
<p>Sub-Saharan Africa has the potential to generate inclusive growth and eradicate poverty, according to the latest World Bank overview of the continent’s economic prospects.<sup>1</sup></p>



<p>“Sub-Saharan Africa, home to more than&nbsp;1 billion people, half of whom will be under 25 years old by 2050, is a diverse continent offering human and natural resources that have the potential to yield inclusive growth and eradicate poverty in the region. With the world’s largest free trade area and a market of 1.2 billion consumers, the continent is creating an entirely new development path, harnessing the potential of its resources and people,” the World Bank says.</p>



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<p>However, between the recognition of this potential and its realisation – the day when all Africans are freed from poverty – an enormous amount of work remains to be done. As the continent marks Africa Day today, it is useful to consider what is required.</p>



<p>A 2021 Economic Development in Africa Report by the United Nations Conference on Trade and Development (UNCTAD) states that one condition for achieving inclusive growth in Africa is that workers must acquire better skills to respond to evolving labour market demands.<sup>2</sup></p>



<p>It says inclusive development relies on the capacity of social, economic and political systems to provide the circumstances for well-being on a sustainable, long-term basis.</p>



<p>“Therefore, inclusive development should be measured along the interconnected dimensions of human, social and economic development and environmental considerations,” the report says.</p>



<p>In addition, inclusive growth requires higher rates of female participation, yet women remain marginalised in the labour market in Africa.</p>



<p>The private sector has a major role to play in enabling inclusive growth. It is both the engine of economic development and dependent on a flourishing continent for its own success.</p>



<p>At Coca-Cola Beverages Africa (CCBA), our aim is to create greater shared opportunity for the business and the communities we serve across the value-chain, and our social and community ambitions address some of the most immediate needs in Africa.</p>



<p>We believe in creating inclusive growth opportunities for communities, with our focus on women and youth. More relevant in Africa than any other continent, women are integral to our continent’s shared success and are often the decision drivers behind consumer spending trends.</p>



<p>We seek to empower women both in the workplace and through community programmes throughout our markets on the continent.</p>



<p>We support female entrepreneurs to thrive through the provision of financial support, mentoring and training.</p>



<p>An example is the Entoto women empowerment programme in Ethiopia, which was launched in 2020. It has enabled more than 260 women to earn higher incomes by collecting and selling used plastic bottles and distributing The Coca-Cola Company’s products – and in turn also aided our environmental initiatives in relation to recycling.</p>



<p>As we see significant growth potential in Ethiopia, we established nine new intensive training centres to increase the amount of polyethylene terephthalate (PET) collected, resulting in more than 400 women having received intensive training on PET reuse and recycling.</p>



<p>In addition, we also embarked on a market development programme which empowered over 800 women business owners through the provision of coolers to sell more products and expand their businesses.</p>



<p>On the youth front, empowering young people and enabling their inclusion in the economy is critical if we are to achieve our vision of making Africa a better place for all.</p>



<p>We empowered over 15&nbsp;000 youth in 2021 across various of our markets to help make them active participants in the economy.</p>



<p>In South Africa, as an example, we established an enterprise development initiative in 2015, known as Bizniz-in-a-Box, to make a sustainable impact on youth unemployment by creating an ecosystem of viable micro-businesses offering complementary products and services in township communities.</p>



<p>Using the spaza shop as the anchor, each business operates out of a custom-designed container, covering various core needs of the local community. The programme offers young entrepreneurs an opportunity to learn business skills to enable them to grow and run their own business.</p>



<p>We have trained over 720 young entrepreneurs and rolled out over 220 Bizniz-in-a-Box outlets since the inception of the programme, of which 47% are female owned businesses.</p>



<p>Communities where we operate benefit by gaining access to more and/or better resources, which over time enable them to become more self-sufficient and sustainable.</p>



<p>Many members of these communities get employment opportunities they would otherwise not have, and some go on to start their own sustainable businesses through our enterprise development initiatives.</p>



<p>We understand the importance of nurturing from the grass roots level up and in Ethiopia, near one of our factories, we built a fully operational public school that accommodates up to 1,000 students. We built a similar school facility in Bahrdar community in 2019, and we are on track to complete our third school, which is located near our Ambo plant, for the local community.</p>



