The easing of the three-week-long partial lockdown imposed by the Government of Ghana under the Imposition of Restrictions Act, 2020 (Act 1012) has occasioned cleavages among different actors.

The lockdown - freeze on economic and social activities - and the subsequent lifting, which is one of the many strategies being used to contain the spread of the novel coronavirus has become the most topical issue. Just as many; politicians, healthcare experts, policymakers, social commentators, CSOs and others favoured the imposition of the restrictions, many also opposed it.

When the furlough was lifted, that decision too was greeted with some disdain. Some alluded to economic consideration rather than people’s health as the reason for lifting the restriction.

Some even mentioned the Electoral Commission’s desire to have a new register for the December elections as the main reason for the easing of the restrictions.

Given the differences in notion among different actors and the various dogmas assigned for why the restrictions were eased, the article attempts to determine if economic reasons are the primary drivers for the removal of the restrictions.       

It is undeniable that the novel Covid-19 pandemic has tranced many economies. Indeed, the impact of the virus is already being felt with the global death toll count crossing 200,000 mark as of 26th April 2020.

Many economies are showing signs of giving in, a situation which will upend the gains in economic development and poverty reduction over the past years. Some studies are predicting that if the rate of infection does not slow, sooner or later, there could be social unrest in many developing countries primarily on the back of weak healthcare systems and food shortages.

The pandemic is not only having a debilitating impact on health and economies, but regrettably, it is also having an impact on the social life of individuals around the world.

Levers put in place by governments to prevent the spread of the virus such as restrictions on the movement of people, social distance protocols and ban on social gathering (Funerals, religious activities, political activities et al.) are changing the sociocultural settings of humans drastically. Obviously, no nation (advanced, emerging or developing) is spared by Covid-19, and the world is not in normal times.

The International Monetary Fund (IMF) in its April 2020 edition of Regional Economic Outlook is predicting that Sub-Saharan Africa’s 2020 economic growth will sharply plummet to -1.6% from an October 2019 projection of 5.2%. The revision of the projection is against the backdrop of expected slower economic activity on the continent as a result of Covid-19 and the plunging international oil prices.

The growth forecast is the lowest in history with oil-intensive countries (Nigeria, Angola, South Sudan and Cameroon) set to have the worse GDP growth. Tourism dependent countries (Cabo Verde, Comoros, The Gambia, Mauritius, São Tomé and Príncipe, Seychelles) will not be spared either as they also will see a significant dip in growth. It is important to note that the slam in growth on the back of Covid-19 is particular to Sub-Sahara Africa alone.

Indeed, the rest of the world is set to record a higher dip in growth as global growth will sharply contract by -3% end 2020 according to the IMF’s World Economic Outlook published earlier in April 2020. With the right policies and normalisation of economic activities, growth blips are expected to recover in 2021. For Sub-Saharan Africa, growth is projected to rebound at circa 4.0% in 2021, and the global economy at 5.8%.

What is being done by Sub-Saharan Governments?

In the meantime, the focus of governments of Sub-Sahara Africa has been about how to limit the spread of the virus. Over the past few weeks, we have seen in some countries, extensive testing and contact tracing of suspected people, and in instances where the testing has proved positive, such persons have been quarantined and treated accordingly. There are about 29,000 confirmed Covid-19 cases in Africa with 8,364 recoveries and 1,331 deaths as of 25th April 2020.

To ensure that the Covid-19 spread is curtailed, various governments have intensified education on the virus, the influx of humans across countries have been banned, and in many cities, full or partial lockdowns are still in force. Countries on lockdown are seeing a massive impact of the measure on many citizens. This is mainly due to the informal nature of African economies and also because of the lax social protection systems in many African countries.

To lessen the impact of Covid-19 measures on the vulnerable groups, in some countries (Ghana and the Democratic Republic of Congo) the partial lockdown has been relaxed. In addition to the easing of restriction, which we are told are informed by science and data, Covid-19 related policymaking appears to place emphasis on the poor who are the worse affected by the pandemic.

We have seen the implementation of the “people first” strategy where investments in healthcare systems have been scaled up regardless of fiscal and debt implications. As the President of Ghana aptly echoed "We know what to do to bring back our economy back to life. What we do not know how to do is to bring people back to life." This certainly is a clear manifestation of people first stands against the Covid-19.

