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COVID -19’s impact on the livelihoods of informal traders in Zimbabwe

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The measures of halting the COVID-19 epidemic have landed a heavy blow on the informal sector of Zimbabwe. The COVID -19 pandemic has posed live threats and also a severe economic shock. The Worldometer reported that, to date, 216 countries have been affected by the COVID-19. Of note, there are approximately 7,872,620 confirmed cases, and death neared 432,475 globally. The informal markets around the globe have not been spared and specifically Africa. Noteworthy, the International Monetary Fund (2018) argued that Africa possesses the most significant informal economy. Likewise, the majority of Zimbabweans livelihoods depend on the informal sector.  The negative economic impact rises simultaneously as the countries scramble to curtail the deadly disease. Against this backdrop, the mitigation measures imposed by some countries have, however, left some communities and families in a difficult situation. Zimbabwe is one of the countries that embarked on robust measures to curtain the disease. For instance, it issued a decree that people must stay at home; however, no meaningful policies, tax relief, or financial bailout were put in place to protect the marginalized and informal traders’ livelihoods. However, the majority of households in Zimbabwe are impoverished and survive on hand to mouth.Zimbabwe failed to provide stimulus packages to cushion the informal businesses and informal traders’ livelihoods.

The meltdown of the Zimbabwean economy and the rise of the informal sector

Zimbabwe’s economic meltdown and political turmoil emerged around 2000. The rampant and violent land reform program crippled the agriculture sector, which was once the backbone of the economy. Additionally, the imposition of sanctions by the US and the EU in 2003 and 2004 further strained the already fragile economy. The Southern African country continues to face poor governance, corruption, low level of investment, high level of unemployment, drought, shortages of essential commodities, an unjustified increase of primary products, and other challenges. As such, it became a fertile ground for the booming of the informal sector and shrinking of the formal area. The manufacturing, textile, and clothing industries collapsed. Recently, almost 90% of Zimbabweans worked in the informal sector, such as trading and self-employment.

Further, some Zimbabweans who are formally employed are indirectly involved in informal part-time jobs to supplement the low salaries. For instance, some are cross border traders. The majority of the Zimbabweans are living below the poverty datum line and require urgent food assistance. Zimbabwe is also experiencing large scale electricity outages. On top of all these challenges, Zimbabwe, like all other countries, is faced with the COVID -19 epidemic. Amidst of these crises, the government placed mitigation measures like lockdown. At the time of this writing, the formal markets were not allowed to operate except those that sell foodstuffs. Zimbabwe was on level 2 of lockdown, but schools, universities, the movement of people, and  large gatherings, was still restricted.

Impact of COVID -19 control measures on the livelihood of the informal traders

Bouey (2020) reveals that informal businesses are the engine of the economy in most countries. Like any pandemic, the lowest-paid workers and informal traders are likely to be more affected economically. The informal traders are affected because they are neither able to work remotely or possess savings to cater to an economic downturn. Most African governments usually shut down informal markets by force during global pandemics. For instance, the Zambia government employed military force to shut down informal markets amid the 2018 cholera outbreak. Farmers and informal traders lost their fresh produce, and their livelihoods were crippled. The bulk of the informal traders lacked proper shelter, food among other necessities. During the Ebola outbreak 2014-15 in Liberia and Sierra Leone, most households required economic support as the government shut down the informal markets. The World Food Program Analysis reported that restrictions and market closure in Central and West Africa negatively affected 80% of smallholder farmers and informal traders. In the same vein, the Al Jazeera (2020) noted that containment measures ushered economic hardship to casual workers in Kenya, yet they constitute 83.6% of the whole workforce.

Most informal workplaces are still closed as the government has set up some minimum requirements for a workplace to open. Most of the informal traders cannot afford requirements set by Zimbabwean authorities. Over-congested informal markets such as Mbare Siyaso, Mupedzanhamo Market, 4th Street, Glenview Area 8 Furniture Complex, and Gazaland lack supporting structures, water, and sanitation. These areas are threats of spreading the COVID -19 pandemic. The measures imposed by authorities are almost impossible as the government fails to provide the supporting structures to their citizens such as stable water supplies. Resultantly, after two months of no income, most informal traders are mired in absolute poverty. While this might be the case, the poor are further marginalized. Most vulnerable families are further exposed to poverty, reduced access to health care, and missed meals for children. Evans (2020) denoted that the economic impacts of COVID-19 have a drastic effect on the well-being of communities and families.

