COVID-19 and Ukraine war impacts on Africa
Published on 02 July 2022
Overview
COVID-19 and Ukraine have impacted African countries in different ways. What are the short-term impacts of these events on development indicators?
The COVID-19 pandemic and efforts to contain the spread of the disease have disrupted world trade and have increased countries’ vulnerability to poverty. The war in Ukraine has compounded the socioeconomic problems caused by the COVID-19 pandemic, thus jeopardizing achievement of SDGs.
Based on the results of a recent assessment, this page shows the short-term impacts of COVID-19 and the war in Ukraine on several sustainable development indicators (SDG 2, 8, 9, 10 and 17). This analysis was conducted for 16 African countries - Democratic Republic of Congo, Egypt, Ethiopia, Ghana, Guinea, Kenya, Malawi, Mali, Mozambique, Niger, Nigeria, Senegal, South Africa, Tanzania, Tunisia and Uganda – that jointly account for more than 70 percent of Africa’s GDP and 67 percent of the population of the continent.
Some of them are heavily dependent on imports of oil, maize and wheat from Ukraine and Russia.
In this scenario, which is the baseline, the objective is to define the trajectory of the economy (in terms of GDP growth, growth of value added in agriculture, industry, manufacturing, and services) over the period 2020-2022 using past trends, i.e., before the COVID-19 pandemic. For this purpose, we first establish sectoral total factor productivity (TFP) growth rates and then use annual international market price changes over the 2020-2022 period. These price changes are calculated from the price forecasts published in October 2019. The underlying assumption is that these projections were made using the trends observed in the past, before the COVID-19 pandemic.
To derive the impact of the war in Ukraine alone, we compare results (difference) from the COVID-19 scenario with results from the Ukraine + COVID-19 scenario.
In this scenario, we set the TFP to mimic observed sectoral growth rates during COVID-19 period (2020-2021). However, the annual price changes (over 2020-2022) for this scenario include the COVID-19 effect because they are calculated from the October 2021 price forecasts for 2021 and 2022. As the pandemic struck in 2019, the assumption is that these projections take into account COVID-19-related risks. Under this scenario, we use the predictions of prices for 2022 from the World Bank as of October 2021.
Under this scenario, we keep the TFP at the same level as in COVID-19. Unlike the COVID-19 scenario which gives prices before the war in Ukraine the prices predicted in April 2022 are forecasts for 2022 which include both the COVID-19 effect and the effect of the war in Ukraine. Since Russia's invasion of Ukraine began in February 2022, the assumption is that these projections capture the risks associated with both Covid-19 and the ongoing war in Ukraine. Therefore, the Ukraine scenario includes changes in prices due to COVID-19 and war in Ukraine.
Rising Prices of commodities
Commodities prices have significantly increased in both scenarios. However, compared to the BAU scenario, international market prices are higher under the Ukraine + COVID-19 scenario than under the COVID-19 scenario. This suggests that the socio-economic impacts of rising price may be more severe under the context of the Ukraine war.
