This brief assesses the policy responses to COVID-19 among low-income countries (LICs) in Africa.

Recommendations:

• Address the structural bottlenecks impeding the effective implementation of an appropriate policy mix by African LICs. A key focus area is ensuring the independence of monetary and debt management authorities with a view to achieving fiscal sustainability and controlling inflation.
• Implement a data-driven approach to policy formulation in the context of COVID-19 economic management, as this will streamline recovery efforts and enhance results.
• Maintain official development assistance as an intervention during the COVID-19 economic recovery phase as it is crucial for those LICs (particularly fragile states) with limited capacity to mobilise their own domestic resources.
• Address structural weaknesses in key sectors, many of which have been exposed by COVID-19. Priority should be given to broadening the digital economy as well as financial and social inclusion, which will have significant, long-term benefits.

Executive summary

This brief assesses the policy responses to COVID-19 among low-income countries (LICs) in Africa. While LICs have adopted expansionary fiscal and monetary policies in the face of economic lockdown, as well as other mitigation strategies, the scale and quality of such responses have been modest compared with those of emerging and middle-income countries. Policy instruments have also varied across countries, in line with the level of development of domestic financial markets and the extent of digital inclusion. Pre-pandemic economic challenges, such as limited fiscal space, high debt levels and inflation, have also contributed to countries’ weak economic responses. External financing has been crucial for LICs’ ability to respond to the pandemic, but, is still inadequate given the huge financial gap that exists. As LICs move from the relief to the recovery phase of COVID-19 economic management, a rethinking of economic responses is crucial both to bring about a swift recovery and to minimise the catastrophic impact of COVID-19 on recent developmental gains.

Introduction

The COVID-19 pandemic has had a devastating effect on both developed and developing countries. While the burden of disease and the health implications have been felt most acutely by developed and a few emerging economies, all countries have experienced serious economic consequences. At the peak of the crisis, 161 countries were under some form of lockdown, which put a severe strain on their economic and trade activities. Developed countries used their enormous financial capacity to respond to the COVID-19 pandemic with expansionary fiscal and monetary policies and social palliatives. By April 2020, the US alone had spent over $6 trillion in COVID-19 response measures, while the EU later introduced a $500 billion stimulus package.

Low-income countries (LICs) in Africa, in turn, responded to the health crisis with lockdowns and the heavy curtailment of economic activity. However, the scale and scope of their mitigation strategies paled in comparison with those of most developed countries. The total COVID-19 budget of African countries stood at $37.8 billion in April 2020, with South Africa and Egypt responsible for 84% of that amount. This implies that most LICs lack the financial capacity to respond meaningfully to the pandemic. In addition, prospects of securing external financial assistance are limited, given that every country is facing a similar crisis.

With many countries already reopening their economies and focusing on recovery efforts, important questions need to be asked about the African LIC experience. In the initial phase of the crisis, how did African LICs use the various policy tools at their disposal (fiscal, monetary and exchange rate) to effectively manage the crisis? How did their economic responses evolve – especially compared with their responses to past economic challenges, like the global financial crisis (GFC)? What worked, where did it work and why did it work? Looking ahead, what crucial lessons have LICs learned from economic recovery efforts? This policy brief delves into these important questions.

Economic policy responses to COVID-19 among LICs in Africa

While public health responses to the COVID-19 pandemic have followed a similar pattern of public awareness creation, testing, tracking, therapeutic management of those infected and physical restrictions (lockdowns and shutdowns) to curb its spread, economic responses have varied significantly across countries, given different fiscal space and prepandemic economic fundamentals.

Economic responses have cut across three policy domains: fiscal; monetary and macro-financial; and exchange rate/ balance of payments. Economic responses have also been shifting as the pandemic has progressed. At the onset, the focus of economic policy responses was on delivering relief to vulnerable populations and those in precarious employment whose livelihoods were affected by the lockdowns. Now, with a better understanding of the patterns and effects of the disease, more countries in Africa are moving towards reopening their economies and directing their economic policy responses at recovery, following the initial economic shocks.

