Covid 19, Poverty and Inequality: Implication on the Egyptian Economy
Date
2022
Authors
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Publisher
Perspective in Governance: Challenge in COVID-19 Era in Africa, Department of Public Administration and Economics Durban University of Technology, South Africa
Abstract
The adverse impact of COVID 19 pandemic in the year 2020 can be felt globally as it has affected almost all the continent with the impact being felt the most in many first World nations. The impact on Africa is still mild when compared, but despite the slight impact, the effect of the pandemic has plunge so many countries backward with the poor and the vulnerable at the receiving end. It is in the light of the occurrence of the pandemic that this study examined the dynamic interaction among COVID 19, poverty and inequality in Egypt taking into account the effect of the pandemic on some selected structural issues such as number of employed persons, price of gasoline and tourism. A vector error correction mechanism and other diagnostic test was employed to determine both the short run and long run effect of the pandemic on the number of poor people in Egypt and on the income inequality among the Egyptians. Findings revealed that on the short run, a 1% increase in the number of COVID 19 cases give rise to 28% increase in the number of poor people living in Egypt while on the other hand it gives rise to 90% increase in income inequality thereby widening the gap between the rich and the poor. In the long run, findings revealed that a 1% increase in the number of COVID 19 cases give rise to 2% increase in the number of poor people living in Egypt with inequality giving rise to 3% increase in income inequality. This has policy implication as the findings from the impulse response function and variance decomposition revealed a large impact on the short run to shocks from COVID 19 and a mild impact on the long run. The study therefore recommends that efforts should be made by the government and private individuals to curb and eradicate the virus in order to reduce and stop the number of daily cases of the virus in the bid towards the achievement of sustainable development goals of zero poverty and leaving no one behind.
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Keywords
COVID 19, Poverty, Inequality, Egypt, Interaction