IMPORTANT ANNOUNCEMENT

Second survey on COVID-19 pandemic and its economic impact on African countries  - The United Nations Economic Commission for Africa (ECA) and International Economics Consulting Ltd teamed up in April 2020, in order to carry out the first survey and provide insights into the economic effects of the pandemic on economic activity and trade for businesses across Africa. The analysis and full report has been published and can be accessed here.

Based on the positive responses of the April Survey, and with a view to shedding light on the policy responses and understanding how businesses are progressing during the pandemic, the team is proposing a second round of the survey. Please also note that the scope of the questionnaire has been slightly expanded (compared to the first round) to account for issues that are gaining even more importance in the context of the pandemic and relating to supply chains, technology, competition and gender.

This survey should take 15 minutes to complete, and please rest assured all responses will remain strictly confidential. Please click on the link below to begin the survey, the deadline for completing the survey is Sunday 28 June.

https://www.surveymonkey.com/r/Covid-19-Africa-Impact

Thank you very much for giving your time to help us with our research. If you have any queries or comments about the survey or the research study, please do not hesitate to contact us by mail eca-atpc@un.org.  

INTERNATIONAL

Four trade trends post COVID-19 and how they will affect growth – COVID-19 is likely to be looked upon as a watershed in the globalization process. The pandemic will act as an accelerant and catalyst for far-reaching changes in the global economy, some of which may have a lasting impact on trade. This article looks at four possible trade trends which could improve the quality and resilience of the world economic system. The Government-imposed “lock-downs” aimed at preventing the spread of the COVID-19 virus have brought the world economy to a sudden stop. This has resulted in a sharp cyclical contraction in dollar value and volume of trade, due to a cyclical collapse in demand (particularly for energy) and to price deflation. The result will be the sharpest and deepest contraction in trade and GDP since at least the 1930s.

The robustness and trajectory of the economic recovery is uncertain. In each of the past three global recessions, the amount of stimulus required to restart the economy has risen, the range of tools necessary to make monetary policy work has expanded, growth post-recovery has looked more anemic, and the growth benefits have seemed less evenly spread. The COVID-19 pandemic is likely to accelerate and catalyze far-reaching changes in the global economy, some of which may have a lasting impact on trade and economic growth. This article looks at four structural trends which might be accelerated by the pandemic, and how they might impact the nature, quantum and speed of the global economic recovery:

1. Decarbonization

The “green agenda” was already gathering momentum. The pandemic has emphasized the impact of humans on nature and how threats to biodiversity and climate make use more vulnerable to diseases. The fiscal stimulus being implemented to restart the global economy should hopefully contain a larger green element that may help accelerate the decarbonization of our economies.

2. Decoupling

Before the pandemic, the asymmetric nature of the trade and investment relationship between China and most of its trading partners and China’s policy of “national rejuvenation” drove the acceleration of bilateral trade tensions between China and its partners. COVID-19 will likely quicken and deepen the bifurcation of global value chains. Dependencies on China will be reduced, global value chains will be shortened, supply redundancy will become more common (and potentially more costly) and we may see more localization of production.

3. Automation

The de-Sinification of manufacturing, together with the pandemic-induced desire to reduce human interaction will likely accelerate advances in robotics and automation that were already underway. The productivity-enhancing benefits of this shift should be welcomed.

4. Usage of AI, big-data and digital currencies

Technology was broadly used to contain the spread of the virus. This has highlighted both the positive impacts of technology and its risks to individual liberty when misused. The pandemic may well have brought forward the widespread use of Artificial Intelligence and “Big Data”. This will include use of digital currencies which have the potential, among other things, to transform payment systems. (hinrich foundation)

Key Words: Global Trade, COVID-19, Business

The COVID -19 Pandemic : 21^st Century approaches to tracking trade policy responses in real time - Concern has been expressed in many quarters about government resort to trade restrictions, notably limits on exports of medical goods, medicines, and agricultural and food products.  Information is needed on trade policy stance across the globe, thereby facilitating assessment of the frequency of any COVID-19 pandemic-era trade policy intervention. Complicating matters is that governments often announce to the media changes in their trade policies before publishing official decrees and implementing regulations and in advance of notifying the World Trade Organization. Before the COVID-19 pandemic, information on these matters was sparse, dispersed, and, where available, frequently incomparable.