Below we briefly enumerate these policy responses among LICs in Africa and compare how these interventions diverge from past responses to economic crises, notably the 2007– 2008 GFC.

Fiscal policy: This includes economy-wide and sectoral interventions using taxation/subsidy, public expenditure and deficit-financing instruments. The first line of intervention in many countries is emergency budget support for the health sector and the scaling up of social protection for vulnerable households in the form of direct cash transfers, a debt moratorium, and financial support for small and mediumsized enterprises and the informal sector. In many cases, expenditure has been reprioritised to focus on immediate needs in the health sector. For countries with less fiscal space, interventions have taken the form of taxation-related measures, such as tax relief and utility bill freezes, among others. There has also been an increase in deficit financing or drawing down savings.

Most LICs in Africa have used one or more forms of the fiscal policy instruments mentioned above. The most common fiscal policy instrument has been budget support for the health sector, through either reprioritisation or an expansionary policy. Only a few LICs have implemented social transfer programmes/support for households or firms. Moreover, the size of countries’ fiscal stimulus has been small, generally ranging from 1% to 2% of gross domestic product (GDP).¹The few exceptions among LICs are Senegal, Niger, Mozambique and Namibia, whose fiscal stimulus injections have amounted to more than 4% of GDP. Other limiting factors in terms of fiscal response (which were evident before the pandemic) are the absence of a social register, especially for urban residents who have carried practically the full burden of the lockdown, and low financial and digital inclusion, which has constrained the distribution of support. Despite these constraints, LICs have still managed to introduce several innovative and cost-effective interventions, such as tax relief (Senegal and Madagascar), a utility bill freeze and a waiver of fees for basic services (Niger), and the distribution of food aid (Senegal and Liberia).²

On the revenue side, the pandemic has affected the economic performance of most African countries, with government revenue projected to decline by more than 12% in 2020. Domestic resources thus make a limited contribution to government policy responses. However, early debt forgiveness and credit facilities granted by donors have helped to expand fiscal space in many LICs on the continent.

Monetary and macro-financial policy: Central banks, in a coordinated effort with fiscal authorities, have used expansionary monetary policy, in the form of increased money supply, through traditional, open-market operations as well as quantitative easing. Another tool that central banks are deploying is macro-financial assistance, which comprises medium/long-term loans or grants to businesses or households, as a way of cutting through the commercial banking system. In addition, there are support measures for commercial banks and other financial intermediaries that take the form of extended credit lines, higher liquidity and extensions to collateral frameworks. However, monetary policy interventions face some risks when it comes to managing the trade-off between growth-enhancing policies and inflation. Central banks are also using moral suasion and forward guidance to encourage commitment to specific policy directions in a bid to stabilise the financial system.

Expansionary monetary policy is by far the most common economic response deployed by African LICs.³One reason for its popularity is that the fiscal space in most countries is heavily constrained owing to high debt levels and weak revenue flows. A change in interest rate policy is another widely used instrument. Countries in the Economic Community of Central African States, which have limited control over interest rate policy, mostly rely on injections of liquidity and extended deadlines for the repayment of loan securities held by credit institutions. Nine of the LICs in Africa implement no monetary policies, according to the World Bank.⁴These are mostly countries whose weak financial markets make the application of monetary policy difficult. In many countries, too, the use and likely effectiveness of monetary policy is influenced by high inflation, which was evident before the pandemic.

Exchange rate/balance of payments policy: The COVID-19 pandemic has affected demand patterns and global supply chains to the extent that they have disrupted foreign exchange earnings for many African LICs. The oil price crash that occurred during the pandemic generated an additional external shock for petro states and worsened foreign reserves. Some countries, like Nigeria, responded to this threat by changing the exchange rate regime or depreciating their currency.⁵In addition, countries that lost control of inflation owing to their expansionary monetary policies used exchange rate policy as an alternative tool to address inflationary pressures.

