Evidence from Selected African Countries
This study assesses how food and beverage manufacturing firms in Africa were affected by measures to contain the spread of the Covid-19 pandemic. The sector plays an important role as a source of food and employment on the continent. Consequently, any impacts on the sector will directly affect livelihoods and food security. The data was collected through two survey rounds (May and October 2020) among registered food and beverage manufacturing companies in Ethiopia, Kenya, Nigeria and South Africa. The study finds that the sector proved fairly resilient in the face of the pandemic. By October, most firms were recovering from the initial shock, although production volumes were often still lower than pre-Covid-19. The beverages sector was hardest hit due to restrictions on sales as well as restaurant and bar closures. Many companies were also negatively affected by measures implemented by foreign governments which hampered imports of inputs and exports of products. Companies mostly held onto their employees and found other strategies, such as shift work or paid leave, to cope with production shortfalls. Yet, some impacts appear to have deteriorated over time. With regard to raw material prices, already a major concern in May, the situation had worsened by October. Similarly, more (but still a minority of) firms were forced to lay off workers or reduce salaries in the longer run. To mitigate the negative fallouts of the pandemic, priority should be given to providing firms with financial support, better access to raw materials and social safety nets for employees.
Paper presented at the 2021 International Conference of Agricultural Economists on 17-31 August 2021.