The purpose of this initiative is to collect information on changes in trade policy towards export and imports of medical and food products so as to document the cumulative resort to trade policies since the beginning of 2020. Information on such policy changes are processed, collated, and shared with the European University Institute and the World Bank on a weekly basis. Maps summarising some of the features of the cumulative policy response are prepared as well.   Current multilateral trade disciplines allow governments under certain conditions to implement trade restrictions. This monitoring exercise does not take a position on the WTO consistency of a jurisdiction’s trade restrictions. Nor consistency with any relevant regional trade agreement obligations.

Scope of this initiative - This section of the methodology note relates to the range of goods and trade policy interventions that fall within the scope of this monitoring initiative. This should not be confused with the manner in which information is reported on these policy interventions, which is described in the next section.  This initiative is confined to trade policy changes in the following sectors: medical goods and medicines, and agricultural and food products. The products falling under each of these sectoral headings are listed in the Annex. Products not listed are out of scope. As far as export policies are concerned, policy interventions involving unilateral changes in the following policy instruments are within scope:  Outright export bans; Export control policies, including export authorisation policies; Export quotas.  Non-automatic export licensing requirements; State requisition policies that de facto frustrate exports; State exhortation to local producers not to export and requirements that local producers reserve a minimum percentage or amount of their production for the local market.

As far as import policies are concerned, policy interventions involving unilateral changes in the following policy instruments are within scope: ● Import bans. ● Import tariffs. ● Import quotas.● Tariff rate quotas for imports. ● Import licensing regimes. ● Import monitoring regimes.  ● Customs-related trade facilitation measures. ● Internal taxation of imports, including any changes in value added taxes paid by importers.

Policy interventions by national and sub-national governments, as well as actions taken at the supra-national level as part of a regional trade arrangement (including customs unions), are within scope of this initiative.  (Global Trade Alert)

Key Words: Global Trade, World Bank, COVID-19, EUI

WTO COVID-19 Trade Facilitation Toolkit - As governments and organizations have adopted and implemented a series of measures and actions in response to the COVID-19 pandemic, relevant information has become abundant and dispersed in different platforms, making it hard for policy makers and trade operators to have a thorough overview of such measures. Facilitated access to such information (which is changing rapidly and frequently) is crucial, in order to enhance awareness and understanding of all these actions which have been undertaken. Within this context, trade facilitation acquires a particular importance, and mechanisms adopted to maintain the flow of safe cross border trade have emerged as key policy tools to address the challenges brought by the current global pandemic.

The COVID19 Trade Facilitation Repository is a joint platform of actions and initiatives adopted by organizations that aims at consolidating this information on trade-facilitation measures adopted by key stakeholders, which aims at facilitating access to this information by making it user-friendly, easily accessible, searchable and unifying in one single database (avoiding multiple searches in different engines and platforms). It contains a useful listing of all such initiatives and is broken down by organization, type of measure, and subject matter. (WTO)

Key Words: Global Trade, WTO, COVID-19

Satellite technology gives developing nations food security boost – Earth observation and crop monitoring on a massive scale are neither easy nor inexpensive exercises, but both are necessary for proper food security planning. Yet, many developing countries simply don’t have access to required tools, either due to technology deficits or costs. China aims to help bridge this technology gap by offering developing countries access to its earth observation satellite system for crop monitoring, CropWatch, in partnership with United Nations Commission on Science and Technology for Development (CSTD), under the secretariat of UNCTAD. CropWatch is a system that uses satellite data to monitor crop conditions and integrates this with other climate-related data on drought, pest and disease for better farm management. “In a time of crisis, satellite technology can support critical decision-making and help countries shore up their food security,” said Ms. Shamika Sirimanne, CSTD secretariat head and UNCTAD technology and logistics director. The severe locust swarms in East Africa and the Horn of Africa earlier this year, and disruptions to normal farming and the food supply chain caused by stalled trade due to the COVID-19 crisis, are two examples where better access to technology could have helped.

