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By staff reporter
April 26, 2020 (Ezega.com) – The economic crisis of the COVID-19 pandemic could push 50 million Ethiopians into poverty unless urgent measures are taken, the Association of Ethiopian Economists (EEA) warned.
In a study conducted on the impact of the COVID-19 pandemic, the association said the pandemic will paralyze the nation’s economy causing a loss of up to 200 billion birr if the pandemic prevails over the next year.
Dr. Degeye Goshu, the EEA’s Hunan Poverty Development and Development Expert, said the pandemic will affect the service sector worse and millions of officials will lose their jobs.
Land, capital, including machinery, technology, and leadership will be out of service as the government closes entire economies to control the spread of the virus.
“Staying home” will not be an option for most Ethiopians as advised by the government, since their livelihood depends on daily income, therefore, the government needs to strengthen the food supply chain to avoid starvation .
The pandemic could delay the fight against poverty for at least a decade and could mean that almost half of the Ethiopian population would live in poverty after the pandemic, Dr. Degeye said.
The government should develop a rescue plan by strengthening the safety net program, helping farmers to produce fast-growing crops, mobilizing resources from less active sectors to strengthen the food supply chain.
The study recommends that the National Bank of Ethiopia reduce the mandatory deposits that commercial banks must make to improve their lending capacity and stimulate business, as well as lower interest rates.
According to the lead expert, the government should boost lending services to importers and facilitate payment strategies to overcome the possible economic crisis after COVID-19 infection.
The Ethiopian government recently said that debt cancellation by international lenders would give it access to an additional $ 630 million, enough to increase its health spending by 45 percent.
According to the expert, currently, the poverty level in Ethiopia is 22 percent and if the worst case scenario occurs due to COVID-19, more than 50 million people would arrive below the poverty line.
Meanwhile, Ethiopia reported five new cases of coronavirus out of 1,019 samples taken in the last 24 hours on Saturday. This brings the total number of confirmed cases in the country to 122.
Four of the five cases are Chinese citizens residing in the city of Sebeta, Oromia regional state, who had contact with previously confirmed cases, according to a statement issued by the Ministry of Health.
The other is an Ethiopian living in Addis Ababa, Ethiopia has so far reported three deaths and 29 recoveries from the virus.
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