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5 Questions for Jann Lay: What is Corona doing to the economy?

2020-12-17

Corona is hitting economies around the world - but development in African countries is diverse. Why is that? Apl. Prof. Jann Lay of the GIGA Institute provides answers.

Jann Lay

Jann Lay is head of the research focus "Growth and Development" at the GIGA Leipniz Institute for Global and Regional Studies in Hamburg. As an adjunct professor, he teaches development economics at the University of Göttingen. In his research he examines various aspects of economic development in the Global South with a focus on Africa.

This year, economic growth on the African continent appears to have developed more heterogeneously than in Europe or South America. Why is that?

In general, economic growth in Africa is often more heterogeneous than in the other two regions of the world you mention. This year, there are also obviously the effects of the pandemic, which differ considerably from country to country. The causes for this are varied, but we can group them into three factors: On the one hand, the direct economic effects of the pandemic differ due to differences in the length and intensity of lockdown measures. Almost all African countries took tough measures early on, towards the end of March, which were eased in West Africa in July/August. In southern Africa, the measures were kept in place one to two months longer. Of course, these measures also reflect actual infections.

On the other hand, the indirect effects of the crisis differ significantly. For example, the oil-dependent economies are severely affected as they are suffering a double shock from the lockdown measures and significantly lower oil prices. In contrast, the price of gold is rising, which benefits countries such as Ghana. Strong negative effects of the decline in demand in Europe and the USA can be seen in textile (Ethiopia) and cotton exports (Mali, Burkina Faso, Senegal). Thirdly, ailing economies are particularly vulnerable. South Africa experienced a particularly sharp decline in GDP of 51 percent from the first to the second quarter of 2020. This severe recession is also the result of previously weak economic performance, with record unemployment of 30 percent even before the pandemic. This weakness in South Africa seems to be spreading to its neighbours, such as Botswana and Namibia.

They say that the coronavirus is hitting African national economies particularly hard. Where can we see that?

It is not true that African economies have been hit particularly hard by the pandemic. This only applies to a few countries with specific conditions that make them particularly vulnerable to this crisis, for instance raw material exporters, or South Africa because of their previous poor performance.

How does this effect the general populations?

A great many people have been severely affected by the lockdowns, especially those who work in the informal urban sector. In the absence of government support, many people have had to fall back on their often meagre savings or the support of their families and social – sometimes rural – networks, or simply limit their consumption. The incomes of many entrepreneurs in the informal sector, which accounts for the majority of employment in almost all African nations, have almost completely evaporated. Despite the tough lockdown measures, many African governments gave their citizens and companies much less economic support than governments in other regions of the world. According to admittedly imprecise estimates, the signalled additional, non-health-related government expenditure in most African countries is less than two percent of GDP, compared with more than ten percent of GDP in Germany. Social security coverage remains low in sub-Saharan Africa: such programmes only reach five percent of the population in sub-Saharan Africa through cash or in-kind transfers, compared to a global average of 22 percent. This is true regardless of recent advances in building social safety nets in Africa. Most African countries now have at least one social security programme. Supplementary programmes have been set up in response to the crisis, for example in Nigeria and Togo.

The good news of the crisis in Africa is that some economies have shown themselves to be quite resilient.

How can African economies become resilient?

The good news of the crisis in Africa is that some economies have shown themselves to be quite resilient. This applies to both health crisis management and macroeconomic resilience, supported in part by the International Monetary Fund, the World Bank and other donors. Export diversification and integration into international value chains – which is one way of reducing such risks – can be a double-edged sword: while the clothing industry has been badly hit, for instance in Ethiopia, other value chains, for example in the food industry, have proven to be quite resilient. The crisis has clearly shown the need to build social transfer systems that can mitigate negative income effects on a broad basis. It remains to be seen how increased debt levels will affect some countries in the medium term. Some of these effects have already been mitigated by debt relief initiatives, but what is needed here are instruments that automatically take effect in crises and not just ad hoc and for the poorest countries.

Is the era of strong, steady economic growth over in Africa?

