Assessing the Impact of Covid-19 in Mozambique in 2020

Abstract

Taking advantage of the 2019/2020 Mozambican household budget survey, in the field both before and during the first phases of the Covid-19 pandemic, we assess the impact of Covid-19 on welfare in 2020, aiming to disentangle this impact from the effect of other shocks. Comparing a number of welfare metrics, and applying propensity score matching and inverse probability weighted regression adjustment approaches, we find that consumption levels are significantly lower and poverty rates substantially higher during the first phases of Covid-19 than in the pre-Covid-19 period. Moreover, the impact was greater in urban areas and accordingly in the more urbanised southern region. Non-food expenditures suffered relatively more than food expenditures, likely a coping strategy, while the impact on consumption levels was greater for people working in the secondary and tertiary sectors than for workers in the primary sector, mainly agriculture. Stunting among under-5 children also suffered. Only a limited number of countries have actual, collected in-person, survey data that span across the initial phases of the Covid-19 pandemic. Thus, the present analysis adds value to our understanding of the welfare consequences of Covid-19 in a low-income context, where automatic social safety nets were not in place during the early phases of the pandemic. More specifically, it helps in assessing the results of previous welfare impact simulations, compared to real data. Even though our main findings are broadly in line with existing estimates based on simulations or phone surveys, important differences between the predictions and the actual results emerge. We conclude that it is critically important for Mozambique and its development partners to develop stronger and more targeted policies and tools to respond to temporary shocks.