I’ve got an article out at the New Humanitarian looking at how African countries have responded to the economic impacts of coronavirus. Most countries were quick to take public health measures to contain the virus, but responding to its economic harms has taken more time. The first wave of economic measures mostly benefitted the middle class:
Economic relief efforts have come in two waves so far. The first, implemented in late March and early April, often involved cuts in the fees and taxes citizens must pay to the government or to banks.
For example, Kenya has cut income tax rates for both the lowest and the highest earning categories, and has cut corporate tax rates from 30 percent to 25 percent. Ghana is providing free water to citizens as long as they don’t have any overdue bills with the national water company. And 18 African countries have lowered interest rates to encourage individuals and businesses to borrow from banks.
These relief efforts are fairly easy for governments to implement, since they only involve changing payment policies. They also primarily benefit the middle class, who are more likely to have formal jobs that pay income taxes, fully paid water bills, and loans from a bank.
Pro-poor relief efforts are now getting off the ground, albeit more slowly:
The second wave of economic relief efforts is now getting underway as of mid-April. This has involved direct support to poor people who might otherwise go hungry.
Rwanda and Uganda have already begun providing people in their capital cities with food aid. Kenya and Malawi have started cash transfers, and South Africa has increased its monthly payments to current welfare beneficiaries, and is creating new cash transfer programmes for the newly unemployed…
Notably, the countries that moved relatively quickly on economic relief all had welfare programmes in place already. But these existing schemes are primarily aimed at alleviating rural poverty, while the impact of coronavirus is being felt most heavily in cities. This means many countries are being forced to create new relief programmes rather than scaling up existing ones.