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World Bank Predicts Zim Economic Recovery Despite COVID-19

 

The number of extremely poor citizens rose to 7.9 million in 2020 due to the COVID-19 (coronavirus) pandemic and its impacts, according to the World Bank’s latest economic analysis for the country.

The Zimbabwe Economic Update, Overcoming Economic Challenges, Natural Disasters, and the Pandemic: Social and Economic Impacts, cites surveys conducted in 2020 which show nearly 500,000 Zimbabwean households have at least one member who lost her or his job, causing many households to fall into poverty, and worsening the plight of the existing poor.

Food insecurity was also exacerbated by inadequate reach/coverage of relevant social protection programs—less than a quarter of the increased number of extremely poor households received food aid in June 2020, and this share dropped to 3% of rural households in September 2020.

The pandemic also put pressure on strained public resources, the report notes,  exacerbating implementation challenges, severely affecting service delivery in health, education, and social protection. For example, as schools across the country closed in response to the lockdown measures, access to remote learning was limited in rural areas, especially for poor households.

Only 9% of school-going children in rural areas were reported as having used mobile applications for learning during pandemic-related school closures, compared with 40% for urban children.

In addition, the report says supply-side challenges facing the health system—following a prolonged period of doctor strikes, reduced working hours for nurses, and limited and slow access to personal protective equipment—initially contributed to a decline in the coverage and quality of essential health services.

The number of institutional maternal deaths increased by 29% in 2020 compared to 2018, while deliveries at home increased by 30%.

Household loss of access to basic social services and deepening of negative coping strategies risk undermining Zimbabwe’s relatively high human capital and the pace and inclusivity of economic growth, according to the report. 

The economic challenges and extraordinary shocks caused by the pandemic, and the drought and cyclone in 2019provide opportunities to press forward with bold measures to protect lives and livelihoods, and support Zimbabwe’s longer-term recovery, according to the analysis.

“Preserving lives during this unprecedented pandemic in this challenging economic environment will require a strategic approach to addressing underlying problems in the health sector,” said Stella Ilieva, World Bank Senior Economist and lead author of the economic update.

“Such a strategy needs to recognize and simultaneously attend to the COVID-19 and non-COVID-19 health burden in coordinating and allocating sector resources.”

As concerns regarding a possible third wave are mooted, the report notes ongoing efforts to ramp up capacity. In the short term, priority interventions include i) ensuring adequate access to the 2021 budget allocation for the COVID-19 response as well as restoring access to essential health services; and ii) improving the procurement, distribution, and management of pharmaceutical commodities and equipment in hospitals and clinics.

Ensuring the sustainability of health financing in the medium-term will require the identification of sustainable ways to address the remuneration and retention of health workers; as well as strengthening accountability frameworks and investing in appropriate monitoring and information management systems.

Protecting livelihoods will require strengthening social protection and food security while also ensuring better education outcomes, according to the report, as insufficient financial resources and implementation capacity constrain the government’s ability to reach the growing number of people in extreme poverty.

Though humanitarian food aid programs can help households address short-term food insecurity, the report notes Zimbabwe is working towards longer-term solutions, such as climate-proofing agriculture, better managing grain reserves, and increasing rural communities’ linkages to markets.

To forestall a looming learning crisis, the government has taken steps to expand opportunities for distance learning, which the report recommends be scaled up, along with measures to provide additional financing for schools in poor areas, increased coverage of social assistance for school fees, and adequate school feeding programs.

Additional report observations and recommendations include:

  • Domestic policies which support price stability and the optimal use of public resources are key, especially given large financing needs to prevent a deterioration in human capital.
  • Reallocate spending from inefficient, distortive subsidies to targeted measures that limit the toll of the pandemic, provide social safety nets and food security and prevent a learning crisis that risks undercutting long-term growth and productivity.
  • Adopted policies should take into account the country’s limited fiscal space and the significant financing required to arrest further deterioration of social service delivery.
  • As it is currently facing tight public finances and limited recourse to external financing, Zimbabwe will need to rely heavily on reallocating domestic resources to optimal public uses, mobilize humanitarian support to prevent increasing fragility, and leverage private financing where possible to stimulate growth.
  • Significant financing will be required to restore service delivery to the levels of the recent past as the gap has widened sharply over the past two years. In this regard, new approaches to working with the private sector and development partners are needed to leverage financing and skills. Such approaches, coupled with a more responsive and accountable public sector, would enable a more rapid improvement in service delivery.
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