Among the LICs in Africa, only Zimbabwe has made an explicit change to its exchange rate policy, by moving from a flexible to a fixed exchange rate in the face of the country’s forex crisis. However, most countries’ monetary authorities are using forward guidance to win support for interventions in forex markets in cases of high volatility or significant currency depreciation. For example, the banks of Uganda, Comoros and Sierra Leone have committed to intervening in the foreign exchange market.⁶In contrast, Angola, Eswatini and Nigeria (all lower-middle-income countries) have depreciated their currencies in response to COVID-induced economic shocks.

LICs have recorded fewer cases of currency depreciation than the frontier economies in Africa. Overall, the exchange rate policy has not played a major role in LICs’ policy responses in recent months.

Donor support for African LICs in the face of the COVID-19 pandemic

Given the inadequate scale of domestic resources among LICs, the second layer of interventions has come in the form of donor support. This includes multilateral support from the International Monetary Fund (IMF), the World Bank and the African Development Bank (AfDB), as well as bilateral interventions from Organisation for Economic Co-operation and Development countries and even countries in the Global South. The UN Office for the Coordination of Humanitarian Affairs (UNOCHA)⁷has collected detailed data on appeals for funding from developing countries in response to the COVID-19 pandemic and the total receipts so far.

As shown in Figure 1, a financing gap (the difference between need and actual allocation) is observed for all LICs, but it varies across countries. For example, Somalia and the Central African Republic have received 60% and 54%, respectively, of their appeal funds, while Uganda and Tanzania have received only 5% and 7%, respectively. A notable trend is that fragile states receive a higher proportion of the funds for which they have appealed, which is an indication of the priority given to disadvantaged countries in terms of donor interventions.

Debt relief and a moratorium on debt services are other forms of external support. The World Bank, the IMF, the G20, the AfDB and all Paris Club creditors granted debt relief to 18 LICs in Africa as part of the Catastrophe Containment and Relief Trust. The IMF also activated emergency lending facilities for African countries. China, in turn, introduced a series of debt relief and debt service suspension measures for African countries. However, with African countries having incurred more than $350 billion in debt, the debt forgiveness and relief measures represent modest support given LICs’ enormous financial needs. There are also concerns that creditors could in the future penalise those African countries requesting debt relief. Mutize notes that most African countries eligible for a debt moratorium have so far refused to apply because of the risk of credit rating downgrades.⁸

There are also private philanthropic support measures. The Bill and Melinda Gates Foundation has committed $1.6 billion over five years to ensure that the most vulnerable in the world can access a COVID-19 vaccine once developed. However, most philanthropic and bilateral support is aimed at health interventions, while economic support in many cases relies on the intervention of multilateral institutions. An analysis of trends in foreign aid and donor support shows that, in line with UNOCHA data, LICs in Africa have accessed some donor support, although this has been insufficient relative to their financial needs.

Effectiveness of African LICs’ economic responses

Given that the COVID-19 pandemic is still prevalent throughout the world, it is difficult to accurately gauge the effectiveness of various policy responses to date. Nevertheless, the policy interest that COVID-19 has stirred has prompted the capturing of much data using many indicators that have been useful in periodically tracking the virus’s economic and epidemiological effects. Elgin, Basbug and Yalaman⁹developed an economic stimulus index to track monetary, fiscal and exchange rate policy responses across countries. We used this index to assess the performance of LICs in Africa in responding to the COVID-19 pandemic. We also compared the IMF’s projected growth rates among LICs, which are measures of the likely impact of COVID-19, to the actual growth rates in the first and second quarters of 2020.

Furthermore, we correlated the stimulus index with key economic indicators prior to COVID-19 to assess the factors driving the observed country-by-country differences in policy design. The variables examined included: debt level, inflation and revenue over five years (2015–19) prior to the pandemic. High debt levels might constrain effective policy responses because of limited fiscal space. A similar argument holds for revenue; as better income streams are key to being able to pursue a countercyclical policy. In addition, inflation reduces the extent to which the monetary authority can push for an expansionary policy. Lastly, we compared the stimulus index to the incidence of and deaths from COVID-19. The results are reported in the Appendix.

