This paper aims to assess the short-run distributional impact of the COVID-19 pandemic in Senegal by specifically looking at income losses, poverty and inequality impacts, and how the Government would go about offsetting them. Using a detailed household expenditure survey and two approaches that make various assumptions regarding the riskiness of income sources and types, the share of households losing income and the extent of those losses, the paper suggests that the welfare consequences are indeed very large. An increased share of households losing more and more income would lead to an estimated income loss of up US$ 263.3 million per month or 12.6% of monthly GDP, poverty rate reaching 72.3%, and a worsening in inequality. With survey evidence of the extent of losses across industries and income types, the paper shows that losses tend to emanate from rural areas as opposed to Dakar and other cities, and from industries such as transport/travel, financial intermediation and housing services (per capita losses), agriculture and personal services (absolute losses). The paper also provides an estimate of the monthly budget (US$ 246.6 million, or 11.8% of monthly GDP) in the form of adult-equivalent uniform transfer that would fully offset the poverty impact, conditional on a targeted mechanism that espouses the distributional impact across geographical locations.