<p>Creating shared value is mutually beneficial to CCBA, as these individuals ultimately become CCBA consumers, with a real sense of Coca-Cola brand loyalty given the impact CCBA has had on their personal lives.</p>



<p>We continue to work with our supply chain to improve sustainable and ethical local sourcing practices, including a continued commitment to protect human rights.</p>



<p>As at the end of 2020, our local sourcing was at 83%, exceeding the global Coca-Cola target to source locally, 80% of the raw materials usually imported by 2022. This translates into increased opportunity for African suppliers, entrepreneurs and industrialists, helping to develop local economies, diversify goods made in Africa and support inclusive growth.</p>



<p>We continue to support our suppliers to upskill and improve the quality of materials to meet our high standards.</p>



<p>An example is in Ghana, where we sourced 100% of raw materials locally by 2020. Initially local suppliers didn’t have the necessary technical equipment and expertise to produce preforms, closures and labels according to our specifications and high standards.</p>



<p>We proactively supported local suppliers with technical skills and contractual off-take agreements which enabled them to purchase the required machinery to improve their standards.</p>



<p>With increased local sourcing, we saved costs on shipping, customs, clearing and inventory management, driving bottom line profitability – illustrating how economic inclusion can be beneficial to both businesses and local economies.</p>



<p>Another example is in South Africa, where we sourced 98% locally, including sugar.</p>



<p>Increasingly as the African Continental Free Trade Area takes effect, opportunities will open up for local manufacturers to produce higher-value goods and the development of intra-continental value chains that spur inclusive growth.</p>



<p>Companies like CCBA will play a significant part in empowering entrepreneurs, workers and communities to take full advantage of these opportunities.</p>



<ol type="1"><li><a href="https://www.worldbank.org/en/region/afr/overview#1">https://www.worldbank.org/en/region/afr/overview#1</a></li><li><a href="https://unctad.org/system/files/official-document/aldcafrica2021_en.pdf">https://unctad.org/system/files/official-document/aldcafrica2021_en.pdf</a></li></ol>


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Africa Day should spur action to end poverty and empower the continent to reach its full potential

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<p>The International Monetary Fund has maintained the 2021 forecast for Sub-Saharan Africa at 3.4 per cent, with an upgrade for South Africa following a strong positive surprise in the first quarter offset by downward revisions in other countries. The worsening pandemic developments in sub-Saharan Africa are expected to weigh on the region’s recovery. Malhar Nabar, Division Chief for World Economic Studies at the International Monetary Fund for more.</p>


IMF maintains 2021 forecast for sub-Saharan Africa

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<p>The IMF has predicted that economies in sub-Saharan Africa will grow at a 3.4 per cent rate in 2021 but what sectors will be behind this bounce back? Paul Ansah, Senior vice-President at Albright Stonebridge Group joins CNBC Africa for more.</p>


Albright Stonebridge Group: Agriculture

Albright Stonebridge Group: Agriculture, vaccine rollout essential to Africa’s COVID-19 recovery

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<p>Sub-Saharan Africa will be the slowest growing region in 2021, growing at 3.4 per cent compared to the global average of 6 per cent.</p>


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IMF: Sub-Saharan Africa to see slowest regional growth in 2021

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<p>Nigeria’s official unemployment rate surged to 33.3 per cent in Q4 2020 and neighbouring Botswana had a slight jump in Inflation with their rate now at 2.4 per cent. Ridle Markus, Africa Strategist at Absa Corporate &#038; Investment Banking joins CNBC Africa for more.</p>


Nigeria’s unemployment rate surges to 33.3%

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<p>Sub-Saharan Africa growth is estimated to rebound at 3.2 per cent in 2021, 0.2 percentage points higher from October forecast, according to the IMF&#8217;s latest economic outlook. How did EAC economies perform?</p>


IMF: SSA economies projected to rebound by 3.2% in 2021

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<p>It’s one step forward, two back, as countries in Sub-Saharan Africa grapple with the second wave of COVID-19, with some resorting to previous enforced lockdowns and curfews to curb the spread of the virus. But could this be a final nail in the coffin for many businesses or are governments lining up substantial economic stimulus? CNBC Africa spoke to Economic Analyst, Johnson Rukundo for more.</p>