The analysis showed that the economic response has been weak across African LICs, with all countries (except Senegal) recording a negative score. Similarly, comparing the actual and projected growth rates revealed that many LICs’ growth rates have been worse than projected – especially in the second quarter of 2020, which coincided with the peak of the COVID-19-induced lockdowns. We found the stimulus index to be positively correlated with the number of COVID-19 cases, while the number of deaths showed a negative but nevertheless weak relationship. This suggests that countries’ response levels are driven by the incidence of the virus and not the death rate.

Countries with high debt levels before the crisis had lower scores on the stimulus index, while those with high revenue levels had higher scores. This aligns with the argument that limited fiscal space constraints LICs’ macroeconomic responsiveness. In the same vein, the stimulus index is lower among countries with high inflation before the pandemic, again illustrating that a weak macroeconomic environment is a major constraint to effective policy responses to COVID-19. Overall, the weak economic response among LICs in Africa is a manifestation of past economic problems. This finding is supported by the literature on the importance of initial conditions for economic development.¹⁰

Comparison of COVID-19 and GFC economic policy responses

The COVID-19 crisis bears some resemblance to the GFC. For LICs, both came in the form of an external shock emanating from developed countries and transmitted through trade and the economic interdependency among nations. The transmission mechanisms were also similar, with a decline in global trade, remittances, foreign aid and commodity prices dominating. However, the magnitude of COVID-19 and the speed with which it has unfolded have been much greater than those of the GFC. In just three months, COVID-19 managed to turn around the 2020 global economic outlook (output) from more than 3% to -3%.

With both the GFC and COVID-19, the majority of LICs in Africa pursued expansionary fiscal and monetary policies to absorb the economic shock. However, they had more space to use fiscal policy at the time of the GFC, as the crisis came after the implementation of the LIC debt forgiveness programmes. Furthermore, non-resource-dependent countries were only marginally affected by the GFC, with some even benefiting from lower fuel and food prices.¹¹In fact, economic growth declined only slightly among African LICs during the crisis.

During the GFC, LICs responded to changes with macroprudential policies to strengthen the financial system. The response to COVID-19 has in turn centred on strengthening the health system and developing social security facilities for vulnerable groups. The donor support measures during the two crises were similar. In terms of development assistance, priority was given to fragile and post-conflict states. Multilateral institutions also introduced special facilities that African countries could tap, with the IMF, World Bank and AfDB providing facilities to improve trade, the financial system, foreign reserves and infrastructure. In addition, the IMF created Special Drawing Rights (SDRs) to the value of $250 billion, which countries can access up to their IMF quota share. This has proved useful for LICs during the COVID-19 crisis. However, policy tools like debt forgiveness were of limited use during the GFC compared to their value during COVID-19. Overall, there were inadequate funds for African LICs to effectively respond to the two crises.

In terms of differences in economic policy responses, social palliatives were used in very few African countries during the GFC. Bilateral support was much more prevalent – although complementary to the multilateral support – during the GFC. In contrast, donor support for COVID-19 has largely come from multilateral institutions. In addition, COVID-19 has been greeted by a better-capacitated financial system (ie, capital reserves), whereas the financial sector was found wanting during the 2007–2008 GFC. Lastly, in African countries’ responses to the GFC, regional cooperation had a stronger role to play, especially in the area of monetary policy. African governments set up the Committee of Central and Regional Bank Governors (C-10) at the beginning of the GFC. During COVID-19, while there have been areas of coordination in health policy (eg, the Africa Taskforce for Novel Coronavirus) and fiscal policy (eg, the creation of a Continental Solidarity Anti-COVID-19 Fund), monetary policy has been less coordinated among African countries.

However, the economic impact of COVID-19 on LICs is expected to be greater owing to the slowdown in trade and economic activity, and unequal access to COVID-19 therapeutic treatments. In addition, while poverty levels did not rise in the face of the GFC, most research findings point to a sharp increase in poverty rates (for the first time in three decades) owing to COVID-19.¹²

Emerging issues and lessons for economic recovery

A gradual reopening of the economy has been evident in all LICs. At the time of writing, the policy focus was centred on recovery efforts. In this phase, fiscal and monetary policies will remain not only relevant but also crucial. However, several pertinent issues and lessons from the relief phase should guide recovery efforts and policy responses.

