COVID-19 Expected to Affect Close to 1.4 Mln. Workers in Ethiopia

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Addis ababa, May 8/2020(ENA) Close to 1.4 million workers will be affected by the pandemic, particularly in the service and manufacturing sectors, according to the Ethiopia’s Jobs Creation Commission estimation. 

In an interview with IMF Country Focus, Vice Governor and Chief Economist of the National Bank of Ethiopia, Fikadu Digafe Huriso said some industrial parks have already laid off workers due to a slump in global demand.

The most direct economic impact, so far, has been on the service sector, particularly transport, travel, and hospitality services, he stated.

Fikadu noted that “it has severely affected passenger transport both air and land, which, in turn, has shaken the hospitality industry resulting in closures of many big hotels.”

Fikadu noted “as more and more people continue to become infected, we expect the impact on health resources and on the fiscal sector to grow.”

The Government of Ethiopia is taking several measures including fiscal, monetary, and sectoral measures to flatten the curve and recover the impact, he pointed out.

Some 5 billion birr preliminary stimulus package, removal of import taxes on COVID-19 related items, and faster value added tax refund are among the fiscal measures while 21 billion birr liquidity for working capital is the monetary, it was indicated.

Speaking of the recently attained 411 million USD emergency funding, the Vice Governor said the emergency funds will support two broad areas.

“First, it will support the import of much-needed essential health supplies such as personal protective equipment (sanitizers, gloves, masks) and intensive care equipment like ventilators,” he elaborated.

Fikadu added that “the funding will also support communication on health issues as combating COVID-19 will require a lot of advocacy work to ensure that people stick to prevention recommendations.”

He further stated that the resources will also be used to ensure an adequate supply of essential goods such as food items (like wheat and edible oil) to aid the vulnerable.  

Meanwhile, Fikadu pointed out “Although it will be challenging to implement large-scale social intervention to combat job losses and aid the informal sector, it is important to ensure that those in extreme poverty have access to basic items to survive.”

There will be a need to revive severely-affected sectors after the pandemic has subsided, he said, adding “this can be achieved by providing low-cost lending and rescheduling loans to various enterprises whose incomes have been severely affected”