From my point of view, Africa has never seen periods of universal strong, steady economic growth. However, robust economic growth over an extended period of time over the past 15 years has been observed for a significant number of countries, particularly in West and East Africa. I do not necessarily see a deterioration in these countries’ economic outlook, although they will not be able to completely escape the negative effects in the short term. The economic problems of countries in difficulty, from South Africa to Cameroon and Nigeria, have often become intensified. After all, in some economic “success stories” of the past few years, for example Ethiopia and Uganda, the pandemic overlaps with political crises that call into question what has already been achieved, and especially any future progress. As is often the case, a differentiated view of the “economic situation in Africa” is what’s required.

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(c) Christof Krackhardt/Brot für die Welt

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Small-scale farmers’ responses to COVID-19 related restrictions

Study by SLE

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Planetary Health: Recommendations for a Post-Pandemic World

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One Health – What we are learning from the Corona crisis

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From Berlin to Yen Bai: 10,000 trees for Vietnam

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(c) Christoph Püschner/Brot für die Welt

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Not waiting for a savior

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While Africa is the least affected region by Covid-19 so far, the number of confirmed cases and deaths on the continent is quickly rising. Despite the challenges many African countries continue to face, the African response to the coronavirus pandemic displays innovation and ingenuity.

Good health is impossible without healthy food

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Revolutionising Humanitarian Aid

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Interview with Adriano Campolina (FAO)

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Is the international community still on track in the fight against hunger?

Interview with Miriam Wiemers (Welthungerhilfe)

The Global Hunger Index (GHI) 2020 shows that the world is not on track to meet the international goal of “zero hunger by 2030”. If we continue at our current speed, around 37 countries will not even have reached a low hunger level by 2030.

Video: 4 Questions to Claudia Makdristo

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ONE WORLD no hunger - Meet the people driving rural transformation

A program by the partners of the special initiative One World no Hunger

The future is rural. On September 24, meet leaders and visionaries from Africa and South Asia who will enter into dialogue with european key actors.

Join uns here to meet the people.

How much private investment is the agricultural sector able to bear?

By Pedro Morazán

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No dirty dealing

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Shit Business is Serious Business: A successful cooperation between research and the private sector.

The Big Bang is possible

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By Helmut Asche

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“We have to prepare for the unexpected”

Interview with Dr Maria Flachsbarth (BMZ)

In August, Germany’s development ministry set up a division concentrating on One Health topics. Parliamentary State Secretary Maria Flachsbarth on knowledge gaps at the human-animal-environmental interface, the link between One Health and food security, and lessons learnt from previous pandemics.

More than just a seat at the table

By Welthungerhilfe

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Innovations for a secure food supply

By German Agribusiness Alliance

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Africa's face of agriculture is female

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The communicator

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Controversy: Do supply chains need liability rules?

Discussion about the potential supply chain law

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Graphics: Africa's digital disruption

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Rethinking funding

By Anna Sophia Rainer

Peasant farmers tend to fail due to bank credit limits. But investment could help them generate a sustainable income. This has given rise to an intense discussion about potential digital solutions.

The digitised farmyard

By Jan Rübel

Lots of apps are entering the market, but what really makes sense? For African agriculture, some of it seems like a gimmick, some like a real step forward. So this is what a smallholder farm in Africa could look like today - with the help of smartphones, internet and electricity.

Support for sustainable start-ups

Companies in Africa that need financing between $20,000 and $200,000 find relatively few investors, as this sector is too large for microcredit and too small for institutional investors. This creates a "gap in the middle" where companies have limited options. A project of the World Resource Institute provides a remedy with the Landaccelerator 2020.

A World Resources Institute project

FERTILE SOIL THROUGH THE RIGHT COMBINATION OF METHODS

In the Ethiopian highlands, much of the soil is exhausted. New fertilizers and improved seed are making it fertile again.

A Project of GIZ

SUNFLOWERS OVER TOBACCO

The farmers in Malawi have long been holding on to the cultivation of tobacco - which led to a dangerous dependency.

A Project of GIZ

THE BEST IDEAS GROW LOCALLY

Small farmers in Burkina Faso are trying to tackle big challenges locally. Local organizations are helping them.

A project of Misereor

HOW MILK PRODUCTION CHANGED A VILLAGE

Powdered milk exports pose a threat to cattle farmers in Burkina Faso. Pasmep helps shepherds increase their own milk production.