Inability to harness multiple policy instruments: Unlike high-income and middle-income countries that simultaneously deployed fiscal and monetary policies in response to COVID-19, most African LICs have been able to effectively use only one instrument. High debt levels and inflation, as well as other structural issues, have limited policy options. In the long run, the structural bottlenecks impeding the effective implementation of economic policies by LICs need to be addressed using a more nuanced approach. This will require reforming economic institutions and processes to drive inclusive growth. An important focus area is the independence of monetary and debt management authorities, which is crucial for fiscal sustainability and controlling inflation.

Importance of a switch to a data-driven approach: The initial response to the pandemic in most African countries was simply to copy the template from developed countries.¹³For example, lockdowns and economic shutdowns were reversed in many countries after recognition of the limited capacity of governments to provide palliatives. This led to a more data-driven approach, which is consistent with countries’ economic structure and disease prevalence. Similarly, recovery efforts should be anchored on the same data-driven approach, with the interests of vulnerable populations prioritised.

Need for better leveraging of international cooperation: Official development assistance plays a prominent role in African LICs’ economic responses. It will continue to be crucial for COVID-19 recovery efforts, especially in the case of fragile states that have limited capacity to mobilise domestic resources and are heavily reliant on external support and trade. Nevertheless, it is important to look inwards to the Global South and other countries in Africa. Intra-Africa trade is one area that LICs can leverage for stronger resource mobilisation and growth. For example, the opportunities created by the African Continental Free Trade Area, which is expected to commence on 1 January 2021, can be tapped by LICs.

Rethinking of economic structure: Some of the structural hurdles facing LICs in Africa, which COVID-19 has exposed, include weaknesses in the digital economy, a lack of financial and social inclusion, and poorly developed domestic financial markets. Also, contrary to conventional economic thinking, many LICs follow pro-cyclical policies – ie, not saving during an economic boom – which a countries’ preparedness and ability to respond effectively to a sudden economic crisis. A long-term process to address these failures needs to be set in motion as part of countries’ broad recovery plans.

Conclusion

This analysis has revealed that economic policy responses among LICs in Africa have been suboptimal in the face of existing, pre-pandemic economic challenges. These challenges, which have simply been amplified by the crisis, include poor fiscal positions, deficiencies in human capital development, and a general absence of crucial hard and soft infrastructure. It is therefore important that recovery efforts are used as a springboard for long-term development across the continent. Indeed, a holistic and comprehensive intervention in these areas should be front and centre of the conversation on economic recovery going forward.

Appendix

This article was first published at Compra

Recently, we worked with members of the organized Private Sector of Nigeria, supported by Center for International Private Enterprise (CIPE) Africa to research the growth potential of the African Continental Free Trade Area (AfCFTA), its impact on Nigerian Micro, small & Medium Enterprises MSMEs.

Introduction
Free Trade Agreements (FTAs) are established components of regional integration and have been known to promote commodity trade and investment flows by creating an enabling and improved environment for cross-border transactions (Kawai & Wignajara, 2008). The processes may also prompt a diversion of trade and investment away from countries with less favorable business conditions
(Yunling, 2010). Thus, the impact of FTAs widely differs across countries on account of a multitude of factors that affect the business environment.
For Nigeria, the impact of AfCFTA as with any other FTA, could vary on account of several market opportunities and constraints to production. Amidst this discourse, the potential impact of the AfCFTA on micro, small and medium enterprises (MSMEs) is the least understood.

This report was first published here

While governments worldwide are continuing to struggle to implement forms of remote learning with equal access for all, the education crisis due to the COVID-19 pandemic is still being exacerbated globally. However, a recent landmark White Paper jointly issued by the world’s largest education organizations recall that this learning crisis isn’t really a new one.

The COVID-19 pandemic has caused unprecedented disruption to education systems worldwide. At the peak of the pandemic, approximately 1.5 billion learners globally were affected, with schools in many countries closed for months at a time to contain the spread of the virus.

Families, communities and school leaders across the world also suffered, trying to ensure that gaps in learning were minimized. Governments worldwide are continuing to struggle to implement forms of remote learning with equal access for all. The education crisis is being exacerbated globally.

