By Staff Reporter
April 26, 2020 (Ezega.com) -- The economic crisis from the COVID-19 pandemic could push 50 million Ethiopians into poverty unless urgent actions are taken, the Ethiopian Economists Association (EEA) has warned.
In a study conducted on the impact of COVID-19 pandemic, the association said the pandemic will paralyze the nation’s economy causing up to 200 billion birr loss if the pandemic prevails over the next one year.
EEA Poverty and Hunan Development Senior Expert Dr. Degeye Goshu said the pandemic will affect the service sector worst and millions of civil servants will lose their jobs.
Land, capital including machinery, technology, and leadership will be out of service as the government shut down entire economies to manage the spread of the virus.
“Stay home” will not be an option for the majority of the Ethiopians as advised by the government since their subsistence depends on daily income hence the government need to strengthen the food supply chain to avert fatalities from hunger.
The pandemic could set back fight against poverty by at least a decade and could mean that almost half of the Ethiopian population would be living in poverty in the aftermath of the pandemic, Dr. Degeye said
The government should come up with a rescue plan by strengthening the safety net program, helping farmers produce fast-growing crops, mobilizing resources from less active sectors to strengthen the food supply chain.
The study recommends that the National Bank of Ethiopia should decrease obligatory deposits that commercial banks should make in order to enhance their lending capacity and stimulate businesses as well as cut interest rates.
According to the senior expert, the government should boost loan services to importers and ease repayment strategies to overcome possible economic crisis aftermath of the COVID-19 infection.
The Ethiopian government recently said debt cancellation by international lenders would give it access to an additional $630 million –enough to increase their health spending by 45 percent.
According to the expert, currently, the poverty level in Ethiopia stands at 22 percent and if the worst scenario happens due to COVID-19, more than 50 million people would push below the poverty line.
Meanwhile, Ethiopia on Saturday reported five new cases of coronavirus out of the 1, 019 samples taken over the past 24 hours. This brings the total number of confirmed cases in the country to 122.
Four of the five cases are Chinese nationals residing in Sebeta town, Oromia regional state, who had contact with previously confirmed cases, according to a statement issued by the Ministry of Health.
The other one is an Ethiopian living in Addis Ababa, Ethiopia has so far reported three deaths and 29 recoveries from the virus.
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