COVID-19: How new lockdowns are impacting economic recovery in SSA

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<p>The World Bank has confirmed the economic downturn in Sub-Saharan Africa, with COVID-19 pushing the region into its first recession in 25 years. With the toll that the pandemic has taken on economic activity, growth is projected to fall to negative 3.3 per cent this year. The heavy blow could also erase at least five years of progress in fighting poverty. Joining CNBC Africa to unpack the latest report from the World Bank is Albert Zeufack, Chief Economist for Africa at the World Bank.</p>


COVID-19 plunges SSA into first recession in 25 years

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<p>In Sub Saharan Africa, the rate of access to clean water and sanitation, though increasing, remains disproportionately low compared to the rest of world.</p>


This initiative looks to boost access to clean water in East Africa

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<p>The global pandemic has had a profound impact on the digital landscape in Sub-Saharan Africa, as well as across the world. GSMA Thrive Africa, brings together the continent’s leaders to create Africa’s most influential technology experience. Akinwale Goodluck, Head of Sub-Saharan Africa at GSMA Thrive Africa joins CNBC Africa for more.</p>


COVID-19: How the pandemic is reshaping the digital landscape in SSA

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<p>The Economist Intelligence Unit has reported that foreign direct investment flows into Sub-Saharan Africa will fall by 30 per cent this year, with oil and gas producers facing the biggest knock. Pat Thacker, Editorial Director of India, Middle East &#038; Africa at the Economist Intelligence Unit joins CNBC Africa for more.</p>


EIU forecasts 30% decline in FDI flows into SSA in 2020


<p>JOHANNESBURG (Reuters) &#8211; Sub-Saharan Africa’s economy will contract this year after shutdowns disrupted activity and as daily cases of coronavirus are still rising in the region but a recovery is expected next year, a Reuters poll found on Friday.</p>



<p>Following months of lockdowns which have muted economic activity a Reuters poll taken in the past week suggested the region will contract 3.1% this year but bounce back to around 3.5% growth in 2021.</p>



<p>Some countries have begun relaxing restrictions but virus cases are still increasing, unlike in many developed countries that have started to show signs of recovery, so the uncertainty meant the range of forecasts for next year was wide &#8211; between flatlining and 4.8% growth.</p>



<p>South Africa has reported the most cases in Africa, partly reflecting more widespread testing, and it is harder to gauge the full extent of outbreaks elsewhere although there are no signs numbers are falling.</p>



<p>“Growth downgrades dominate in a region where external and fiscal buffers were already substantially eroded. The impact of COVID-19 will reduce growth even further,” Standard Chartered wrote in a note.</p>



<p>Nigeria, Africa’s biggest economy, was expected to contract 3.7% this year but bounce back to 2.0% growth next year.</p>



<p>Continental peer South Africa was expected to grow 3.5% next year following an 8.0% contraction this year, a Reuters poll showed last week. </p>



<p>However, Ghana, one of the continents oil exporters, was still expected to grow, expanding 1.9% this year and 4.2% in 2021.</p>



<p>“Despite the obvious downside risks from lower oil prices and headwinds from COVID-19, we believe Ghana has a decent growth outlook and reasonably comfortable external sector metrics relative to other African oil exporters,” said Michael Kafe, economist at Barclays.</p>



<p>“The fallout from COVID-19 and associated lockdown means GDP growth is likely to be weak this year. However, unlike other African oil exporters such as Angola, Gabon and Nigeria, where GDP growth is likely to contract this year, we expect Ghana to post positive GDP growth.”</p>



<p>Kenya &#8211; east Africa’s biggest economy &#8211; was expected to have a lacklustre performance this year with no growth, a poor outcome having averaged around 6% annual growth in the past decade.</p>


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Sub-Saharan Africa GDP to contract 3.1% this year

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<p>According to GeoPoll latest survey, it is estimated that almost half of the world&#8217;s population is at risk of job loss due to COVID-19. Kenya has already experienced over 1.2 million lost jobs. Joining CNBC for more on the financial impact of the virus in Sub-Saharan Africa is Joy Masimane, Client Service Lead East Africa at GeoPoll.</p>


GeoPoll on the financial impact of COVID-19 on Sub-Saharan Africa

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<p>Energy has a critical role for the delivery of health services. However, it is not adequately recognised as evidenced by the fact that only 28 per cent of health facilities in Sub-Saharan Africa have access to reliable electricity.</p>


