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Policy Working Paper 04/2020

Assessment of COVID-19 Effects and Response Measures in Ethiopia: livelihoods and welfare implications 

Degye Goshu, Mengistu Ketema, Getachew Diriba and Tadele Ferede

Incidence of COVID-19 pandemic that started in China in December 2019 and then spread to the entire world has adversely affected the world economy and threatened the welfare of populations. Since incidence of the first case on 13th of March 2020 in Ethiopia, the government has designed several mitigation and containment measures to reduce exposure and to control the pandemic. Awareness creation among the public was aggressively undertaken by the Government including the declaration and the enforcement of the state of emergency.

Following the issuance of ‘Economic and Welfare Effects of COVID-19 and Responses in Ethiopia: Initial insights’ in April 2020, and ‘Economy-wide effects of the COVID-19 in Ethiopia: Policy and Recovery Options’, July 2020, both by the Ethiopian Economics Association; this study is designed to assess the level and efficacy of awareness of mitigation and containment measures that have been intended to lessen the impacts of the pandemic on welfare of households. The welfare assessment mainly focuses on the dynamics of employment, livelihoods, income, coping strategies against income loss, food insecurity, social safety nets and access to basic services.

To assess public awareness and action to the pandemic, the first-round household-level baseline data collected by the World Bank using high frequency phone call between April 22 and May 13, 2020 is utilized. It covers 3249 households in all regions of the country (30 percent rural and 70 percent urban). The data is supposed to provide the Ethiopian government and other stakeholders timely information and to support evidence-based response to the COVID-19 crisis.

The results of the study confirm that knowledge on the pandemic has been created in both rural and urban areas of the country. Eight mitigation measures (avoiding travels and crowds/gatherings, avoiding touching faces, social distancing, avoiding handshakes/physical greetings, and handwashing have been well perceived by about 83 percent or more of rural and 95 percent or more of urban households. Although masks or gloves have been understood by rural (61 percent) and urban (77 percent) households, it is less so compared to other measures.

Households have also different levels of awareness on the containment measures taken by the government. The study assesses households’ knowledge of 14 containment measures. One of the containment measures taken by the government to reduce exposure of citizens to the pandemic on which better understanding is created is ‘stopping or limiting social gatherings’. About 79 percent of the households have knowledge on the benefits of this containment measure to control the pandemic. The top nine containment measures taken by the government, in order of awareness created, are the following:

1.         Stopping or limiting social gatherings (79.3percent);

2.         Advice to citizens to stay at home (41.7 percent);

3.         Closure of schools & universities (30.7 percent);

4.         Creating hand washing kiosks or facilities (26.6 percent);

5.         Dissemination of knowledge about the virus (24.3 percent);

6.         Restricted travel within the country/area (21.1 percent);

7.         Curfew or lockdown (14.4 percent);

8.         Provision of food to the needy or vulnerable social groups (10.9 percent); and

9.         Closure of non-essential businesses (10.2 percent).

More importantly, the greatest proportion of households have developed behavioural changes related to the most important habits:handwashing with soap (98.4 percent), avoiding physical greetings (96.1 percent), and avoiding crowds and gatherings (83.1 percent). To control the pandemic, these behavioural changes should further be practiced by all households in both rural and urban areas of the country.

The pandemic in Ethiopia has created substantial dynamics/changes in the spatial and sectoral distribution of employment conditions following the pandemic. The normal operation of nearly all sectors have been adversely affected since the outbreak of the pandemic.

Households reported that agricultural operations are less adversely affected by the pandemic at the time of the phone survey. Large majority of farm households (95.7 percent) responded that they are normally undertaking their agricultural operations, which is not a surprising response as the timing of the data collection represents the pre-kremet (main planting season). For various reasons, only 4.3 percentof the farm households were not able to run their farm operations normally. The top three reasons for their abnormal farm operations are the government advice to stay at home (36.7 percent), agricultural labor shortage (28 percent), and problems related to weather conditions (19.3 percent).

About 82.4 percent of the household members have lost their job due to the pandemic and the remaining 17.4 percent due to other reasons. Households employed in the non-farm business activity are differently affected by the pandemic. About 42 percent of the households engaged in the non-farm business activities are employed in wholesale and retail trade followed by agriculture (11 percent), public administration (10.4 percent), transport services (8.4 percent), and personal services (8.2 percent). The other sectors contribute to the remaining 30 percent of employment activities in the non-farm business sector.

Sectoral distribution of employment has undergone significant changes since the outbreak of the pandemic. This employment dynamics is reflected in terms of changes in the number of jobs compared to the base period (before the pandemic). As expected, the service sector is the primary victim of the pandemic. The top sixeconomic activities where substantial proportion of jobs are lost are the following:

1.         Construction with 69 percent of jobs lost;

2.         Hotel and Restaurants with 66 percent of jobs lost;

3.         Wholesale and retail with 62 percent of jobs lost;

4.         Industry/manufacturing with 42.2 percent of jobs lost;

5.         Transport services with 37 percent of jobs lost; and

6.         Personal services with 31 percent of jobs lost.

The top three reasons of job loss in the non-farm business activities include: Jobs lost due to the virus (62.5 percent), termination of causal employment contract (19.5 percent), and temporal absence (11.4 percent). Other non-farm business activities contribute about 7 percent jobs lost since the outbreak of the pandemic.

