Financial access in Africa has been on the rise in the last decade. It has a critical role to play in increasing the resilience of households and supporting their livelihoods. Maintaining this role is vital to tackle welfare and income losses stemming from the Covid-19-sparked economic crisis.
The financial impact of the pandemic is threatening to reverse gains made in per capita income. This could lead to negative coping mechanisms with damaging effects on both short- and long-term poverty.
- In most countries in Africa, more than half of all households are reporting reduced incomes, with low-income households suffering the worst.
- Negative coping mechanisms for low-income households include reducing food consumption, an inability to buy medicine and children no longer attending school.
- Remittances – usually an important source of support for consumption and informal businesses for low-income households – have fallen by 20% and the World Bank project they will fall further.
Read the full paper here.
This blog first appeared on the ODI site.
Author: Judith Tyson, ODI.
Image courtesy of guido.menato via Flickr.
The views are those of the author and not necessarily those of ETTG.