WHO: This is how electricity shortage impacts healthcare delivery in Africa


<h3 class="wp-block-heading">KEY POINTS</h3>



<ul><li>Economic activity collapsed in Sub-Saharan Africa in the first half of the year.</li><li>Nigeria&#8217;s economy expected to shrink by 3.2% this year.</li><li>South Africa’s output is forecast to contract 7.1% this year, the deepest contraction in a century.</li><li><a>Angola, DRC &amp; Ghana are having to cope with weaker external demand &amp; lower prices for oil &nbsp;&amp; metals</a>.</li><li>Agricultural commodity exporters, Côte d’Ivoire, Ethiopia &amp; Kenya, have suffered from a collapse in demand.</li><li><a>Economic activity in Sub-Saharan Africa on course to contract by 2.8% in 2020, the deepest on record</a>. Growth could resume to 3.1% in 2021</li><li>COVID-19 pandemic likely to push millions in the region back into extreme poverty.</li></ul>



<p></p>



<h2 class="wp-block-heading"><strong><em>Recent developments:</em></strong><em> </em></h2>



<p>Sub-Saharan Africa has been ravaged by the COVID-19 pandemic, and economic activity collapsed in the first half of this year. The pandemic has taken a heavy human and economic toll, causing the most serious disruption to region-wide economic activity on record. Sub-Saharan Africa has suffered as a result of the impact of the pandemic on its key trading partners, the disruption to global travel and supply chains, and the collapse in global commodity prices, particularly for oil and industrial metals. These shocks have heightened risk aversion among investors and prompted unprecedented capital outflows.</p>



<p>In Nigeria and South Africa, activity has fallen precipitously in the first half of the year. <a>Several industrial commodity exporters, such as Angola, the Democratic Republic of Congo, and Ghana, have had to cope with weaker external demand and lower prices for oil and metals</a>, in addition to domestic disruptions. Agricultural commodity exporters, including Côte d’Ivoire, Ethiopia and Kenya, have suffered from a collapse in demand as well as disruptions to supply chains. The fall in global travel as a result of the pandemic has hit hard on countries with substantial exposure to travel and tourism, such as Cabo Verde, Ethiopia, Mauritius, Seychelles.</p>



<p>Inflation has crept up in the region, reflecting currency depreciations and supply chain upheaval. While many countries have announced fiscal support measures, in many instances these involve reprioritizing existing budgets given fiscal constraints. International institutions have called on bilateral creditors to suspend some debt payments.</p>



<h2 class="wp-block-heading"><strong><em>Outlook:</em></strong> </h2>



<p class="has-text-color has-very-dark-gray-color"><a>Economic activity in the region is on course to contract by 2.8% in 2020, the deepest on record. Per capita GDP is anticipated to fall even more sharply, likely pushing millions in the region back into extreme poverty. </a>Growth could resume to 3.1% in 2021 assuming the pandemic fades in the second half of the year, that domestic outbreaks of the virus follow a similar path, and that growth in major trading partners rebounds. Sub-Saharan Africa faces daunting hurdles to contain COVID-19 given weak health care capacity, lack of access to basic sanitation, and the prevalence of informal economic activity across much of the region.</p>



<p class="has-text-color has-very-dark-gray-color"><a>The economy of Nigeria is expected to shrink by 3.2% this year, given the collapse in oil prices, which represent 80% of the country’s exports, about a third of banking sector credit, and half of government revenues. South Africa’s output is forecast to contract 7.1% this year, the deepest contraction in a century, as stringent but necessary containment measures curtail economic activity.</a></p>



<p class="has-text-color has-very-dark-gray-color"><a>Economic activity among commodity importing economies is anticipated to shrink this year despite lower oil prices, as international travel restrictions weigh on tourist visits. Industrial commodity exporters’ GDP is similarly anticipated to contract in 2020 as domestic disruptions are compounded by low prices for oil and metals. Agricultural commodity exporters are also expected to experience a collapse in economic activity this year despite being somewhat insulated from commodity price declines, as foreign direct investment and tighter financial conditions delay investment.</a></p>



<h2 class="wp-block-heading"><strong><em>Risks: </em></strong></h2>



<p>Risks are tilted firmly to the downside. A longer lasting and more severe pandemic would trigger an even deeper recession in the region and have devastating effects on the health and well-being of the region’s population. The effects of the pandemic are expected to markedly increase the region’s vulnerability to debt distress, and these strains will be compounded by the increased borrowing necessary to fund larger deficits. Severely constrained government resources could lead to a curtailment of critical public services during the pandemic and further weigh on activity.</p>