Closing the gap - The Chinese government are seeking to close this gap through a new three-way partnership between the Chinese Academy of Sciences (CAS), the Alliance of International Science Organizations (ANSO) and CSTD. CropWatch has been used by China since 1998 to assesses national and global crop production, serving as an important tool in decision-making on the food market, annual planning of food import-export and disaster relief. The technology has been deployed in several developing countries and will now be extended to more under the partnership. It will help them monitor their crops and the system can be customized by country and region to meet specific needs.

Combating food insecurity with data - The partnership was announced at the 23^rd annual meeting of the CSTD, which took place virtually for the first time this year, by Prof. Bai Chunli president of CAS and the ANSO. During the CSTD various countries make commitments to advancing science and technology collaborations. Mr. Bai said the coronavirus pandemic lays bare the data divide between developed and developing countries, and this impacts their ability to make good, strategic decisions about food supply. “The COVID-19 pandemic has made us realize more than ever before, the importance of solidarity, international cooperation and the need for science and innovation in our fight against our common challenges,” Mr. Bai said. “In the current crisis, it is important for food-insecure countries to have firsthand information on the world’s food production, both at national and global levels,” he said. The availability and transparency of this information is a challenge, Mr. Bai noted, because the countries don’t own their own monitoring and analysis systems. “These countries must take the risk of making decisions based on information from a third party, which is either delayed or unverifiable,” he said. The best situation is one in which countries have a monitoring and analysis system of their own. CropWatch offers this opportunity by allowing countries to carry out independent monitoring and analysis of agro-information and crop production with the application of remote sensing data. (UNCTAD)

Key Words: Global Trade, Development, COVID-19

PAN AFRICA

African Countries Need to Seize Opportunities Created by US-China Tensions – The second theatre of struggle for African countries is in global supply chains.  The COVID-19 reality, combined with the ratcheting up of US-China tensions over trade, technology and supply chains, has opened up opportunities that African countries should exploit.  Combined, they have exposed serious problems in supply networks across various sectors. These include digital products, food, pharmaceutical and medical supply chains.  These sectors represent opportunities for African countries to develop new products, services and capabilities. They could, for example, provide answers to safeguarding Africa’s food security needs, local production of essential drugs and medicines, low-cost medical tests and equipment, and logistics. But African countries will need to work more collaboratively to develop thriving economic sectors and cross-border industrial linkages. Trade will, in our view, be a critical enabler for this. This leads us to the third domain, namely the need for African countries to deepen trade integration and economic cooperation. This will provide a basis for diversifying from over-reliance on export markets such as China and the US, and to build internal resilience.

Intra-Africa trade - Intra-African trade accounts for just 16% of total African trade. This compares with 52% in Asia and 73% in Europe. African trade is highly concentrated on a few economic hubs: China and Europe together account for 54% of total African trade, with China being Africa’s single largest trading partner. It accounts for over 14% of total African trade. The African Continental Free Trade Area creates the institutional and infrastructural framework for Africa to strengthen intra-African trade, diversify its trading partners and implement long-overdue trade policy reforms.  COVID-19 has induced significant delays in the implementation of this trading arrangement. It should, in fact, have magnified a sense of urgency. But instead of showing adaptability, African leaders pressed a pause button. As a result, the continent could miss an opportunity to accelerate development of cross-border value chains in medical supplies and equipment and other areas.

Imagination and courage - African countries should seize the opportunities presented by deepening tensions between China and the US to realise positive agency and chart their own future. They will need to be more proactive and adaptive under the fluid and uncertain global environment. This will require a great deal of imagination and courage.  African countries face a daunting set of challenges and constraints. But policymakers always have options. (The Conversation)

Key Words: AfCFTA, COVID-19, Trade and Investment

African Development Bank COVID-19 response: moving from commitment to action - The African Development Bank has responded swiftly to the needs of its member countries during the ongoing COVID-19 pandemic. The Bank’s operations have continued to run smoothly since the first cases appeared in early March, despite the wide range of lockdowns and measures imposed by governments to flatten the curve. The COVID-19 pandemic is forecast to cause Africa’s GDP to drop by between $22.1 billion and $88.3 billion. African countries, with the experience of having fought off Ebola, are working to adapt to this new threat and looking to the Bank for an effective, multilateral response to the crisis. As of June 12, the Bank’s COVID-19 emergency packages have reached the continent’s five geographic regions.