A project of Misereor

STUDY VISITS STRENGTHEN LOCAL FARMERS' ASSOCIATIONS

At Andreas Hermes Akademie, farmers from Africa and India are learning new techniques and organizational forms.

A project of Andreas Hermes Akademie

RESEARCH FOR AGRICULTURAL INNOVATIONS

The Program of Accompanying Research for Agricultural Innovation (PARI) brings together partners working to ensure a secure food supply in Africa and India.

A project of the Center for Development Research

CASH AND VOUCHERS AGAINST HUNGER

Often food is not lacking, but the money for it is. With electronic vouchers hunger is to be controlled in the Horn of Africa.

A procet of the WFP

IRIS SCAN TECHNOLOGY FOR SYRIAN REFUGEES IN JORDAN

Syrian refugees in Jordan don't pay for their food with cash or credit cards, but rather with a quick glance at the camera.

A project of the WFP

INCOME STRENGTHENS PEACE

Congo is daring to rebuild. Improving nutrition and incomes will provide hope for the future, particularly for women and adolescents.

A project of Welthungerhilfe

FROM EXODUS TO MORE SELF-CONFIDENCE

In Afghanistan, thousands of domestic refugees live in poverty. A project brings education and acrobatics into their lives.

A project of Welthungerhilfe

HAY FOR THE DRY SEASON

Climate change makes the nomadic life of the Masai in Kenya more difficult. A new project introduces them to agriculture.

A project of Welthungerhilfe

GREEN BUSINESS IDEAS IN RURAL AREAS

It is above all a lack of opportunities which is driving many young Indians into the cities. An educational; program creates new opportunities in the countryside.

A project of Welthungerhilfe

TOWARDS A SUSTAINABLE COCOA SECTOR

About 60 percent of the cocoa processed in Germany comes from the Ivory Coast. It is grown by 800,000 cocoa farmers, who typically only own up to five hectares of land.

A project in cooperation with the GIZ

THE FOOD ON THE TABLE DETERMINES OUR HEALTH

Cambodians eat too much rice. GIZ is joining with farmers to form multi-purpose farms, as well as advising health care centers on nutritional questions.

A project of GIZ

FROM RANCHERS TO MANUFACTURERS

How to: In Benin, farmers are opening factories now that they have learned what an entrepreneur needs to know.

A project of GIZ

DEVELOPMENT THROUGH SWEET POTATOES

For Kenyan small farmers, the harvest yields little more than they need for themselves. How the orange sweet potato can change the life of an entire region.

A Project of GIZ

SECURING THE FOOD SUPPLY IN MALAWI

Securing the food supply requires a holistic approach. That's why mango and papaya will be on the menu in Malawi.

A Project of GIZ

HEALTHY FOOD FOR ALL

Brazil is world champion in the use of pesticides. In the southern part of the country, a network of organic farms is supplying municipal schools and kindergartens with healthy food.

A project of Brot für die Welt

BETTER VOCATIONAL TRAINING FOR FARMERS

At vocational schools in Ethiopia, farmers learn to use their land sustainably. The curricula are tailored to climate change and droughts.

A project of IAK Agrar Consulting

MARKET FORCES, NOT DONATIONS

For more than ten years, Cotton made in Africa has been setting standards for the protection of the environment and better living conditions in the cotton industry of sub-Saharan Africa.

A project of Cotton made in Africa

STRONG TUBERS: SUPPORTING POTATOE FARMERS

Potatoes are staple foods in Kenza. Raising their profit is an important contribution to prevent malnutrition.

A Projct of GIZ

Local rather than global

An increasing number of people in Togo's capital city are consuming cheap imported food. The OADEL organization promotes local products.

A project of Brot für die Welt

HERE IS MY HOME

Where in the Ethiopian Tigray just a few years ago only parched soil and sand could be seen, grass is growing again. Previously, the inhabitants fled from famines. Today farmers use the valley for the cultivation of grain or vegetables - and have new prospects.

A project of World Vision

IMPROVED LAND GOVERNANCE

Weak land governance and insecure land rights are still major development challenges for Africa. The global program to strengthen land governance in Africa aims to strengthen marginalized groups.

