co.ug/1-5-million-ugandans-to-receive-relief-support/) /9
To be clear, some food distribution is definitely better than nothing. But only 1.5 million people will get this food, and many more people are going to lose their jobs or see their incomes reduced if self-employed, so they're not supported /10
The best option is "lockdown with income replacement." It's possible to do at least some amount of social distancing in most major African cities, and definitely in rural areas. But no one will comply with this if they have to go hungry in doing so /11 https://www.idinsight.org/reports-2/idinsight-covid-19-social-distancing-recommendations
So how to keep people's incomes steady? Keeping public markets open is an important part of this. If they're closed, like in Mauritius, both buyers and sellers go hungry. /12 https://news.yahoo.com/mauritius-rush-supermarkets-open-10-days-150445588.html
. @grantbrooke of Kenya's @TwigaFoods has a great piece about how markets can be expanded and made safer for buyers and sellers. https://medium.com/@grant_45914/kenyas-market-infrastructure-during-covid-19-some-thoughts-ef915edb99e6 And @kenyanpundit has shared images of this from India. /13 https://twitter.com/kenyanpundit/status/1243221942779461643
Keeping markets open mean that some people are still earning (at least part of) their regular income. But lots of others will lose their jobs or need more support. Here's where cash transfers can play an important role. /14 https://blogs.worldbank.org/impactevaluations/what-can-low-income-countries-do-provide-relief-poor-and-vulnerable-during-covid
Cash transfers let people buy what they need, and evidence shows people don't waste the money. https://blogs.worldbank.org/impactevaluations/do-poor-waste-transfers-booze-and-cigarettes-no Most African gov'ts already have social protection programs that offer cash transfers. But they need help to scale them up /15
African gov'ts are going to take big hits to their tax revenue as economic activity drops. https://africanarguments.org/2020/03/25/fill-the-gaps-feel-the-pain-insights-from-sierra-leone-on-an-epidemics-impact-on-local-taxation-public-services-and-the-poor/ That's probably why few of them have promised to scale up their programs yet. /16 http://www.ugogentilini.net/?p=817
There's an urgent need here for the IFIs and other aid donors to step in and fund cash transfers. Ideally this should be done with grants rather than loans, although any money is better than none /17 https://www.devex.com/news/opinion-spend-what-it-takes-to-fight-covid-19-in-poor-countries-too-96852
Donors are stepping up with funding for health systems and small business support. There needs to be dedicated funding for social protection as well /18 https://www.worldbank.org/en/news/press-release/2020/03/17/world-bank-group-increases-covid-19-response-to-14-billion-to-help-sustain-economies-protect-jobs
This response also needs to happen quickly. Food prices have already begun rising, and there are projections that many people who've previously escaped poverty could fall back into it. /19 https://www.dw.com/en/price-hikes-in-africa-aggravate-the-coronavirus-crisis/a-52820553