West Africa - Before the advent of the COVID-19 pandemic, West Africa was home to at least four of the continent’s fastest-growing economies, and it has felt the impact of the disease hard, as borders remain closed and economic and social distress deepens. Gambia, Mali and Niger will benefit from an ECOWAS support package to bolster national health systems in response to the pandemic. Much of the funds to this region will seek to address shortages in personal protective equipment (PPE), ventilators and other emergency equipment. The support will also enable governments to provide shortfall cash to the millions of people who have been affected by mass layoffs or are unable to work because of lockdowns.

• Nigeria – $288.5 million
• Senegal – 88 million euros
• Côte d’Ivoire – 75 million euros
• Cabo Verde – 30 million euros
• ECOWAS – $22 million

 North Africa - The North African region is the worst hit by the COVID-19 pandemic, with over 60,000 cases as at 12 June. The disease has already triggered a sharp drop in household incomes in North Africa, as export and tourism earnings suffer. The region will be assisted with a series of emergency operations to boost containment measures and help to ensure the supply and distribution of laboratory tests and reagents. The package will also support national and regional coordination mechanisms.

• Morocco – 264 million euros
• Tunisia – 180 million euros
• Egypt – $500,000

 East Africa - East Africa, the continent’s fastest-growing region economically, has been simultaneously struck by the coronavirus outbreak and an infestation of desert locusts, a double whammy for the region’s farmers and economies. In a region of climate change and water scarcity, post-harvest losses and poorly developed agricultural markets could threaten the promise of economic reforms and investment. Ethiopia, Kenya and Rwanda are the top-performing countries, which have all seen a sharp fall in tourism revenue.

• Kenya – 188 million euros

 Southern Africa - A decisive lockdown has been effective in stemming the spread of COVID-19 in the region’s economic powerhouse, South Africa. The spread of the virus is by no means curtailed. Measures taken across the region to contain the pandemic have affected millions of people, many of whom work in the informal economy. Assistance to this region comes in the form of preventive and protection measures as well as financial assistance to the vulnerable beyond the end of the epidemic.

• Mauritius – 188 million euros
• Zimbabwe – $13.7 million

 Central Africa - In Central Africa, Cameroon has reported over 8,000 cases as at 12 June and significant community transmission. The package approved for this region, $13.5 million, will target the provision of PPEs, testing kits and healthcare and laboratory facilities, for Chad, the Democratic Republic of Congo and the Central African Republic, which is among the countries with the least number of ventilators on the continent.

• CEMAC/RDC – $13.5 million

(AfDB)

Key Words: AfDB, Trade and Investment, COVID-19

Contributing to business continuity and national COVID-19 responses in the African continent – Ensuring a steady flow of investments in Mozambique and Kenya will help manage the crisis. Helping Mozambique in the crisis - Operating under the Ministry of Industry and Commerce (MIC), The Agency for the Promotion of Investments and Exports (APIEX) is an institution that created an ad-hoc commission to respond and lead all efforts in the fight against the COVID-19 pandemic within the Ministry and in collaboration with other government institutions. The institution received IT support including hardware, software and connectivity resources, from the Partnership for Investment and Growth in Africa (PIGA) project.

"We thank the partners of the PIGA program and the International Trade Centre, who are committed to the Government of the Republic of Mozambique in making an increased effort, so that APIEX can continue to mobilize resources with several national cooperation partners. The computer will help us in continuing our work in a redoubled way", said the vice-minister Ludovina Bernardo. The equipment to be allocated to APIEX staff, will enable them to work remotely and to ensure continued services to potential and existing investors. Using this equipment staff can attend capacity-building webinars organized by ITC to strengthen their investment promotion and facilitation services. This includes the deployment of a Foreign Direct Investment (FDI) tracking tool that will enable APIEX to adequately track, monitor and better serve the needs of foreign investors in Mozambique.