A project of GIZ

SUSTAINABLE STRUCTURAL CHANGE

Researchers from the Humboldt University of Berlin are developing solutions for more socially inclusive and sustainable structure of structural change in sub-Saharan Africa.

A project of the Center for Rural Development

MAINTAINING SOIL FERTILITY

Many farmers suffer from droughts. A climate program to combat desertification helps Indian small farmers preserve soil fertility.

A project of KfW

A STRONG NETWORK

Malawi has just survived the most severe food crisis in 35 years. An initiative helped with money for food aid - the goal: to strengthen self-sufficiency.

A project of Save the Children

“They said: You can do it”

By Bread for the World

As President of the IABM cooperative in Muhanga, Alphonsine Mukankusi is not simply focused on the figures. She has learned how to deal with people and how to take on responsibility. At the same time, her work helps her to come to terms with the past

Read more “They said: You can do it”

Borderless food security

By Christine Wieck

Enabling smallholders to trade across regions and borders promotes food security and economic growth. Although everyone is calling for exactly that, implementation is still difficult

Land is Crucial for Development

By Roselyn Korleh and M. Sahr Nouwah

The Liberian town of Kinjor is a picture-book example for what happens, if land rights aren’t protected, and it illustrates how to move forward from there. The keyword: Multi-Actor Partnership

The 'Grey Gold'

By Maria Schmidt

The Cashew Council is the first international organisation for a raw material stemming from Africa. The industry promises to make progress in processing and refining cashew nuts - and answers to climate change

Human Rights, Land and Rural Development

By Michael Windfuhr

Land rights are no longer governed by the law of the strongest. That is what the international community has agreed to. Governments and private companies have a duty to respect human rights and avoid corruption.

Ebay Against Hunger

Small holders around the world are often forced to sell their harvests below market value due to a lack of market and pricing information. A new app by the UN World Food Programme (WFP) is going to change this.

A project of WFP

Resilience in times of crisis

Yemen is currently experiencing one of the worst disasters, due to war, hunger and disease outbreaks. The GIZ is locally engaged to improve the nutrition and resilience of Yemenites.

A project of GIZ

COST-BENEFIT ANALYSES FOR MORE SOIL CONSERVATION

With the help of sustainable farming methods, soils can be preserved and made fertile again. The investment required is also worthwhile from a financial perspective.

A project of GIZ

Youth employment in rural area

Offering young people in rural areas better employment prospects is one of the objectives of the sector project. The young population is the key to a modern and efficient agricultural economy.

A project of GIZ

XtraPay - thanks to farmers

XtraPay wants to make international supply chains more transparent and establish a direct connection between producer and consumer. The bonus payment system was successfully piloted on 16 August in ten Edeka supermarkets in Braunschweig.

A project of BMZ

High on soya

The spread of monocultures is globally harmful to the environment and violates human rights; it makes for more losers than winners. But there are ways out, here one example: Smallholders in Parguay are fighting back.

A Misereor project

Freed from trade? Towards a fairer EU Trade Agenda

By Dr. Jan Orbie

‘Fair’ and ‘sustainable’ are key words in Germany’s EU Council Presidency. At the same time, Germany pursues ‘modernization’ of the WTO and ‘rapid progress’ on free trade agreements. Are these goals really compatible? Can we be concerned about fairness and sustainability while continuing with ‘business as usual’?

Reference values: A building block on the road to social equality

Article by Friederieke Martin (GIZ)

A quick and cost-effective method calculates living wages and incomes for many different countries. The GIZ together with Fairtrade International and Richard and Martha Anker have developed a tool that companies can use to easily analyse income and wage gaps.

Supermarket Scorecard on Human Rights

By Dr. Franziska Humbert (Oxfam)

Oxfam’s supermarket scorecard, which is in its third year, shows one thing in particular - it works! Supermarkets can change their business policies and focus more on the rights of those people around the world who plant and harvest food. However, this does not happen without pressure.

Ideas on the ground: Local solutions for global challenges

Interview with Sebastian Lesch (BMZ)

A world without hunger and with sufficient healthy food as well as climate-friendly agriculture can only be achieved if ideas are transformed into innovations and ultimately also applied - a conversation with BMZ Head of Division Sebastian Lesch on the Innovation Challenge programme of the new Agricultural Innovation Fund.