However, a recent landmark White Paper jointly issued by the world’s largest education organizations highlights an important message: the learning crisis was always there.

The learning crisis

Before the pandemic, the World Bank’s Learning Poverty data estimates that 53 percent of students in low and middle-income countries lived in ‘learning poverty’ – defined as the number of 10 year olds in a country unable to read or understand a simple story in their language.

Recent projections by teams at UNESCO’s Institute of Statistics (UIS) and the World Bank’s Learning Poverty team have estimated that this number will rise due to the pandemic – by approximately 10 percent more.

Source: Education Commission, 2020. Out of the 53% of children in Learning Poverty, 44% are in-school children, who fail to meet minimum proficiency, and 9% are out-of-school children. The World Bank team estimates an additional 10% of children will enter learning poverty in 2020 due to the impact of COVID-19 pandemic closures. The team’s estimates are from their ‘pessimistic’ simulation projection.

The majority of these new additions to the population of learning poor are in fact from countries with relatively higher performing education systems. This is not because the education systems in these will suffer more from the impacts of the pandemic, but rather because the levels of learning are already so low in many low- and lower-middle income countries, that there is just less scope to reduce.

In the lowest-income countries, 90 percent of 10 years olds were already learning poorly.

The potential shock to funding for education

None of this means that the COVID-19 pandemic will not have a huge impact on the learning crisis – it undoubtedly will. The children who were already below the line of being able to read are likely to sink even deeper into learning deficits.

In addition, children in these contexts may suffer the most from the other impacts of school closures. For example, nutrition may be affected due to the loss of subsidized or free school meals, and other services children can access through school facilities.

However, the greatest long-term impacts on learning will likely be due to the ensuing financial crisis rather than directly as a result of school closures. The White Paper paints a bleak picture of rising costs for education systems, at a time when both domestic finance for education and international aid are at high risk of being cut.

The paper sets out the urgent need to close the financing gap for education globally, and to target funding to the most cost-effective approaches to deal with the fundamental systemic issues that caused the learning crisis to begin with.

Keeping focused on foundational learning

With the urgency surrounding rectifying the learning losses caused by the pandemic, there is also a risk that a focus will be on technology-enabled learning and children who are newly ‘learning poor’.

However, there is a risk that this will divert attention from the pre-pandemic learning crisis that already existed due to fundamental structural issues. There are no silver bullet solutions offered in this paper, and indeed there is a stark warning against the potential harm that unrealistic and unviable approaches to education technology can cause.

Instead, the paper strongly advocates for a focus on foundational learning driven by a renewed focus on the education workforce and on proven interventions such as differentiated instruction.

With this in mind, it is essential that policies and reforms not be reactionary and shortsighted. The unintended consequences of diverting attention away from the fundamental learning crisis will further widen the gaps of learning levels.

As political leaders grapple with ever more difficult trade-offs of solving the learning crisis, the hope is that they will heed this advice.

This blog was originally published on the GPE website and authored by by Myra Murad Khan, The World Bank, Kirsty Newman, Asian Development Bank, and Thelma Obiakor,  CSEA

As part of its response to combat COVID-19, the Nigerian government temporarily closed schools. To reopen schools, effective guidelines must be developed and implemented to protect students, staff, parents, and communities against the spread of the virus. In addition, it is imperative to mitigate the effect of COVID-19 closures on learning, and reopening presents a critical opportunity to recover these losses and build a strong foundation for the future of Nigeria’s education system. This policy brief by IDinsight and CSEA, contains: i) guidelines for reopening schools safely, and ii) recommendations for reopening schools to recover learning losses in Nigeria.

Digital technologies have proven to be a crucial factor in the fight against covid-19, and response strategies to reduce the social and economic impacts of the pandemic. With the restriction in human interaction and closure of international borders to curtail the spread of the virus, usage and reliance on digital platforms has become the only medium of human interaction and economic transaction to mitigate and minimize the disruptive effect from the covid-19 virus. While the scope and scale of digital usage varies across countries based on extent of digitalization, some form of adoption of digital systems are witnessed in every country, including Sub-Saharan Africa countries with the lowest internet connection.  