Impacts of the pandemic on income of households is varied across sectors, regions, and place of residence. About 58 percent of households engaged in non-farm business have experienced income loss, whereas 27.5 percent of them have lost their entire income since outbreak of the pandemic. The second source of livelihood adversely affected by the pandemic is remittance from abroad, 39 percent of the households reportednear-total loss of their income. Other losses of livelihoods including farming (39.5 percent), investments and savings (34 percent), domestic remittance (33percent), wage (21 percent), and NGO assistance (20 percent) are also adversely affected by the pandemic.

The study shows that 49.8 percent of rural and 52.4percentof urban households faced income loss/reduction since the outbreak of the pandemic. However, total income loss is relatively higher among urban households (6 percent) compared to their rural counterparts (2 percent). The top five regional states with incidence of income reduction since outbreak of the pandemic are Somalie (83.7 percent), Harari (61.8 percent), Tigray (56.2 percent), Oromia (55.6 percent), and SNNP (49.7 percent).

Although the World Bank survey was conducted early in the progression of the pandemic in Ethiopia,nevertheless, 23.4percentof the households reported shortage of food of which 21percent reported lack of resources, and 14 percent reported being hungry. The reported incidence of food insecurity, in April and May which is a month later after the first cases of the virus was reported, is likely to be a reflection of an underlying chronic food deprivation than only caused by the COVID-19.

The other impact of the pandemic is related to access to health services and facilities. However, since the outbreak of the pandemic, about 13 percent of the households were not able to buy enough medicine. About 17 percent of the households required medical treatment but 86 percent of them had access to medical treatment. Households were not able to access medical treatment because of lack of money (41 percent), shortage of medical supplies (20 percent), lack of transportation (16 percent), closure of health facility (8 percent), and absence of medical personnel (7.5 percent). The top three reasons for households for their inability to buy enough medicine are decrease of regular income (69 percent), shortfall of supply at drug shops (12.6 percent), and price increase of medicine (8.3 percent).

Recommendations:

1.   Widening, strengthening and sustaining public awareness campaign:the government, the media and other stakeholders must continue heightened public awareness campaign to further improve the knowledge aboutthe proposed mitigation and containment measures both in rural and urban areas of Ethiopia.

2.   Continuing targeted government support to the functioning of vital sectors of the economy including agricultural activities, construction, manufacturing, services, and industries to an extent it is feasible and supported by both domestic and international markets:Greatest majority of households engaged in non-farm business sectors are more adversely affected by the pandemic. The trade sub-sector, wholesale and retail trade in particular, is the primary business activities where most urban households generate income and livelihoods. It is also the main marketing channel where the balance between the supply of and the demand for goods is maintained for minimizing demand and supply shocks and reducing welfare losses in both rural and urban areas. The government should continue to stabilize the smooth functioning of the marketing of major staples.

3.   Protection of jobsand creationof newones: In spite of government efforts and other stakeholders, job losses are widely reported in construction, hotels and hospitality, merchandising, education, and health. In addition to welfare transfers to households who may have lost jobs or unable to command purchasing power, the government and the private sectormust work in tandem to maintain the functioning of key economic and service sectors.

4.   Rollout new and expand on the existing social assistance programs such as rural and urban safety nets:The major livelihoods of households largely affected by the pandemic are non-farm business, remittance, and NGO and government assistance. Related to its fragile nature of livelihoods, greatest proportion of households in Somalie region also faced exceptionally higher incidence of income loss. The income of households living on these livelihoods has been significantly reduced. Particular focus and support are needed to urban households experiencing total loss of their income due to the pandemic. As the COVID-19 duration extends into July/August, the traditionally ‘food deficit season’, it is expected that increasing number of households will experience severe food deprivation. An extended relief measures for targeted households must be considered, including expansion of PSNP and direct emergency assistance.

5.   Continue to maintain an uninterrupted and integrated supply chain throughout the country:Trade activities within a community, markets, across districts, and regions must be sustained not only to facilitate commodity exchange, but also to help create and maintain jobs. Price rise of major food items coupled with income loss by households has jeopardized significant proportion of such households. The government should design suitable market stabilization measures to smooth supply and consumption of major food staples, essential medicines, and access to medical services.

6.   Maintain and strengthen access to health services for both the COVID-19 and other patients: There is a need to balance and strengthen basic health facilities for the regular health services in parallel with combating the COVID-19. If this is not considered, there is a risk that more deaths could be recorded because of diseases other than COVID-19, such as other (non)-communicable diseases.

Education system consideration: One of the major impacts of the COVID-19 is its effect on the entire educational system. Advance planning and parental information are needed about the coming academic year, that is, when schools (kindergarten, primary, secondary, and university education) would be opened. If and when school opening is considered, the Ministry of educationand Ministry of Science and Higher Education in collaboration with relevant stakeholders (e.g. health sector players) must provide guidelines and details about containment and protection measures...Read More