When asked about the significance of the French Revolution, Zhou Enlai reportedly said it was “too early to tell”. Assessing the epidemiological and economic performance of countries when the Covid-19 pandemic has not yet run its course is fraught with all kinds of risks. By mid-May 2020, the disease had its epicentre in Western Europe and the US. In June, many countries from Latin America, sub-Saharan Africa (SSA) and South Asia had thought that they might have successfully contained the spread. Alas, it did not last. By the early autumn of 2020, the epicentre had moved to Latin America, the Middle East and the Balkans. At the time of writing, in January 2021, Western Europe and the US are undergoing second or third waves, also accompanied by countries in Eastern Europe. Not too far behind are South Africa and Eswatini. With a significant share of the global population unlikely to receive a vaccine until 2022, it is imprudent to draw final conclusions on the ultimate toll of the pandemic in health, economic, or political terms. Covid-19 has also brought about an unprecedented shock to the global economy, launching a contraction of economic activity worldwide. Both by the adoption of non-pharmaceutical interventions (NPIs) to reduce social interactions and by the voluntary social distancing pursued by individuals, the fight against the virus caused a supply shock in most major economies, which eventually percolated through the economy through both supply and demand channels. In terms of the pandemic’s economic consequences, if we compare pre-crisis projections from the IMF’s World Economic Outlook with updated estimates from October 2020, growth projections for 2020 have become 8 percentage points lower for the median country. However, growth estimates such as these vary significantly both across regions and across countries (Figure 1). The SSA region’s GDP is expected to have shrunk 3% in 2020, whereas before the crisis, growth was projected to amount to 3.6%. On average, the region has been the least economically affected by the crisis, followed by East Asia. Nevertheless, regional aggregates conceal the heterogenous epidemiological and economic performance of the continent’s societies. Moreover, as is the case for epidemiological outcomes, with the crisis far from over, it might not be the time yet for an enduring verdict. In this chapter, we look at the experience of three SSA countries, in light of this broader context. Two of them – South Africa and Namibia – are upper-middle-income countries. One of them, Ethiopia, is a low-income country and the second most populous country in the region. The three economies vary not only in terms of their income per capita but also in terms of their production and export structure (with different roles for agriculture, mining, manufacturing and services), the characteristics of their labour market, their urbanisation rate and the depth of their financial system. Although all three economies faced some degree of economic slowdown and worsening fiscal space before the pandemic, the effect of, and the policy response to, Covid-19 have been different. In an effort to draw provisional lessons on the impact of Covid-19 in these economies, we will discuss the spread of the virus, the measures taken to slow it down, the external shocks associated with the global impact of the disease, and the economic policies taken to confront the challenge and the economic consequences of the pandemic, in terms of growth, fiscal and financial outcomes and prospects.
Hausmann, Ricardo, and Patricio Goldstein. "Economics of Covid-19 in three sub-Saharan African countries: Ethiopia, Namibia and South Africa." Shaping Africa's Post-Covid Recovery. Ed. Rabah Arezki, Simeon Djankov, and Ugo Panizza. CEPR Press, 2021, 195-213.