Socio-economic impact analysis of COVID-19
Ethiopia
Highlights
The overall macroeconomic impact of COVID-19 will be severe, and could have long-lasting consequences on human development; protecting expenditure on social sectors is therefore crucial. The slowing down of the economy due to COVID-19’s impact on key sectors for the country could, in the worst case, force the government to consolidate its expenditure. Cuts to key social sectors like health and education could be highly detrimental for the medium to long-term economic development of the country, potentially putting at risk development gains achieved recently by the country.
Several segments of the population, including children and women are vulnerable to health shocks resulting from COVID-19. Beyond the effects of the disease itself, the consequences of the pandemic extend into many other health aspects. This includes limiting access to healthcare, suspending routine health services, and negatively impacting people’s psychosocial wellbeing. Amidst the many groups that are vulnerable to these shocks, frontline health workers are worthy of note as they are most likely to contract the disease and they also face challenges accessing adequate personal protective equipment. Protecting healthcare workers is also fundamental for preserving the healthcare system’s capacity in the near and medium term.
COVID-19 does not impact all social groups in the same way, which raises the risk of increased inequalities and social exclusion. The welfare and wellbeing of the populations that are already socially and economically excluded is particularly likely to be affected. Inequalities such as those present between sexes, urban and rural areas, wealthy and poor, or ethnic groups, are likely to widen. The good functioning of protection mechanisms that target the most vulnerable groups is crucial to ensure that no one is left behind. The constant monitoring of the spread of the disease and its consequences is also needed to ensure that the responses evolve accordingly.
As a consequence of the economic slowdown, and the general health crisis, many households will face significant income shocks. This can come due to loss of employment, direct costs of the disease, or a drop in remittances. Urban populations working in the informal sector – a large part of whom are women – could be particularly affected. Consequentially, food insecurity and poverty are likely to increase. Social protection schemes like the UPSNP will be crucial for mitigating these impacts.
The analysis conducted includes a Socio-Economic Impact Analysis and a Vulnerability Assessment which are summarised in a Policy Brief and in Vulnerability Impact Fiches.
