‘STOP COPYING WESTERN POLICIES IN COVID-19 FIGHT’

MBABANE – “District policies should be tailor-made to speak to the situation in that particular country or region instead of copying from other countries.”
This was a submission made by an economist, who spoke on condition of anonymity, when reacting to a statement by the World Bank where the latter was cautioning African States to desist from copying Western practices and policies to curb COVID-19 spread.

The Africa’s purse report titled ‘Assessing the economic impact of COVID-19 and Policy Responses in Sub-Saharan Africa’ commended Tanzania as one of the best examples for its strategic approaches that considers the best of its political economy and well-being of the society.

With 32 COVID-19 confirmed cases, three deaths and recoveries, Tanzania, unlike other African countries, has not locked down businesses and its citizens. Tanzania has not also closed its borders but initiated strict testing and 14 days quarantine to all arrivals.

Consequences

The report warns about catastrophic consequences to sub-Saharan countries that have copied and pasted Western anti-COVID-19 policies.
“Facing a fast-changing situation with great uncertainty and so many unknowns, most governments around the world have resumed to similar approaches to contain the COVID-19 pandemic,” the report states.

The economist said Eswatini had a lot of economic activity in the informal sector and many of these businesses were not registered and even if government came up with a relief scheme to assist businesses financially at the height of the COVID-19 pandemic, they might not be able to accurately calculate the losses incurred and the informal businesses could be left out.

“I concur with the World Bank on this one. Policies and regulations in every district should be tailor-made to accurately address the situation on the ground. Copying from the West has a lot of shortcomings because they implement them having carefully scrutinised the situation on their territories, not ours,” said the economist.

The report mentions South Africa, Ghana, Rwanda, Kenya, who have reacted quickly and decisively to curb the potential influx and spread of the COVID-19 virus very much in line with emerging international experience.
The same could be said about Eswatini, although one may argue that it was highly influenced by South Africa.

Effectiveness

The report warns these countries that as the situation evolves, there were more questions about suitability and likely effectiveness of some of these policies such as strict confinement.
It advises African governments to deploy a series of emergency measures and structural features of African economies that shape the policy responses that are designed and implemented to fend-off COVID-19.

The World Bank has given multiple reasons why economic policies implemented in Sub-Saharan Africa should be different from those adopted in advanced countries and (some) middle-income countries.

First, the report states that informal employment is the main source of employment in Sub-Saharan Africa, accounting for 89.2 per cent of all employment.
Excluding agriculture, informal employment accounts for 76.8 per cent of total employment.

“Based on the number of entrepreneurs who are owners of informal economic units, the vast majority of economic units in the region are informal (92.4 per cent). Informal workers lack benefits such as health insurance, unemployment insurance, and paid leave.
“Most informal workers, particularly the self-employed, need to work every day to earn their living and pay for their basic household necessities,” reads the report.

It states that a prolonged lockdown will put at risk the subsistence of their households.
Additionally, the majority of workers hired are in a precarious situation, and most of these jobs are temporary and with low remuneration, do not offer social security, and put workers at a greater risk of injury and ill-health.

Economies

Second, SMEs, an important driver of growth in economies across the region, account for up to 90 per cent of all businesses and represent 38 per cent of the region’s GDP.
Access to finance is one of the main challenges facing SMEs in normal times, with the majority of these firms lacking the finance needed to grow.

Prior to COVID-19, the finance gap for SMEs in the region was estimated at E6 trillion (US$331 billion) (IFC 2018). Third, concerns about the negative economic impact of the COVID-19 outbreak prompted interest rate cuts in several African countries in line with monetary policy actions around the world.
However, the report states that this type of monetary stimulus may not be effective for two reasons.
One being the prevalence of supply effects at the height of the containment measures (i.e. reduced labour supply and closed businesses, especially in contact-intensive sectors).

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