We are also witnessing fiscal support being extended to the most affected (individuals and businesses). Some countries are extending small grants and loans to businesses worse affected. Some states are footing the utilities (water and electricity) bills of citizens. Some countries of the continent are considering the possibility of extending direct cash transfers and also payment of rent of citizens.

External debt (bilateral and multilateral concessional debt) standstill are also under consideration. Indeed, some member countries of the International Development Association (IDA) have already or are about to receive debt forbearance. In support of these fiscal policy measure has been equally aggressive monetary policy stands of the various Central Banks to support the Covid-19 fight.

These measures have macroeconomic economic implications as they alter the strands of planned fiscal and monetary policy, increases fiscal variations in budget, and reallocation of resources from other critical sectors of the economy to support Covid-19 related activities. These economic re-alignments are not necessarily due to lockdown or not, but are as a result of the pandemic.    

Do lockdown or No lockdown have any economic impact?

The response may not be one direction. The economic vulnerabilities of Covid-19 to countries can be categorised under three main shocks; domestic health shock, spillover from the global fallout of Covid-19 shock and Oil price plummet shock.

Some say an efficient lockdown prevents a person to person contact, which reduces the virus transmittal rate. When a lockdown is done well, one is likely to overcome the challenge the pandemic could pose to healthcare infrastructure, which in many Sub-Saharan Countries are weak. A lockdown ameliorates the domestic health shocks as it reduces contact among persons and possibly results in fewer contagion cases requiring healthcare support.

However, there are other Covid-19 vulnerabilities that even with a lockdown, may not be mitigated. A lockdown or not simply cannot change the consideration of other nations outside the continent, especially that their actions or inactions on the pandemic are independent of concerns of others. However, their actions have implications for the economic fortunes of the sub-region.

In specifics, the economic vulnerability shocks from Covid-19 can be categorised into five namely: the condition of the global financial market and the level of integration of a country; the country’s level of trade linkage with China and Europe; the possible changes in a country’s terms of trade; the level of a country’s dependence on tourism, the country’s healthcare system quality and finally the public debt profile of the country. The exposure level of a country to any of these factors is the most important consideration when assessing the economic impact of Covid-19. Therefore, imposing restrictions or not may have minimal effect on these factors, since the pass-through mechanisms are not country-specific.

Table 1: Level of Vulnerability to COVID-19 shocks by Selected Countries

In the case of Ghana, the lifting of the lockdown does not immune her from the economic woes of Covid-19. The country has a high vulnerability to global financial conditions, high public debt burden and moderate vulnerability to trade with China and Europe. These risks cannot be suppressed solely by actions of Ghana, but also requires a response from the rest of the world.

Given these vulnerabilities, it is difficult to state that imposition of a lockdown or not will make any difference when accessing the economic cost of Covid-19. The economic woes of any country will not soothe with or without restrictions when the external vulnerabilities are still rift and live.

The reason here is that the transmittal economic effect from the pandemic to many Sub-Sahara Africa countries is varied and comes from domestic and external sources. It seems that the external factors have a significant economic impact on countries because they are externalities that sovereigns will hardly be able to do anything about alone. Indeed, a decision to lockdown a country will be because it helps to reduce infection rate, protect the poor and the vulnerable in society and not for Covid-19 economic benefits given that many Sub-Sahara Africa countries have a high external vulnerability to the virus. 

With this understanding, it essential to indicate, the decision to relax the partial lockdown in Ghana and DRC be looked at critically. It is evident that economic considerations may be minimal in such decision making; instead, it based on science and data. Any future revisions of the measures, I presume will still be done on the face of the evidence.

To ensure the lockdown does not surface again would require of all us to help reduce the spread of the virus by adhering to the protocols put forward by the health experts including frequent washing of hands under running water, observing social distancing, avoid touching face, wearing of face mask, sanitise hands as often as one can and lastly, stay home if there is no reason to go out.

Importantly, when we observe these protocols, we will be reducing future lockdown(s), which will be a significant relief to many of our citizens who depend on daily income for survival. It reduces the stress on the national purse from social protection expenses. By observing these protocols, the continent will free resources enough to deal with the external havoc on its economy brought about by the Covid-19. 

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The author,  Henry, Kyeremeh is co-Founder of iWatch Africa