Informal traders face dual contests both on supply and demand sides. Some informal traders have no option except to stay home with their children as schools and movements is restricted. Moreover, the supply chain is profoundly affected, resulting in a lack of parts of intermediate goods. There was a sudden loss of revenue and demand for informal traders and SMEs. Their ability to function was hindered, contributing to liquidity shortages. Fear and uncertainty were caused by lost income as consumers were laid off by their employers who were no longer able to pay them.  The direct impact of the shutdown is the decreased level of the output of most economies. The consumer’s expenditure dropped, the decline in GDP, reduced demand for goods and services. According to the international labor organization, COVID-19 could contribute to increased unemployment by up to 24.7 million. Most informal traders are struggling to pay rentals, electricity, and water. Worse, the authorities destroyed some illegal structures of the informal traders as a measure of containing COVID-19 without first considering the consequences as far as the livelihoods of informal traders are concerned. The probability of resuming business by many informal traders is very slim.

The impact of COVID-19 is severe to informal sector of Zimbabwe attributed to lower resilient levels. It shall be a struggle for informal traders to rebuild connections with their former networks as the supply chain has disrupted. Most informal traders, due to their size and financial capacity, lack adequate knowledge to lighten the shocks, lack flexibility resilience of withholding shocks. Most require the latest adopting strategies and technology as well as digitization, lack personal protective equipment (PPEs), such as hand sanitizers and masks, because of their irregular and insecure incomes.

On a positive note, fresh markets have been allowed to operate, including Mbare Fresh Market, Sakubva Fresh Market, among others. The informal traders’ organizations also embarked on a massive program to mobilize resources. As such, some informal traders received materials such as sanitizers and masks throughout the country. However, some informal traders did not benefit from this program. Moreover, the demand for fresh produce has dropped because of reduced travel and decreased human traffic. Resultantly, income could be low, and women might be affected more since they make up a significant percentage of the informal traders. Some informal traders have resorted to operating from their home, raising hygienic concerns, which might contribute to the outbreak of the COVID -19 epidemic. Currently, some informal traders have flooded the streets of Harare after two months of no income since the announcement of a decree that ordered all people to stay home.

 The government of Zimbabwe should develop long-term solutions for a future pandemic to minimize the adverse effects on informal traders’ livelihoods.  A careful tailor-made strategy to accommodate all Zimbabweans should substitute a one–size– fit all approach.

The government challenged to be proactive in the mitigation of the adverse impact on the informal sector. A stimulus package is required to cushion the informal economy. Prioritization and efficiency of expenditures are urgently needed. Authorities must come up with a way of assisting the affected informal traders in a fair and non-politicized manner. The Zimbabwe government should draw lessons from other countries and strengthen its safety nets, such as subsidized health and cash transfers. Namibia has come up with social safety net policies to cushion the informal sector. For example, it has come up with an emergency income grant for all workers who lost jobs. On the same stem, South Africa and Rwanda have taken bold steps to protect their economies, such as some packages for the poor. Kenyan officials have also accepted a pay cut. The government should prioritize the provision of essential goods and services such as mealie meal sanitation and water to all residential areas. Long queues undermine the curtail measures and might contribute to the time bomb of the COVID-19.

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Africa

SADC Summit Ends With Promises of More Meetings

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The Southern African Development Community (SADC) held an Extraordinary Double Troika meeting on 8th April in Maputo to deliberate on measures on addressing terrorism and its related impact on the current development specifically in the Mozambique and generally in southern Africa. The Cabo Delgado crisis started in 2017 with insurgents taking control of parts of northern Mozambique.

One of the two troikas consists of the current, incoming and outgoing chairs of SADC (namely Mozambique, Malawi and Tanzania), while the second is formed by the current, incoming and outgoing chairs of the SADC organ for politics, defence and security cooperation (Botswana, South Africa and Zimbabwe).

South African president Cyril Ramaphosa and the ministers of international relations, defence and state security attended the meeting. It was also attended by Mozambique, Botswana, Malawi Zimbabwe and Tanzania.

The summit was called in the wake of the terrorist attack of 24 March against the town of Palma in the northern Mozambican province of Cabo Delgado, but the leaders did not pledge any immediate practical support for Mozambique.