<p>There are also growing concerns that the pandemic may cause a food security crisis in the region as border closures and trade restrictions disrupt trading in food and agricultural products. The region’s large numbers of displaced people could complicate efforts to prevent the spread of COVID-19. In addition, there is the risk of social unrest as governments prioritize efforts to thwart the virus and peacekeeping efforts lose momentum. Rising unemployment, falling incomes, and potential shortages of essential items could lead to instability and weigh on activity well after the pandemic has faded.</p>



<p><a href="https://openknowledge.worldbank.org/bitstream/handle/10986/33748/9781464815539.pdf">Download <em>Global Economic Prospects</em></a></p>



<h2 class="wp-block-heading"><strong>World Bank Group COVID-19 Response</strong></h2>



<p>“The&nbsp;<a href="https://www.worldbank.org/">World Bank Group</a>, one of the largest sources of funding and knowledge for developing countries, is taking&nbsp;<a href="https://www.worldbank.org/en/who-we-are/news/coronavirus-covid19">broad, fast action</a>&nbsp;to help developing countries strengthen their pandemic response. We are supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs. We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, support businesses, and bolster economic recovery.&nbsp; This includes $50 billion of new IDA resources through grants and highly concessional loans.”</p>



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<p><a href="http://www.worldbank.org/en/publication/global-economic-prospects">Download this data</a></p>


International travel for South Africans is now allowed, this is how it will work

This is how badly COVID-19 has ravaged Sub-Saharan Africa


<p>Given the severity of the Covid-19 pandemic, Africa could be facing an economic crisis of unprecedented magnitude. Although the peak of the epidemic has not yet hit the continent, all economic indicators are currently flashing red as a result of preventive measures such as lockdowns and national border closures across most of the continent.</p>



<p>Why should we be so concerned with what is happening across the Mediterranean? Because if the growth dynamic recorded in Africa over the past several decades stalls, it is Europe that will suffer the consequences in a later stage. Everything that has been undertaken with the help of development aid and the setting up of structuring partnerships at the economic level as well as at the health and education levels is at risk of being reduced to nothing. For example, more than 8 million children have been enrolled in primary and more than 160,000 in secondary education in Africa as a result of EU-funded interventions in 2013-2014. This ambitious partnership needs to continue on an ever-stronger footing. Needless to also say that a new wave of migration would also have an impact on our societies: the looming economic crisis would be coupled with a real political crisis that would undoubtedly give populist parties the upper hand in the next elections.</p>



<p>As European politicians, Africa is one of our priorities. Sceptics need only remember the first trip made by the President of the European Commission, Ursula von der Leyen; her first official trip, just a week after taking office, was to Addis Ababa, to the African Union&#8217;s headquarters. Two months later she went back, along with 20 of the 27 European Commissioners, a sign that Africa and the EU have a real “common destiny” and an ambitious partnership to rebuild.</p>



<p>We need to think, and fast, about how we can help our African partner in the race against time as it faces the predicted economic disaster in the wake of the global covid-19 pandemic. Let&#8217;s ask ourselves the right questions: what works in Africa, what are the factors for development and growth? One is undoubtedly Information and Communication Technologies (ICTs), since Africa had more than 400 million Internet users in 2018 – that’s 20% more than in 2017. Mobile phones are the preferred means of accessing the Internet (used three times more than computers) and the United Nations estimates that mobile phone operators are major job creators today. Before the crisis, it was predicted that the mobile phone industry would generate 7.9% of GDP and create 3.45 million jobs in sub-Saharan Africa by 2022.</p>



<p>As Co-Chair and Vice-Chair of the soon to be established RUMRA &amp; Smart Villages Intergroup in the European Parliament, we know how important access to a good Internet connection is as a factor for growth. The intergroup aims to “promote the integrated development of European territories in all their diversity”. And what is true for Europe is all the more true for Africa! ICTs facilitate access to education, they contribute to increasing business productivity, and they represent real added value in the agricultural sector, for example by giving family farmers access to targeted information on techniques to improve their yields.</p>