Facilitating investors in Kenya - The Kenya Investment Authority (KenInvest) - also received IT equipment support from PIGA. "This equipment will enhance our capacity to serve investors effectively from home as we wrestle the COVID-19 pandemic. KenInvest will be able to ensure business continuity and keep serving and attracting investors during the Covid19 crisis, which will greatly contribute to the country recovery" said Dr. Ikiara, KenInvest Managing Director. In addition, the support will enable KenInvest to identify and fast track investment projects critical for managing COVID-19. This includes investments for production of Personal Protective Equipment for Kenyan front line health workers and the wider Kenyan population. KenInvest is part of coordinating these efforts through the One Stop Centre. This Centre aims to streamline and simplify investing in Kenya by providing unique access to all relevant bodies involved in the investment process, such as Business Registration Services, the Department of Immigration, the Kenya Revenue Authority and the National Environmental Management Authority. Through its Managing Director, KenInvest is also part of the National Emergency Response Committee (NERC) for COVID-19. Two other investment promotion agencies collaborating with PIGA in Ethiopia and Zambia are also receiving support to help ensure businesses keep running and contributing to their country's COVID-19 response. (ITC)

Key Words: Africa, Trade, COVID-19

EAST AFRICA

Inside Rwanda’s 10 multi-billion dollar green projects – Rwanda recently submitted its new national climate plan dubbed “Nationally Determined Contributions (NDCs)”  to the United Nations Framework Convention on Climate Change (UNFCCC). This is part of plans to create essential tools to implement the Paris Agreement to cope with climate change. The financial resources for its implementation will be sourced from government budget, Rwandan communities, the private sector, NGOs, Rwanda Green Fund as well as international stakeholders Doing Business looked into the report and compiled top ten multimillion climate investments in the next ten years for climate change mitigation and adaptation.

$380 million efficient cook stoves - Among the pledged investments include dissemination of modern efficient cook stoves to 80 per cent of the rural population and 50 per cent of the urban population by 2030 at the cost of $380 million with a target to reduce firewood and fossil energy consumption for cooking, the move that will reduce pressure on forests.

$285 million solar pumping for irrigation project - Rwanda has planned to invest $285 million in the use of solar water pumping systems for irrigation within agricultural production to replace diesel pumps, replace fossil fuel use which will reduce gas emissions that cause climate change and thus improves food security.

$206 million solar mini-grid project - Government also has plans to invest $206 million in the installation of solar mini-grids that could supply 68 MW (Mega Watt peak) in off-grid rural areas by 2030, as reflected in the Rural Electrification Strategy. This will reduce the use of traditional biomass fuels, diesel and kerosene for domestic energy use.

$900 million electric vehicles - The e-mobility programme plans for the phased adoption of electric buses, passenger vehicles (cars) and motorcycles from 2020 onwards. Requiring $900 million investment, the programme will reduce harmful pollutants and enhance resilience of population to disease and adverse climate impacts.

$36 million for generation of energy from waste - Rwanda seeks to invest $28 million in extraction and utilization of gas landfills (LFG)   for power generation which will then reduce methane gas emissions in the air. The country also seeks to invest $8 million in setting up Waste-to-energy (WtE) plants in Kigali.

Climate resilient crop varieties- At least $24 million will be spent on developing climate resilient crops and promote climate resilient livestock. This will reduce gas emissions from land use and livestock. At least $109.6 million will help expand crop and livestock insurance.

Huge investments in afforestation -  $16.8 million will be spent on promoting afforestation and reforestation of designated areas. Improving forest management for degraded forest resources is expected to cost $8.1 million while development of agroforestry and Sustainable Agriculture will require $91 million. (The New Times)

Key Words: East Africa, Trade, Investment

Regional Focus on the Intergovernmental Authority on Development (IGAD) Member States of the 2020 Global Report on Food Crises – An estimated 27.6 million people across the IGAD region were classified in Crisis or worse (IPC Phase 3+) levels of acute food insecurity in 2019. This figure represents 20% of the total population facing food insecurity that required urgent action across the world. Without taking into account the effects of COVID-19, projections indicate that around 25 million people would face acute food insecurity in the region requiring urgent action (IPC Phase 3 or above) in 2020, largely as a result of weather extremes, conflict/insecurity and economic shocks. However, the ongoing COVID-19 pandemic is likely to push the numbers of acutely food-insecure people well beyond these early 2020 forecasts.

