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The Economic Costs of COVID-19 in Sub-Saharan Africa: Insights from a Simulation Exercise for Ghana

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  • Sena Amewu

    (International Food Policy Research Institute)

  • Seth Asante

    (International Food Policy Research Institute)

  • Karl Pauw

    (International Food Policy Research Institute)

  • James Thurlow

    (International Food Policy Research Institute)

Abstract

Globally, countries have resorted to social distancing, travel restrictions and economic lockdowns to reduce transmission of COVID-19. The socioeconomic costs of these blunt measures are expected to be high, especially in sub-Saharan Africa where many live hand-to-mouth and lack social safety nets. Social Accounting Matrix multiplier model results show that Ghana’s urban lockdown, although in force for only three weeks in April 2020, has likely caused GDP to fall by 27.9% during that period, while an additional 3.8 million Ghanaians temporarily became poor. Compared to the government’s revised GDP growth rate of 1.5% for 2020, the model predicts a contraction of 0.6 to 6.3% for 2020, depending on the speed of the recovery. The US$200 million budgeted for Ghana’s Coronavirus Alleviation Program will close only a small part of the estimated US$ 2.3 billion GDP gap between the fast recovery scenario and government’s revised GDP trajectory.

Suggested Citation

  • Sena Amewu & Seth Asante & Karl Pauw & James Thurlow, 2020. "The Economic Costs of COVID-19 in Sub-Saharan Africa: Insights from a Simulation Exercise for Ghana," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(5), pages 1353-1378, December.
    • Handle: RePEc:pal:eurjdr:v:32:y:2020:i:5:d:10.1057_s41287-020-00332-6
    DOI: 10.1057/s41287-020-00332-6
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    1. Aragie, Emerta & Artavia, Marco & Pauw, Karl, 2019. "Strategic public spending: Scenarios and lessons for Ghana:," IFPRI discussion papers 1852, International Food Policy Research Institute (IFPRI).
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    2. Damilola Giwa-Daramola & Harvey S. James, 2023. "COVID-19 and Microeconomic Resilience in Sub-Saharan Africa: A Study on Ethiopian and Nigerian Households," Sustainability, MDPI, vol. 15(9), pages 1-25, May.
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    6. Nxumalo, Mpumelelo Author-Name: Raju, Dhushyanth, "undated". "Structural Transformation and Labor Market Performance in Ghana," Jobs Group Papers, Notes, and Guides 154568, The World Bank.
    7. Christiana C. Nyarko & Michael Affam & Samuel K. Obeng, 2022. "Comparative Analysis of the Contribution of the Agricultural Sector to the Gross Domestic Product of Ghana: Before and Within COVID-19 Pandemic," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 9(6), pages 07-11, June.
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    11. Zhiwen Li & Oswin Aganda Anaba & Zhiqiang Ma & Mingxing Li, 2021. "Ghanaian SMEs Amidst the COVID-19 Pandemic: Evaluating the Influence of Entrepreneurial Orientation," Sustainability, MDPI, vol. 13(3), pages 1-27, January.
    12. Li, Baolin & Wang, Jia & Nassani, Abdelmohsen A. & Binsaeed, Rima H. & Li, Zeyun, 2023. "The future of Green energy: A panel study on the role of renewable resources in the transition to a Green economy," Energy Economics, Elsevier, vol. 127(PB).
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