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After the lockdown: macroeconomic adjustment to the COVID-19 pandemic in sub-Saharan Africa

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  • Christopher Adam
  • Mark Henstridge
  • Stevan Lee

Abstract

The COVID-19 pandemic is ripping around most of the world, but not in Africa; at least, not yet. At the same time, the policy response is remarkably uniform: most of sub-Saharan Africa went into lockdown from the second week in March. What happens next for the pandemic across Africa is uncertain, but the March lockdowns are unlikely to have contained the epidemic by themselves.What is clear is that the combination of domestic lockdowns and the spill-over from the global recession means immediate and severe hardship. This paper looks beyond the public health aspects of the pandemic to examine the medium-term macroeconomic adjustment challenge confronting domestic policy-makers and international donors. We combine epidemiological and macroeconomic models to calibrate the scale of the combined shock to a representative low-income African economy and to show how alternative policy options for slowing transmission of COVID-19 impact on public revenue, and on GDP in the short run, and hence shape the path to recovery. Noting that the first lockdown, however costly, does not by itself eliminate the likelihood of a re-emergence of the epidemic, we then frame the agenda for key macroeconomic and public finance policies to sustain recovery, growth, and poverty reduction in sub-Saharan Africa.The initial hit to consumption will be up to one-third. All the public policy options are grim. International donor finance of US$40–50 billion, together with domestic reform to accelerate recovery, would make a significant difference to the outlook for poverty.

Suggested Citation

  • Christopher Adam & Mark Henstridge & Stevan Lee, 2020. "After the lockdown: macroeconomic adjustment to the COVID-19 pandemic in sub-Saharan Africa," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(Supplemen), pages 338-358.
  • Handle: RePEc:oup:oxford:v:36:y:2020:i:supplement_1:p:s338-s358.
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    Cited by:

    1. António Manuel Portugal & Fatima Sol, 2022. "Macroeconomic Impacts of the Covid-19 Pandemic in Some European Union Countries: A Counterfactual Analysis," CeBER Working Papers 2022-05, Centre for Business and Economics Research (CeBER), University of Coimbra.
    2. Buffie, Edward F. & Adam, Christopher & Zanna, Luis-Felipe & Kpodar, Kangni, 2023. "Loss-of-learning and the post-Covid recovery in low-income countries," Journal of Macroeconomics, Elsevier, vol. 75(C).
    3. Didier, Tatiana & Huneeus, Federico & Larrain, Mauricio & Schmukler, Sergio L., 2021. "Financing firms in hibernation during the COVID-19 pandemic," Journal of Financial Stability, Elsevier, vol. 53(C).
    4. Yugang He, 2022. "Home Production: Does It Matter for the Korean Macroeconomy during the COVID-19 Pandemic?," Mathematics, MDPI, vol. 10(12), pages 1-12, June.
    5. Abdulazeez Hudu Wudil & Muhammad Usman & Joanna Rosak-Szyrocka & Ladislav Pilař & Mortala Boye, 2022. "Reversing Years for Global Food Security: A Review of the Food Security Situation in Sub-Saharan Africa (SSA)," IJERPH, MDPI, vol. 19(22), pages 1-22, November.
    6. Klona, Maria, 2021. "The Days After COVID-19: A Meta-Analysis on the Impact of Epidemics and Pandemics on Long-Term Macro-Economic Performance," American Business Review, Pompea College of Business, University of New Haven, vol. 24(1), pages 188-224, May.
    7. Yugang He & Yinhui Wang, 2022. "Macroeconomic Effects of COVID-19 Pandemic: Fresh Evidence from Korea," Sustainability, MDPI, vol. 14(9), pages 1-14, April.
    8. Camino-Mogro, Segundo, 2020. "Turbulence in startups: Effect of COVID-19 lockdown on creation of new firms and its capital," MPRA Paper 104502, University Library of Munich, Germany.
    9. Galiani, Sebastian, 2022. "Pandemic economics," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 269-275.
    10. Camino-Mogro, Segundo & Armijos, Mary, 2020. "The effects of COVID-19 lockdown on Foreign Direct Investment: evidence from Ecuadorian firms," MPRA Paper 104821, University Library of Munich, Germany.
    11. Azomahou, Théophile T. & Ndung’u, Njuguna & Ouédraogo, Mahamady, 2021. "Coping with a dual shock: The economic effects of COVID-19 and oil price crises on African economies," Resources Policy, Elsevier, vol. 72(C).
    12. Segundo Camino‐Mogro & Mary Armijos, 2022. "Short‐term effects of COVID‐19 lockdown on foreign direct investment: Evidence from Ecuadorian firms," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(4), pages 715-736, May.
    13. Md Akhtaruzzaman & Ramzi Benkraiem & Sabri Boubaker & Constantin Zopounidis, 2022. "COVID‐19 crisis and risk spillovers to developing economies: Evidence from Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(4), pages 898-918, May.
    14. Théophile T Azomahou & Njuguna Ndung'U & Mahamady Ouedraogo, 2021. "Coping with a dual shock : the economic effects of COVID-19 and oil price crises on African economies," Post-Print hal-03344118, HAL.
    15. Shami, Labib & Lazebnik, Teddy, 2023. "Financing and managing epidemiological-economic crises: Are we ready for another outbreak?," Journal of Policy Modeling, Elsevier, vol. 45(1), pages 74-89.
    16. Edwin Yingi, 2022. "Beyond the pandemic: Implications of COVID-19 on regional economic integration in Southern Africa," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(2), pages 270-279, March.
    17. Lukman O. Oyelami & Matthew I. Ogbuagu & Olufemi M. Saibu, 2022. "Dynamic Interaction of COVID-19 Incidence and Stock Market Performance: Evidence from Nigeria," Annals of Data Science, Springer, vol. 9(5), pages 1009-1023, October.
    18. Afesorgbor, S.K. & van Bergeijk, P.A.G. & Demena, B.A., 2021. "Does COVID-19 threaten globalization?," ISS Working Papers - General Series 683, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    19. Hagera Dilnashin & Hareram Birla & Vishnu D. Rajput & Chetan Keswani & Surya P. Singh & Tatiana M. Minkina & Saglara S. Mandzhieva, 2021. "Economic Shock and Agri-Sector: Post-COVID-19 Scenario in India," Circular Economy and Sustainability,, Springer.

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