5/8/2020 The impact of COVID-19 (Coronavirus) on global poverty: Why Sub-Saharan Africa might be the region hardest hit

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Publish d on D t Blo (/op nd t )

Th imp ct of COVID-19 (Coron virus)

on lob l pov rt : Wh Sub-S h r n
Afric mi ht b th r ion h rd st hit
DANIEL GERSZON MAHLER (/TEAM/DANIEL-GERSZON-MAHLER), CHRISTOPH LAKNER (/TEAM/CHRISTOPH-
LAKNER), R. ANDRES CASTANEDA AGUILAR (/TEAM/R-ANDRES-CASTANEDA-AGUILAR) & HAOYU WU
(/TEAM/HAOYU-WU) | APRIL 20, 2020
This page in: English

   
1

COVID-19 is taking its toll on the world, causing deaths, illnesses and economic
despair. But how is the deadly virus impacting global poverty? Here we’ll argue that
it is pushing about 40-60 million people into extreme poverty, with our best estimate
being 49 million.

Nowcasting global poverty is not an easy task. It requires assumptions about how to
forecast growth and how such growth will impact the poor, along with other
complications such as how to calculate poverty for countries with outdated data or
without data altogether. All of this goes to say that estimating how much global
poverty will increase because of COVID-19 is challenging and comes with a lot of
uncertainty. Others have tried to answer the question using general equilibrium
models (https://www.ifpri.org/blog/how-much-will-global-poverty-increase-because-
covid-19) or by exploring what will happen if all countries’ growth rates decline a
xed amount (https://www.wider.unu.edu/sites/default/ les/Publications/Working-
paper/PDF/wp2020-43.pdf). Here we’ll try to answer the question using household
survey data and growth projections for 166 countries.
In particular, we take data from the latest year for which PovcalNet
(http://iresearch.worldbank.org/PovcalNet/home.aspx) (an online tool provided by
the World Bank for estimating global poverty) has poverty estimates for a country

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5/8/2020 The impact of COVID-19 (Coronavirus) on global poverty: Why Sub-Saharan Africa might be the region hardest hit

and extrapolate forward using the growth projections from the recently launched
World Economic Outlook
(https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/weo-april-2020), in
which global output is projected to contract by 3% in 2020. This approach assumes
that countries’ growth accrues equally to everyone, or in other words that COVID-19
does not change inequality within countries (more on that below). Comparing these
COVID-19-impacted forecasts with the forecasts from the previous edition of the
World Economic Outlook from October allows for an assessment of the impact of
the pandemic on global poverty. Of course other factors may have also worsened (or
improved) countries’ growth outlooks between October and April but it’s safe to say
that most of the changes in the forecasts are due to COVID-19.

The Impact of COVID-19 on Global Poverty

11

10.5

10

9.5
Global poverty rate (%)

8.5

7.5

6.5

6
2014 2015 2016 2017 2018 2019

Historical trend
Forecast before COVID-19
Current forecast

Source: PovcalNet • The global poverty rate is measured as the share of the world's population living on less than $1.90
d
A Flourish chart (https://public.flourish.studio/visualisation/1933123/?

utm_source=showcase&utm_campaign=visualisation/1933123)

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5/8/2020 The impact of COVID-19 (Coronavirus) on global poverty: Why Sub-Saharan Africa might be the region hardest hit