Like every other part of the world, digital economy plays four critical roles in response to COVID-19: surveillance, sensitization, social welfare intervention and substitution. These are couched as 4Ss as discussed below:

• Surveillance: Although the reported number of covid-19 cases are relatively low on the African continent, the pandemic has created a need to efficiently and promptly track and trace persons who might have been exposed to identified carriers of the virus, to curb further infection. At a regional level, the Africa Centres for Disease Control and Prevention, an umbrella body, provides intelligence support and cross border monitoring for member countries of the African Union. Countries within the region have also resorted to relying on a combination of different digital applications, call records and software for contact tracing. Some examples include; SORMAS which is used in locations in Nigeria and Ghana, COVI- ID solution deployed in South Africa, and a mobile tracing app used in Uganda. In addition, digital platforms have been helpful in enforcing compliance with social distancing regulations and reporting cases of default.

• Sensitization: Digital platforms have also been instrumental in creating awareness and sharing information about symptoms, preventive measures, personal hygiene, and other health and government advisory related to the pandemic. African countries have adopted a wide range of media in disseminating information to citizens. For instance, South Africa set up an interactive WhatsApp chat service in various local languages to respond to general queries about covid-19. A free online tool is available to Nigerians to assist in self-assessing health risk category based on users’ symptoms and travel history, and this helps reduce unnecessary calls to the disease control hotlines. Also, other means of digital communication such as government websites, social networks, mass text messages, radio and television jingles, have been adopted across the continent during this period, to ensure citizens are constantly informed.

• Social welfare delivery: Livelihoods have been negatively impacted due to the effect of reduced economic activities, especially for vulnerable individuals and those operating in the informal sector who have suffered job loss, and their savings are inadequate to cater for such an unexpected event like the pandemic. Therefore, African states have had to expand or introduce new social protection programs to provide relief in various forms to affected citizens, ranging from tax breaks, to fund transfers, food banks, extended loan repayment periods, interest rate freeze, and so on. Although some countries adopted cash-in-hand relief payments, digital channels have been quite popular in distributing stimulus packages, in order to minimize queues and comply with social distancing rules. Countries such as Togo, Malawi, Zimbabwe among others, have offered intervention funds which can be accessed through mobile banking or online platforms.

• Substitution: The disruption in daily activities has triggered the use of digital alternative measures to cope with the changing landscape. Some of these substitutes include working from home, increase in online grocery and food shopping, education delivery using e–learning platforms and other digital channels, legislative and government functions conducted via teleconferencing, medical check-up through virtual consultation, increased reliance on social media as means of interacting and connecting with friends and family, and so on. All of these digital alternatives have been used across African countries.

Weaknesses and gaps in Africa’s digital economy exposed

While the renewed importance of the digital economy offers opportunities for Africa, it however has its downside. The level of misinformation spread through social networks has been alarming, and difficult to curb, thereby posing a real problem to governments and health officials across the region during this period. The effect of such cases of false news has been far-reaching, creating public distrust and making some citizens doubt the severity of the virus, while some others have erroneously consumed harmful products touted as cures for covid-19.        

In addition, the transition to dependence on digital technologies threatens to cause further exclusion as not all citizens are able to leverage digital alternatives in combating the impact of the pandemic. There are reported cases across the region of uneven access to digital services for educational needs, business operations, and so on. A number of factors are responsible for the digital gap within the continent:

• High costs: Due to high incidence of poverty, a significant proportion of citizens are unable to access the internet because they cannot afford data charges and expensive smart devices. Based on the 2019 report on the state of broadband published by United Nations Educational, Scientific and Cultural Organization and International Telecommunication Union, the cost of 1GB of data for the poorest 20% of Africa’s population is equivalent to almost half of their monthly income. As a result, the proportion of Africa’s population that use the internet is significantly lower than the global average.