“Healthy ground brings good and many fruits”

Interview with Ben Sekamatte and Boaz Ogola

Africa's cotton production plays a key role in the fight against poverty. The "Cotton Made in Africa" initiative promotes sustainable cultivation - one element of which is the use of organic pesticides. Entomologist Ben Sekamatte and cotton company manager Boaz Ogola talked with Jan Rübel about soil and yields.

"The virus does not need visa"

Interview by Dr. Ahmed Ouma (CDC)

Countries across Africa coordinate their efforts in the fight against corona by the Centre for Disease Control (CDC) of the African Union in Addis Abeba. Until now, the curve of new infections has been successfully flattened – why? Dr. Ahmed Ouma, Deputy Director, explains the work of CDC in an interview with Tilman Wörtz.

Ms Rudloff, what are the benefits of a supply chain law?

By Jan Rübel

The Federal Government is fine-tuning a law that would require companies to ensure human rights – a supply chain law. What are the consequences for the agricultural sector? Dr Bettina Rudloff from the German Institute for International and Security Affairs (SWP) discusses linking policy fields with added value.

Africa's rapid economic transformation

By T. S. Jayne, A. Adelaja and R. Mkandawire

Thirty years ago, Africa was synonymous with war, famine and poverty. That narrative is clearly outdated. African living standards are rising remarkably fast. Our authors are convinced that improving education and entrepreneurship will ensure irreversible progress in the region even as it confronts COVID-19.

"We are not Uber for tractors"

Interview with Jehiel Oliver

Jehiel Oliver was a successful consultant. One day, he quit his job in investment banking to become a social entrepreneur. His mission: tractors for Africa. Rental tractors. What gave him that idea? Find out in his interview with Jan Rübel.

Story: In Blocked Chains We Trust

By Solomon King Benge

It is 2080. We are on a farm somewhere in Africa. Everything is digital. The blockchain is an omnipotent point of reference, and the farm is flourishing. But then, everything goes wrong. A dystopian short story, written exclusively for SEWOH.

Can this end world hunger?

By Stig Tanzmann

Time to dig deeper: We can only benefit from technical progress if we have a solid legal framework for everybody. But so far, none is in sight - in many countries. Instead, international corporations grow ever more powerful.

What it takes now

By Heike Baumüller

Artificial intelligence, big data and blockchain are the hottest topics of our time. The digital transformation of the African agricultural sector is ready for take-off. What will it take for the future of technology to hit the ground running?

From start to finish: a vision of interconnectivity

By Tanja Reith

At the moment, the agricultural industries of African countries exist in relative isolation. Imagine peasant farmers digitally connected to the value chains of the global food industry. How could this happen? A guidebook.

Answers from the youth: "Leave or stay? That depends on it!"

GIZ study; conducted by Geopoll

Does Africa's youth want to live in the city or in the country? Which career path seems particularly attractive? And how optimistic are the young people about the future? Young adults from rural areas answered these questions by SMS.

"Agriculture can become a job engine"

Interview with Reiner Klingholz

How can agriculture modernise Africa? And does the road to the cities really lead out of poverty? Dr. Reiner Klingholz from the Berlin Institute for Population and Development in conversation with Jan Rübel .

The Life of Their Dreams - What Children Want

By Dreyer Foundation

Later on you want to become a farmer yourself, or would you prefer to take up another profession? Two young people from Burkina-Faso talked to representatives of the Dreyer Foundation about their parents' farms, the profession of farmer and their own plans for the future.

An opportunity for the continent

By the Bill & Melinda Gates Foundation

Africa’s population is young and ready to take its destiny into its own hands. Agriculture offers amazing opportunities in this regard. The Bill & Melinda Gates Foundation wants to support the next generation in this way.

It all comes down to the young population

By Jan Rübel

What happens when young people leave the rural areas? How can the region achieve what is referred to as the demographic bonus – and how can it reap the benefits of the demographic dividend? A look at demography shows the following: What is most important is promoting women’s rights and education.