Such forecasts reveal that COVID-19 is likely to cause the rst increase in global
poverty since 1998  (https://twitter.com/intent/tweet?text=COVID-
19+is+likely+to+cause+the+ rst+increase+in+global+poverty+since+1998&url=https://b
covid-19-coronavirus-global-poverty-why-sub-saharan-africa-might-be-region-
hardest/?cid=EXT_WBBlogTweetableShare_D_EXT&via=worldbankdata) , when the
Asian Financial Crisis hit. With the new forecasts, global poverty—the share of the
world’s population living on less than $1.90 per day—is projected to increase from
8.2% in 2019 to 8.6% in 2020, or from 632 million people to 665 million people.
Compare this with the projected decline from 8.1% to 7.8% over the same time
period using the previous World Economic Outlook forecasts. The slight change from
8.2% to 8.1% for 2019 happens because the revised growth forecasts also changed
for non-COVID reasons for some countries. Taking this into account, it means that
COVID-19 is driving a change in our 2020 estimate of the global poverty rate of 0.7
percentage points — (8.6%-8.2%)-(7.8%-8.1%). Another way to put this is that the
estimates suggest that COVID-19 will push 49 million people into extreme poverty in
2020  (https://twitter.com/intent/tweet?text=estimates+suggest+that+COVID-
19+will+push+49+million+people+into+extreme+poverty+in+2020&url=https://blogs.wo
covid-19-coronavirus-global-poverty-why-sub-saharan-africa-might-be-region-
hardest/?cid=EXT_WBBlogTweetableShare_D_EXT&via=worldbankdata) . 

The places where the virus is taking its highest toll depends primarily on two factors:
1) the impact of the virus on economic activity and 2) the number of people living
close to the international poverty line. IMF projects that advanced economies will
contract by around 6% in 2020 while emerging markets and developing economies
will contract by 1%. Yet with more people living close to the international poverty
line the developing world, low- and middle-income countries will su er the greatest
consequences in terms of extreme poverty. Though Sub-Saharan Africa so far has
been hit relatively less by the virus from a health perspective, our projections
suggest that it will be the region hit hardest in terms of increased extreme poverty. 
 (https://twitter.com/intent/tweet?text=Though+Sub-
Saharan+Africa+so+far+has+been+hit+relatively+less+by+the+virus+from+a+health+pe
covid-19-coronavirus-global-poverty-why-sub-saharan-africa-might-be-region-
hardest/?cid=EXT_WBBlogTweetableShare_D_EXT&via=worldbankdata) 23 million of
the people pushed into poverty are projected to be in Sub-Saharan Africa and 16
million in South Asia.

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5/8/2020 The impact of COVID-19 (Coronavirus) on global poverty: Why Sub-Saharan Africa might be the region hardest hit

Millions pushed into extreme poverty due to COVID-19

East Asia & Pacific Europe & Central Asia Latin America & Caribbean Middle East & North Africa
North America South Asia Sub-Saharan Africa

increase

4.5 2.7 2.8 15.6 22.6

0 5 10 15 20 25 30 35 40

Millions of people

A Flourish chart (https://public.flourish.studio/visualisation/1922772/?

utm_source=showcase&utm_campaign=visualisation/1922772)

At the country-level, the three countries with the largest change in the number of
poor are estimated to be India (12 million), Nigeria (5 million) and the Democratic
Republic of Congo (2 million). Countries such as Indonesia, South Africa, and China
are also forecasted to have more than one million people pushed into extreme
poverty as a consequence of COVID-19. When looking at the impact of the pandemic
on higher poverty lines, for example the number of people living on less than $3.20
or $5.50 per day, more than 100 million people will be pushed into poverty. Latin
America & Caribbean, East Asia & Paci c and the Middle East & North Africa are all
expected to have at least 10 million more people living on less than $5.50 per day. 
One way to gauge the uncertainty around these headline numbers is to explore
what will happen under slightly more optimistic or pessimistic scenarios. For
example, what would happen if growth in all countries were 1 percentage points
lower or higher than the World Economic Outlook projections? And what would
happen if COVID-19 changes inequality in countries? We know that low-income
workers are more likely to lose their jobs as a result of COVID-19, but what does this
imply for the poor in Sub-Saharan Africa, many of whom are subsistence farmers?
And what about the many emergency packages countries have implemented to
assist the most vulnerable households? And what about the decline in wealth from
the fall in the stock market which is likely to hit the well-o most? COVID-19 will likely
impact countries’ inequalities di erently.
What would happen if alongside the deteriorated growth forecasts inequality as
measured by the Gini coe cient increased or decreased by 1% in all countries in
2020? 1% changes in the Gini from year to year are very common, what is less
common is that these changes go in the same direction in all countries. To measure
the impact of increased inequality, we need to make another assumption: how is
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5/8/2020 The impact of COVID-19 (Coronavirus) on global poverty: Why Sub-Saharan Africa might be the region hardest hit

inequality increasing? Is COVID-19 only hurting the very bottom of the distribution or
is the middle class also a ected? Here we assume something closer to the latter
(which in technical terms will amount to implementing the change in the Gini using a
linear growth incidence curve, following this approach
(http://documents.worldbank.org/curated/en/328651559243659214/pdf/How-Much-
Does-Reducing-Inequality-Matter-for-Global-Poverty.pdf)).