SADC Troika heads however said the acts of terrorism perpetrated against innocent civilians in Cabo Delgado, Mozambique, could not be allowed to continue without a proportionate regional response and reported that 12 decapitated bodies have been found behind a hotel in the region.

Mozambican President Filipe Nyusi has called for cooperation in cross-border surveillance as essential to stem the flow of foreign fighters fomenting terrorism in Cabo Delgado, warning of the spread of violence throughout Southern Africa.

Among the measures that the SADC countries should implement to combat terrorism is strengthening border control between Southern African countries, he said, and further added that Southern African police and judicial systems must consistently work to combat trafficking and money laundering that funds terrorism.

Nyusi stressed that the organization should implement practical acts to combat this scourge of terrorism to prevent its expansion and destabilization of the region, and warned of the risk that the actions of armed groups with a jihadist connotation could hinder regional integration.

According official reports, SADC fends off United States / European Union anti-terror intervention in Cabo Delgado. It further said no to another Mali / Somalia / Libya / Syria disaster on the African continent, adding that the global Anti-Terror lobbies are frustrated.

Deeply concerned about the continued terrorist attacks in Cabo Delgado, especially for the lives and welfare of the residents who continue to suffer from the atrocious, brutal and indiscriminate assaults, the leaders decided at their meeting to deploy a technical mission to Mozambique. It’s not clear what action the region will take but the deployed technical mission will report back to heads of state by 29 April.

The final communiqué from the summit condemned the terrorist attacks “in the strongest terms” and declared that “such heinous attacks cannot be allowed to continue without a proportionate regional response” but it did not suggest what such a regional response might consist of.

The Summit expressed “SADC’s full solidarity with the government and people of Mozambique” and reaffirmed “SADC’s continued commitment to contribute towards the efforts to bring about lasting peace and security, as well as reconciliation and development in the Republic of Mozambique.”

The summit ordered “an immediate technical deployment” to Mozambique, and the convening of an Extraordinary Meeting of the Ministerial Committee of the Organ by 28 April 2021 that will report to the Extraordinary Organ Troika summit on 29 April 2021.

The extremely brief communiqué mentioned no other specific measures.

The violence unleashed more than three years ago in Cabo Delgado province took a new escalation about a fortnight ago when armed groups attacked the town of Palma, which is about six kilometres from the multi-million dollar natural gas, according to United Nations data.

The attacks caused dozens of deaths and forced thousands of Palma residents to flee, worsening a humanitarian crisis that has affected some 700,000 people in the province since the conflicts data. Several countries have offered Maputo military support on the ground to combat these insurgents, but so far there has been no openness, although reports and testimonies are pointing to security companies and mercenaries in the area.

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African agriculture is ready for a digital revolution

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Authors: Akinwumi Adesina and Patrick Verkooijen*

After a dark 2020, a new year has brought new hope. In Africa, where up to 40 million more people were driven into extreme poverty and the continent experienced its first recession in 25 years, a brighter future beckons as the economy is forecast to return to growth this year.

Africa now has an opportunity to reset its economic compass. To build back not just better, but greener. Particularly as the next crisis—climate change—is already upon us.

Africa’s food systems must be made more resilient to future shocks such as floods, droughts, and disease. Urgent and sustainable increases in food production are needed to reduce reliance on food imports and reduce poverty, and this is where digital services come into play.

With mobile phone ownership in Sub-Saharan Africa alone expected to reach half a billion this year, digital services offered via text messaging can reach even the most remote village. And at least one-fifth of these phones also have smart features, meaning they can connect to the internet.

We can already see how digital services drive prosperity locally and nationally. In Uganda, SMS services that promote market price awareness have lifted the price farmers receive for bananas by 36 percent, beans by 16.5 percent, maize by 17 percent, and coffee by 19 percent. In Ghana, services that cut out the middleman have lifted the price for maize by 10 percent and groundnuts by 7 percent.

But digital services don’t just raise farmgate prices, they are the gateway to farm loans, crop insurance, and greater economic security, which in turn enables farmers to increase their resilience to climate change—by experimenting with new, drought-resistant crops, for example, or innovative farming methods.

Text messages with weather reports help farmers make better decisions about when and what to plant, and when to harvest.

In Niger, a phone-based education program has improved crop diversity, with more farmers likely to grow the cash crop okra, while an advisory service in Ethiopia helped increase wheat production from one ton to three tons per hectare.