• Poor digital skills: Africa has a low literacy rate and this has an impact on digital competencies of its citizens, thereby limiting digital usage. Individuals who operate in the informal economy and earn income on a daily basis such as petty traders, subsistence farmers, pastoralists, artisanal miners, among others, have been severely impacted by recent changes in daily activities, but are unable to adapt business operations due to limited education and lack of digital skills, as well as other factors. An estimated 85.8% of Africa’s workforce operate in the informal sector and rely on physical interaction for their livelihood.

• Poor broadband penetration: According to the United Nations Economic Commission for Africa, rural and remote communities within the region are grossly underserved with low levels of broadband connectivity. The World Bank also estimates that about 100 million Africans live in areas without mobile networks. This trend can be explained by the fact that investments in broadband and mobile networks tend to be targeted at profitable urban regions with substantial economic activities rather than less commercially viable rural areas. Also, due to inadequate telecommunications infrastructure, certain regions even in urban areas although connected, have suffered from unreliable broadband coverage during the lockdown, thereby limiting access to the internet.

• Lack of digital identity: Digital identification is usually used to verify an individual’s identity online and often linked to official or legal forms of identification, biometrics and other online personal information or activities.  However, approximately half of the continent's population do not possess government issued identification nor digital profile, thereby restricting access to entitlements for which a means of identification is a prerequisite, such as accessing relief packages, public services, financial services and so on during the lockdown.

The above constraints have ripple discriminatory effects on daily life, schooling options, means of livelihood for micro and small businesses, access to welfare funds, and so on. For instance, it could worsen pre-existing inequalities in the region’s educational systems, as vulnerable students in public schools are more likely to experience difficulty in accessing digital learning due to lack of digital infrastructure, broadband connectivity and digitalized teaching content.

Urgent need for data governance and greater inclusion

Data gathering and information sharing continues to be an indispensable part of research to curb the spread of the virus, monitor its impact and finding preventive or curative medicine. However, with more data flying across the web, the risks of data breaches and human rights violations have become more visible. In the months following the lockdown, there have been several reports in various African countries on dangers of digitalization in relation to hacking, financial fraud, disinformation, exploitation of youths, among others. Even before the pandemic started, the African Union had estimated an annual loss of $3.5billion from cybercrimes across the continent. Although free flow of information across the region is essential at this period, and for long-term regional cooperation and integration plans like the African Continental Free Trade Area, it is imperative to promote a trustworthy mechanism that ensures protection of citizens civil rights.

This problem underscores a need for comprehensive data governance to support rising digital economy in Africa. If effectively implemented, data governance can address challenges in the areas of privacy, misinformation and alignment of cross-country data regulation to curb cybercrime among other concerns. A report by the Centre for International Governance Innovation reveals that most African countries are yet to enact laws and regulations for digital data protection and security, and for the few countries that have existing data governance structures, these structures are either not fully operational or not up to global standards required to ensure real digital transformation. Effective data governance has therefore become increasingly important at both national and regional levels.

The African Union recently issued a digital transformation strategy for the next ten years (2020 to 2030), which provides policy recommendations for improved data protection to be implemented by member states. Still, a lot more work is required. National data governance frameworks need to define responsibilities and ownership of data assets, specify processes for mitigating data infringement, ensure accountability, integrity, transparency and stewardship, safeguard data privacy and security, protect human-rights and empower citizens to make informed decisions regarding data sharing, discourage unfair practices, while still facilitating free flow of information for innovation and growth of the digital economy. Technologically driven innovations should be encouraged while having regulations that mandate responsible data collection and usage. A policy regime that is thorough, yet flexible, such that it promotes creativity.

Therefore, policy reforms and digital infrastructure investment drive bordering on data governance and digital inclusion are necessary as Africa, and indeed the world gradually readjusts, and recovers from the effects of the pandemic. African countries need to collaborate to ensure all citizens have reliable and secure digital access in order to be competitive in the new economy. Public/private partnerships and investment might be the way forward to ensure inclusion of underserved rural communities. As we embrace international or cross-border integration, data privacy and localization laws are essential. Also, data localization presents a viable tool for governments to exercise control and partake in the value associated with data generated within national borders. Overall, this calls for the right balance in order not to be too restrictive and discourage integration.