ABSTRACT
The study investigated the potential impact of the COVID-19 pandemic on poverty level in the Sub-Saharan Africa (SSA) region by drawing evidence from past pandemics from 1990 to 2020. The study estimated the impulse response functions (IRFs) within the framework of the SVAR-Panel, which considers responses to both common and idiosyncratic shocks while permitting full cross-section heterogeneity of the response dynamics. The results show that, though the chosen SSA countries are heterogeneous in terms of vulnerability to pandemics alongside institutional, economic, environmental, welfare, social, and political configurations, the current health pandemic will similarly exert a significantly positive impact on poverty level in those countries. In other words, the current pandemic is expected to push many people across the SSA countries into extreme poverty. Interestingly, the study further reveals that, while the current pandemic will exacerbate poverty in SSA, the implementation of sound growth policies, gainful employment policies, remittance attraction policies, attraction of foreign direct investment, free trade flows, and prevalence of strong institutions will serve as good insulators against future poverty incidence in the region. While adopting several preventive measures to stop the spread of the COVID-19 pandemic, policymakers in SSA countries should be aware of their unique vulnerability and resilience to health pandemics in relation to the poverty level.