The data footprints phone users create can also be analyzed to help assess risk when it comes to offering loans, making credit cheaper and more accessible.

Phones and digital services also speed up the spread of information through social networks, helping farmers learn about new drought-resistant crops or services that can increase productivity. Free-to-use mobile phone-based app WeFarm, for example, has already helped more than 2.4 million farmers find certified suppliers of quality seeds at fair prices. They can also connect farmers to internet-based services.

Examples of digital innovation abound, sometimes across borders. In Ghana, Kenya, and Nigeria, equipment-sharing platform Hello Tractor is helping farmers rent machinery by the day or even hour, while in Ethiopia, AfriScout, run by the non-government organization Project Concern International with the World Food Programme and the Ministry for Agriculture, provides satellite images of water supplies and crops every 10 days so problems can be spotted quickly to aid remedial action.

Transforming food systems digitally has demonstrably excellent results: the African Development Bank, which has allocated over half of its climate financing to adaptation since 2019, has already helped 19 million farmers in 27 countries to lift yields by an average 60 percent through applying digital technology, for example.

This is why the Global Center on Adaptation and the African Development Bank have launched the Africa Adaptation Acceleration Program (AAAP) to mobilize $25 billion to scale up and accelerate innovative climate-change adaptation across Africa.

Once developed, the digital nature of these services often makes such projects easy to replicate elsewhere and scale, even across large rural areas with little existing infrastructure.

Further, adaptation projects are proven to be highly cost-effective, often delivering value many times the original investment and so helping African economies grow faster and create many more much-needed jobs.

This makes it imperative that the global resolve to rebuild economies in the wake of Covid-19 is harnessed in the most effective way. We must not simply replicate the mistakes of the past. We must build back stronger, with a more resilient and climate-smart focus.

Funding and promoting disruptive business models in which digital technologies are embedded to increase productivity without using more land or more water will create a triple win: increased production, a more resilient climate and more empowered farmers.

We have the means and the technical capability to put Africa well on the way to achieving food self-sufficiency and greater climate resilience. In doing so, we can help millions move out of food poverty. We must not squander this opportunity to create truly historic and lasting change.

AfDB

*Patrick Verkooijen is CEO of the Global Center on Adaptation.

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Towards the Second Russia-Africa Summit

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Following the instruction of Russian President on the preparation of the second Russia-Africa Summit in 2022, a working meeting between Adviser to the President of the Russian Federation and the Association of Economic Cooperation with African States (AECAS), the Secretariat of the Russia-Africa Partnership Forum and the Roscongress Foundation was held in Moscow.

Among the participants of the meeting were Adviser to the President of the Russian Federation Anton Kobyakov, Ambassador-at-Large of the Ministry of Foreign Affairs and Head of the Secretariat of the Russia-Africa Partnership Forum Oleg Ozerov, Chairman of the Board, Chief Executive Officer of the Roscongress Foundation, Head of the Coordination Council for Russia-Africa Partnership Forum Alexander Stuglev and Head of AECAS Alexander Saltanov.

They discussed the prospects for further development of relationships with African countries in accordance with the decisions of the first Russia-Africa Summit that was held in Sochi in October 2019, as well as the key aspects of preparation for the next top-level Russian-African meeting in 2022, including the need to establish efficient information cooperation with African countries.

Adviser to the President was presented with the interim results of the work done by the Secretariat that was created in 2020 for coordination and preparation of events within the Russia-Africa format, as well as advances made by AECAS, the establishment of which is an important achievement on the way to efficient and fruitful preparation for subsequent events of the Russian-African track.

The day before Russian President Vladimir Putin informed the participants of the International Inter-Party Conference Russia-Africa: Reviving Traditions about the preparation for the second Russia-Africa Summit in a telegram and noted that the first Summit «gave a strong momentum to the development of friendly relationships between our country and countries of the African continent.»

Russian Minister of Foreign Affairs Sergey Lavrov, who took part in the Inter-Party Conference, said that the Summit is already being prepared and filled with meaningful content, and roadmaps of Russian-African economic, scientific and humanitarian cooperation are to be drafted in the near future. Minister also noted that African issues are supposed to be included in the programme of the upcoming St. Petersburg International Economic Forum. These topics will be further discussed at the next meeting of foreign ministers of Russia and the African Union trio that is scheduled for 2021.

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