"Without peace, there will be no development"

Interview with Karina Mroß

What contribution does development cooperation make to conflict prevention? What can it do for sustainable peace? Political scientist Karina Mroß talks to Raphael Thelen about post-conflict societies and their chances for peaceful development.

A classroom in the Garden of Eden

By Iris Manner

Deforestation harms people and the environment. With nurseries, farmers can earn money and do good. You just have to know how to do it

Bitter fruit

By Frank Brunner

Why aren’t bars of chocolate made where cocoa is grown? Author Frank Brunner analyses the industry’s fragile value chain from the plantation to the supermarket

The price isn’t everything

By Bettina Rühl

In Togo’s capital, Lomé, home-grown rice costs almost twice as much as the imported product from Thailand. Yet there are good reasons for preferring the local product

Enough of being poor

By Marcellin Boguy

In western Africa a new middle class is emerging. Their consumer behaviour is determining the demand for products – home-produced and imported goods, on the internet or at the village market. The people of Ivory Coast in particular are looking to the future with optimism.

Slaves do not produce quality

By Tilman Wörtz

Every child in Germany knows Ritter Sport – but most of the children harvesting cocoa on western African plantations have never even eaten chocolate. Can a chocolate manufacturer change the world? Conversation with Alfred Ritter about the power and powerlessness of a businessman.

Small Farms, big money

By Agnes Kalibata

Africas economy can only grow sustainably, if also small-scale agriculture is seen as opportunity.

Doing More With Less

By Jochen Moninger

Innovation is the only way to end hunger worldwide by the deadline we have set ourselves. The secret lies in networking and sharing ideas – and several initiatives are already leading by example.

New campaign for women: "Poverty is sexist"

Interview with Stephan Exo-Kreischer

This is a benchmark for everybody: More rights for women are a very influencing solution in the struggle against extreme poverty and hunger worldwide, says Stephan Exo-Kreischer, Director of ONE Germany. The organisation specialises in political campaigning as a lever for sustainable change.

No rainforest for our consumption

By Jenny Walther-Thoß

In the tropics rainforests are still being felled for the production of palm oil, meat and furniture. It is high time to act. Proposals are on the table.

The farmes themselves are the benchmark

By Andreas Quiring

Strong farmes are the key to a self-determined, sustainable development. Social innovations can help make the farmers’ actual needs the benchmark.

A fresh opportunity

Interview with Lutz Hartmann

By leasing a three hundred hectare fruit plantation in Ethiopia, Lutz Hartmann has realised a long-cherished dream: to run his own business in Africa. Now he has a personal interest in the issue of Africa’s development.

Mr. Samimi, what is environmental change doing to Africa?

Interview with Cyrus Samimi (IAS)

Environmental change is having a particularly strong impact on the African continent. Its landscapes see both negative and positive processes. What is science's view of this? A conversation with Cyrus Samimi about mobility for livelihoods, urban gardening and dealing with nature.

A new U.S. Africa policy?

By Jan Rübel

After four years of Donald Trump in the White House, it is time to take stock: What policies did the Republican government pursue in African regions? And what will change in favor of Joe Biden after the election decision? Here is an evaluation.

How Smallholders Became Commodity Suppliers

Small farmers are often left behind in African agriculture. Access to markets and improved competitiveness can only be achieved if the small farms join forces. But those affected in partner countries are often at a loss as to how to implement cooperative models. Here, the BMZ provides support through the SEWOH ONE World – NO Hunger initiative and the Social Structure Promotion (Sozialstrukturförderung).

A project by Deutscher Genossenschafts- und Raiffeisenverband e. V.

Can we win the race against deforestation?

Interview with Bernadette Arakwiye und Salima Mahamoudou

Deforestation is leading to a shortage of water and food. What are the options for counteracting? A conversation with Bernadette Arakwiye and Salima Mahamoudou from the World Resources Institute (WRI) about deforestation, renaturation and the possibilities of artificial intelligence.

"Soy can be made into more than just flour"

A report by Johanna Steinkühler (GIZ)

The soybean is a natural crop that can be used to make a lot of food. So, Tata Bi started a small processing business first on her own, then with a few other women, which provides the women with an additional source of income year-round besides selling the soybeans.

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5 Questions for Jann Lay: What is Corona doing to the economy?

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