<p>In light of these facts, there is an urgent need to support the companies operating in the ICT sector that are working on providing Internet access and deploying fibre optics on the African continent, such as Vodafone, Orange, or Huawei Northern Africa. Huawei for instance provides 200,000 kilometers of optical fibre network coverage on the African continent, and owns 50% of the 3G and 4G networks. Orange invests 1 billion euros every year in network development in Africa and Vodafone now has more than 170 million mobile customers across eight African countries, with 4G networks launched in many African markets. These groups are engines of growth and potential solutions to the impending crisis. In this process we need to make sure not to single out any of these companies for geo-strategic considerations that should have no place in our economic considerations. As free marketeers our decisions need to be based solely on merit and the ability of any given company to provide the ICT solutions needed.&nbsp;</p>



<p>Without complicity, without naivety, we have to think about what will impact us positively in the short, medium and long term. Our fear is that our reluctance to move towards greater connectivity will impact our economies, and those of our neighbors, and Africa first and foremost. So let&#8217;s be responsible, let&#8217;s be political, and let&#8217;s take responsibility for our choices. ICTs are one of the ways out of the crisis caused by Covid-19, so let&#8217;s not deprive anyone, and especially not Africa!</p>



<p><strong>Franc Bogovic</strong>, Member of the European Parliament from Slovenia in the centre right group of the European People&#8217;s Party &amp;</p>



<p><strong>Engin Eroglu</strong>, Member of the European Parliament from Germany in the liberal Renew Europe Group</p>



<p>For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a></p>


Op-Ed: Supporting the ICT sector in Africa as a cure for the economic crisis


<p></p>



<h3 class="wp-block-heading"><strong>Key Points:</strong></h3>



<ul><li>Remittance flows to low and middle-income countries (LMICs) are projected to fall by almost 20% in 2020, one of the sharpest declines in history, according to the World Bank.</li></ul>



<ul><li>Sub-Saharan Africa is projected by the World Bank to suffer a 23.1% decline in remittances over the course of 2020. The region has the highest remittance costs, with the average transfer of $200 charged at about 9%.</li></ul>



<p>The <a href="https://www.cnbcafrica.com/east-africa/2020/05/28/how-covid-19-is-impacting-funding-for-african-start-ups/">coronavirus</a> pandemic is leaving migrant workers unable to send money or goods home to families, cutting off a vital lifeline for communities already under siege from a barrage of external shocks.</p>



<p><a href="https://www.cnbcafrica.com/east-africa/2020/05/21/covid-19-takes-toll-on-ssa-diaspora-remittances/">Remittance</a> flows to low and middle-income countries (LMICs) are projected to fall by almost 20% in 2020, one of the sharpest declines in history, according to the World Bank.</p>



<p>The coronavirus pandemic has led to mass unemployment and hammered wages in the U.S. and Europe, key destinations for migrant workers, leaving many unable to send money home.&nbsp;<br><br>A number of major European countries have introduced furlough schemes to partially subsidize wages for those unable to work, but many of those in less formal employment have still found themselves without income. For workers in the U.S., there is less of a social safety net, which has led to more than 40 million Americans filing for unemployment since the pandemic was declared in mid-March.</p>



<p><a href="https://www.cnbcafrica.com/news/2020/04/09/covid-19-drives-sub-saharan-africa-toward-first-recession-in-25-years-world-bank-report/">Sub-Saharan Africa</a> is projected by the <a href="https://www.cnbcafrica.com/east-africa/2020/05/21/world-bank-approves-500mn-to-aid-africas-fight-against-locust-plague-covid-19/">World Bank</a> to suffer a 23.1% decline in remittances over the course of 2020. To compound the tighter financial conditions for African migrant workers, in the first quarter of 2020, the region continued to have the highest average remittance costs, with the average transfer of $200 charged at about 9%.</p>



<p>Even for those who have maintained the financial capability to transfer money, lockdown measures have impacted access to MTOs (money transfer operators) in receiving countries.</p>



<p>Oxfam and around 90 other NGOs, academics and aid workers recently penned a letter to international bodies documenting the impact of the plunge in remittance payments in Somalia, in particular.</p>



<p>The letter urges the U.S. and European governments to take urgent action to facilitate wiring or other payment settlement mechanisms, and calls on Somali officials, MTOs, international banks and bodies such as the UN to coordinate efforts to boost the accessibility of remittance payments.</p>



