Economic stimulus packages needed to save SADC economies
It is not looking good for the SADC region in as far as economic performance is concerned as the coronavirus pandemic, coupled with a poor agricultural season, take their toll on virtually all the 16 members of the regional bloc.
With a majority of the SADC member states on lockdown due to the Covid-19 pandemic, it is expected that their economies will be in a tailspin this year. While the situation is not confined to the SADC region alone as elsewhere across the region, even in the world’s largest economies such as the United States of America, China, Japan, Germany and others, the situation in the SADC region is compounded by the poor rains received during the 2019/2020 region.
Most countries in the SADC region, as in most other regions of the African continent, largely rely on agriculture and if this sector sneezes, they all catch a cold. Already, regional economic powerhouse, South Africa, is feeling the pinch economically due to Covid-19. Apart from recording the highest number of Covid-19 cases and deaths in the Southern Africa region, South Africa is battling with economic repercussions of this pandemic that has ravaged the entire globe.
As if this is not enough, last week we reported that there are fears that millions of hectares of land and crops will be devastated by floods alternating with drought in the Southern Africa region.
In its latest Southern Africa Seasonal Updated report, the World Food Programme (WFP) expressed concern that like the previous season, the 2019/20 season has thus far been marked by an unusual dichotomy of severe drought and flooding in the Southern Africa region.
The report, which was based on data from interviews with 986 traders in 195 markets across 42 rural and urban districts in the region, states: “October to December 2019 was one of the driest seasons since 1981 for southern Zambia, northern and western Zimbabwe, and southern Mozambique, as well as parts of South Africa, northern Botswana, and western Namibia.”
It says this season’s dryness is having a compounding effect on the previous season’s drought conditions. In northern and central Madagascar and Mozambique, as well as parts of Tanzania, DRC, and Angola, high rainfall continued in January 2020 and there have been reports of flooding. Although predominantly dry, parts of western Zimbabwe and southern Zambia have also experienced flash flooding.
Now this is worrying given the circumstances in which the region finds itself under. Covid-19 is already wrecking havoc with not only peoples’ lives, but economies as well. In Namibia, the Ministry of Agriculture, Water and Land Reform is worried about the difficulties that the coronavirus pandemic would bring to the already stretched agricultural sector.
The agriculture sector remains central to the lives of the majority of the country’s 2.5 million population. The sector, directly or indirectly, supports over 70% of the country's population. Agricultural production, and subsequently household income, is low in the subsistence sector due to chronic drought and consequent water shortages resulting in death of animals and crop failures, widespread soil erosion and land degradation.
The agricultural ministry is now fearing the worst after Namibia was put on lockdown – restricting the movements of goods and people due to the coronavirus worldwide outbreak. Apart from the agriculture sector on which more than 150 million people across the region relies on for food, tourism, which is a low-hanging fruit for most countries in the SADC region, thanks to attractive sights and abundant wildlife, has also been the hardest hit as people stay indoors.
This grave situation is obtaining in other countries across the region such as Angola, Botswana, the Democratic Republic Congo, Eswatini, Lesotho, Malawi, Mauritius, Mozambique, Tanzania, South Africa, Zambia and Zimbabwe.
The lockdowns in most of these countries have gravely affected businesses and workers are likely to be more affected as companies might not be able to pay full salaries. Others might close down if the pandemic is not controlled and a vaccine is not found soon.
That is why we believe that the only solution for SADC and African countries is for a stimulus package from developed countries and international financial institutions. While we do not advocate for African countries to be beggars, we believe given the obtaining scenario, only financial bailouts by the world’s richest nations and their banks will help the continent to recover. The pandemic has derailed the SADC region’s plans which are aimed at advancing the economies, infrastructure development and integrating their peoples.