The Impact of COVID-19 on Global Poverty

Enter series to show

11

10.5

10
Global poverty rate (%)

9.5

8.5

7.5

6.5

6
2014 2015 2016 2017 2018 2019

Historical trend Forecast before COVID-19 Current forecast

Current forecast if all countries' growth is 1 pct. point lower in 2020
Current forecast if all countries' growth is 1 pct. point higher in 2020
Current forecast if all countries' Gini coe icient decrease by 1% in 2020
Current forecast if all countries' Gini coe icient increase by 1% in 2020

Source: PovcalNet • The global poverty rate is measured as the share of the world's population living on less than $1.90
d
A Flourish chart (https://public.flourish.studio/visualisation/1964001/?

utm_source=showcase&utm_campaign=visualisation/1964001)

When changing the growth and inequality assumptions, the projections suggest
global poverty estimates in the range of 8.4% and 8.8%, or in other words that the
number of people pushed into extreme poverty will be roughly between 40 and 60
million. In the more pessimistic scenarios, global poverty in 2020 would be close to
the level in 2017—meaning that world’s progress in eliminating extreme poverty
would be set back by three years.

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5/8/2020 The impact of COVID-19 (Coronavirus) on global poverty: Why Sub-Saharan Africa might be the region hardest hit

POVERTY (/SEARCH?F[0]=TOPIC:303&F[1]=LANGUAGE:EN), AFRICA (/SEARCH?F[0]=REGIONS:655&F[1]=LANGUAGE:EN), THE

WORLD REGION (/SEARCH?F[0]=REGIONS:280&F[1]=LANGUAGE:EN), #DATAVIZ (/SEARCH?
F[0]=SERIES:781&F[1]=LANGUAGE:EN), COVID-19 (CORONAVIRUS) (/SEARCH?F[0]=SERIES:881&F[1]=LANGUAGE:EN), OPEN
DATA (/SEARCH?F[0]=SERIES:618&F[1]=LANGUAGE:EN), PANDEMIC PREPAREDNESS (/SEARCH?
F[0]=SERIES:620&F[1]=LANGUAGE:EN)

Authors


(/team/daniel-gerszon-mahler) (/team/daniel-gerszon-mahler)
D ni l G rs on M hl r (/t m/d ni l- rs on-m hl r)
Young Professional, Development Data Group, World Bank

MORE BLOGS BY DANIEL GERSZON (/TEAM/DANIEL-GERSZON-MAHLER)

 
(/team/christoph-lakner) (/team/christoph-lakner)
Christoph L kn r (/t m/christoph-l kn r)
Economist, Development Data Group

MORE BLOGS BY CHRISTOPH (/TEAM/CHRISTOPH-LAKNER)

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
(/team/r-andres-castaneda-aguilar) (/team/r-andres-castaneda-aguilar)
R. Andr s C st n d A uil r (/t m/r- ndr s-c st n d - uil r)
Economist, Development Data Group, World Bank

MORE BLOGS BY R. ANDRES (/TEAM/R-ANDRES-CASTANEDA-AGUILAR)

(/team/haoyu-wu) (/team/haoyu-wu)
H o u Wu (/t m/h o u-wu)
Consultant, Poverty and Equity Global Practice

MORE BLOGS BY HAOYU (/TEAM/HAOYU-WU)

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peter kuruppacharil
APRIL 21, 2020

COVID-19 is managed well in the Indian state of Kerala by enforcing social distancing,
quarantine of new arrivals from outside and creating awareness.The people are briefed
daily on the progress made.
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