<h2 class="wp-block-heading">Somalia: A case study</h2>



<p>Many domestic economies in Sub-Saharan Africa are suffering as a result of shutdowns associated with the coronavirus pandemic, and in some cases dealing with multiple concurrent shocks such as historic <a href="https://www.cnbcafrica.com/east-africa/2020/05/27/locust-plague-covid-19-weigh-on-east-africas-economic-outlook/">locust swarms</a>, droughts, flash flooding or violent insurgencies.</p>



<p>Almost half of all households in Somalia rely on remittances to cover basic needs such as food, water, health care and education. The UN estimates that 4.1 million Somalis are food insecure in 2020, while around 2.6 million are internally displaced and more than a third have insufficient water for their basic day-to-day needs. The country’s total population is just over 15 million, according to World Bank data from 2018.</p>



<p>The above average rainy season anticipated in the coming months is expected to exacerbate the flash flooding which has devastated communities, along with offering ideal breeding conditions for the locust swarms that have affected around 360,000 hectares of land.</p>



<p>Meanwhile, conflict continues to rage between government forces, clan actors and insurgent groups, including notorious terror organization Al Shabaab.</p>



<p>Some MTOs in Somalia have had their bank accounts closed due to bank concerns about exposure to terrorism financing and anti-money laundering regulation, preventing access to their online services, according to the letter. Others have been rendered unable to reach more remote locations of the country, including settlements for internally displaced persons and refugees, the most vulnerable portion of the population.</p>



<p>“MTOs not only provide the only viable mechanism to legally and transparently send money to Somalia/Somaliland, they also serve a dual function in terms of providing letters of credit to Somali traders who come to Dubai, Djibouti and other international hubs to purchase essential food and nonfood items for sale inside Somalia/Somaliland,” the letter explained.</p>



<p>“Across the U.S. and around the globe, Somalis are working hard to support their families back home,” Scott Paul, Oxfam America’s humanitarian policy lead, said in a recent statement.</p>



<p>“Sadly, many have fewer resources to share today, and because of the U.S. government’s irresponsible approach to bank regulation, banks have been scared away from helping Somalis send what they can.”</p>



<p>Paul called on the Treasury Department in the U.S. and governments elsewhere to take urgent action to enable Somali families to cover their “rent, food, medicine and school fees as Covid-19 spreads.”</p>



<p>As of Friday morning, Somalia has 1,828 confirmed cases of Covid-19 with 72 deaths.&nbsp;</p>



<p>Oxfam’s country director in Somalia, Amjad Ali, said the pandemic is “laying bare and exacerbating inequalities” and highlighting that “too many among us are living on the brink.”</p>



<p>“We now need to see leaders step up to support vulnerable communities with the social protection they need and deserve, while also easing the way for families to support each other through hard work and remittance payments.”</p>



<p>This article was first published on CNBC <a href="https://www.cnbc.com/2020/05/29/coronavirus-migrant-workers-struggle-to-send-money-home-during-the-crisis.html">https://www.cnbc.com/2020/05/29/coronavirus-migrant-workers-struggle-to-send-money-home-during-the-crisis.html</a> and is republished with its permission.</p>



<p>For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a></p>


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Sub-Saharan Africa

Africa Day should spur action to end poverty and empower the continent to reach its full potential

IMF maintains 2021 forecast for sub-Saharan Africa

Albright Stonebridge Group: Agriculture, vaccine rollout essential to Africa’s COVID-19 recovery

IMF: Sub-Saharan Africa to see slowest regional growth in 2021

Nigeria’s unemployment rate surges to 33.3%

IMF: SSA economies projected to rebound by 3.2% in 2021

COVID-19: How new lockdowns are impacting economic recovery in SSA

COVID-19 plunges SSA into first recession in 25 years

This initiative looks to boost access to clean water in East Africa

COVID-19: How the pandemic is reshaping the digital landscape in SSA

EIU forecasts 30% decline in FDI flows into SSA in 2020

Sub-Saharan Africa GDP to contract 3.1% this year

GeoPoll on the financial impact of COVID-19 on Sub-Saharan Africa

WHO: This is how electricity shortage impacts healthcare delivery in Africa

This is how badly COVID-19 has ravaged Sub-Saharan Africa

Op-Ed: Supporting the ICT sector in Africa as a cure for the economic crisis

Sub-Saharan Africa to suffer 23.1% decline in remittances in 2020 – World Bank

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