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Regional commerce evolves to keep essential goods moving

On February 27, Nigeria confirmed the first case of Covid-19 in Sub-Saharan Africa. Since then, the virus has spread to all corners of the continent.

Even before the first cases were recorded in Africa, Covid-19 was already impacting international demand for exports in key sectors such as textiles and horticulture. Flower exports are down by more than 90 per cent and tourist arrivals have ground to a halt. The Kenya National Bureau of Statistics reported that imports dropped by more than 20 per cent in the first two months of 2020, with Chinese imports plummeting around 37 per cent.

As the pandemic continues, the projected losses grow. Trade volumes in the EAC are down by up to 25 per cent since the beginning of 2020, with even greater reductions in the informal sector.

African countries, conscious of the fragility of their public health systems and limited intensive care capacity, have instituted strict measures to stem the spread of the virus. However, for many in the region, their livelihood depends on moving about freely. There is no work-from-home option for the hundreds of thousands of small-scale traders. A day of work missed often translates to a day without food on the table.

While health considerations are of primary importance, the prospects for tackling the challenges the pandemic presents are inextricably linked to trade and the economy.

Continued trade at this time is crucial for three main reasons. First, trade is essential in ensuring people and governments have what they need to weather the pandemic, from food to medical supplies and hygiene products. Efficient and expedited trade is critical to solving problems the region is facing given the high levels of unanticipated demand for related products and the speed at which Covid-19 has spread in many countries.

Second, trade is already playing a key role in helping to provide some of the answers to the crisis. While many businesses have seen demand collapse overnight, some have been able to adapt their offering and switch to the production of essential items.

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For example, in Uganda, Rwenzori Beverages Ltd has started producing hand sanitisers, while Nice House of Plastics and Crest Foam are working to deliver personal protective equipment for healthcare workers. In Kenya, the Kitui County Textile Centre is churning out 30,000 surgical masks per day.

The longer-term development of regional manufacturing capacity would reduce over-reliance on imports and support job creation. The Africa Continental Free Trade Area will also provide markets for goods made in Africa, for Africa.

Third, trade prepares countries for recovery after the pandemic The more economic activity that can be maintained the better positioned they will be to bounce back and adapt to a changed world.

As transport routes can be infection conduits, there needs to be a strong and urgent focus on how we can make trade safe in the current context. Measures must be instituted that protect both the livelihoods and the health of traders, businesses, and their employees. We need to think about safe trade zones in addition to special economic zones.

Measures such as the introduction of hygiene facilities and testing at key border crossings and ports, the provision of protective equipment for staff at border posts, the purchase of mobile testing labs for use along major transport corridors, and surveillance systems and quarantine facilities for truck drivers.

The deployment of technology, e-commerce and digital solutions like mobile money has reduced the need for physical human contact.

To support East African governments’ response to Covid-19, TradeMark East Africa is launching a $20 million “Safe Trade” emergency facility, which combines short to medium-term measures in support of continued trade to protect livelihoods and avoid job losses. The facility has three main elements and focuses on making the ports, borders, and critical supply chains safe; ensuring food security and access to medicine; and supporting measures that prevent job losses.

These interventions will reduce the region’s dependence on external suppliers by boosting domestic and regional production of goods and inputs. Working to strengthen regional value chains during this crisis will ensure East Africa is better positioned to tackle future crises. We face challenges that we have not seen in a generation, with millions laid off in key export industries, and we need new ways of transacting business and producing goods.

Erastus Mwencha is the chair of TradeMark East Africa and former secretary general of the Common Market for Eastern and Southern Africa. Frank Matsaert is the CEO of TradeMark East Africa.

Source: The East African

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark East Africa.

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