That the COVID-19 pandemic has significant impacts is becoming increasingly apparent. The immediate effects are the morbidity and mortality suffered by some of those infected by the virus. So are the prevention (campaigns, tests) and treatment costs (hospitals, staff, medication). Further economic impacts originate in the demand-side and supply-side shocks related to the pandemic and policy responses to it, including lockdowns.
This note reflects on the situation in Ethiopia focusing primarily on elements of key responses regarding the agri-food system. The most apparent economic impact takes the form of slowdown in economic activity leading to lower revenues (both private and public) and higher unemployment. Specific examples already happening include: reduction in exports (flower exports curtailed because of closures of major markets in Europe); decline in tourism; contractions in services (transport, restaurants, entertainment) due to closures and fall in other economic activities; lower remittance flows due to less income/higher unemployment facing remitters caused by lockdown/downturn in source countries; and some disruptions in wholesale and retail trade. Unanticipated government expenses are likely to lead to expenditure switching and/or increasing. Also, delays in imports (particularly of food and medicines, input supplies for seasonal agricultural production (seeds, fertilizers) …) may occur with corresponding negative consequences in agricultural production, food security, and health. Read more.