Key Words: East Africa, Regional Trade, COVID-19

WEST AFRICA

Agency for Health and Food Security advocates for training of agric value chain actors — The Agency for Health and Food Security (AHEFS), says agricultural value chain actors and implementing partners should be properly trained and their responsibilities clearly defined to prevent role-conflicts and ensure proper coordination of various sectors. Mr Kwaku Asante, Executive Director of AHEFS, underscored the need for the Ministry of Food and Agriculture (MoFA) to collaborate with the Ministry of Trade and Industry to enhance the vegetable value chain and to enhance the market for local farmers. He said there is also the need for the Ministry of Local Government and Rural Development and the Metropolitan, Municipal and District Assemblies (MMDAs) to put in place appropriate modalities for assisting farmers within geographical locations to connect local market. Mr Asante was speaking at a National Dialogue on Vegetable Value Chain Policy, hosted by AHEFS in collaboration with the National Development Planning Commission (NDPC) in Accra.

The vegetable market alone is growing at more than 10 per cent per annum and the potential value for export is estimated at $250 million. Despite the economic prospects of the sector, the overall vegetable production in Ghana is still relatively low in comparison with other sub-Saharan African countries. The event was held under the theme: Systems Approach to Vegetable Value Chain Policy, Pandemic Response and Africa Continental Free Trade Area (AfCFTA) Agreement”. Mr Asante said as a country hosting AfCFTA would mean that Ghana should be up when it comes to trade in Africa, establish institutions to guard such projects, otherwise other countries would overtake the market and local industries are likely to collapse. “We must have beneficial local policies that are functional enough to guarantee the benefits of small scale industries”, he added. Dr Kodjo Esseim Mensah-Abrampah, Director-General of NDPC, said looking at the President’s vision as expressed in the Coordinated Programme for Economic and Social Development Policy, one of the key things it highlighted was modernising agriculture. He said one of the things captured under modernising agriculture was the strategic point which was named in the document; turning agriculture to a demand-driven process instead of a supply focused process. He said there is the need for the nation's farmers to be informed of the marketing opportunities that exist for their products so that they would be encouraged to produce more.  (Ghana Web)

Key Words: West Africa, AfCFTA, COVID-19

SOUTHERN AFRICA

SADC Regional Response to COVID-19 Pandemic - Report on the COVID-19 Pandemic in the SADC Region with a specific impact on fisheries and aquaculture value chain - The Bulletin 6 of the SADC Regional Response to COVID-19 provides highlights on recent tools and guidelines released by the World Health Organization (WHO). These include a case report form for a suspected case of Multi system inflammatory syndrome (MIS-C) as well as guidance in recommendations for mass gatherings, which is a resource to be used by Member States. The report further highlights the resolution adopted by the World Health Assembly (WHA). The resolution seeks to establish the origins of the novel coronavirus as well as initiate an “impartial, independent and comprehensive evaluation” on the response of the WHO to the coronavirus crisis. The global, continental and regional situation of COVID-19 is also presented. The Bulletin also present the impact of COVID-19 on value chains, with emphasis on the fisheries and aquaculture value chain which was deliberated during the virtual meeting of Ministers responsible for Agriculture and Food Security, and Fisheries and Aquaculture held on 22 May 2020. Further, the Bulletin provides updates on the implementation of the SADC Guidelines on the Harmonization and Facilitation of Cross Border Transport Operations across the region, and on the Secretariat’s resource mobilization efforts towards COVID -19.

Key recommendations from the report include;

• The gradual resumption of economic activities to be conducted simultaneously with the scaling up of the testing capacity in areas where public health measures are being lifted.
• The testing policy should be informed by the epidemiological scenarios in the country and must follow WHO recommendations in terms of prioritization of populations and individuals and priority should be given to testing of health care workers, communities with clusters and exposed individuals in quarantine.
• Ensuring supply chain access with consideration of gender, and, for those operations exporting within the region, continent and overseas, ensuring continued access to and cooperation from officials at ports, rail and border crossings so they can maintain their sales.
• Continuous Implementation of the SADC guidelines on facilitation of cross-border transportation with emphasis on adopting harmonized test protocols including mutual recognition of test results and agreement on validity period of test result.

(SADC)

Key Words: SADC, Trade, COVID-19