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

The Economic Consequences of Disrupted Global Supply Chains - For nearly three decades, global supply chains were the quiet engines of economic globalization. From 1990 to 2008, they drove the rapid expansion of trade, accounting for 60-70% of its growth. More than a decade later, however, they have stalled – and may in some areas be going into reverse.  The strain on global supply chains partly reflects the turn by many governments toward protectionist policies since the openness of the world economy peaked in 2011. And now, the COVID-19 pandemic has caused a supply-shock recession. The related uncertainty may slow the expansion of global value chains by at least 35%. Indeed, world trade is no longer expanding faster than world GDP. If this continues, companies will reshore manufacturing from Asia and elsewhere.It’s clear that shrinking production at firms worldwide will create a recession – and a recovery – unlike any we have seen. In outlooks for next year, the International Monetary Fund, the OECD, and other international organizations assumed a V-shaped recovery. But this narrative was likely influenced by the rapid recovery of global value chains after the 2008-10 Great Recession, a downturn that originated in the financial system, not the real economy worldwide. Given the importance of broken supply relationships in the current downturn, this recession is likely to be unique.

Firms are vulnerable in other ways. For example, suppliers affected by a lockdown impose substantial output losses on their customers when the input they produce is specific to the customer and embodies a high level of research and development and intellectual property. In such cases, switching to another supplier is costly and slow.It’s not surprising that pandemic-related disruptions are unique. After researching three decades of major natural disasters in the United States, Jean-Noël Barrot and Julien Sauvagnat of MIT found that suppliers hit by a flood, earthquake, or similar event impose large output losses on customers. Indeed, when a disaster hit one supplier, firms’ sales growth suffered an average drop of 2-3 percentage points. The impact spilled over to other suppliers, magnifying the original shock.

 It is also likely that this recession will generate lower trend GDP growth. After all, global supply chains were a major driver of productivity growth in many countries in the 1990s and for most the aughts. The integration of Eastern Europe into the global economy after the fall of the Berlin Wall contributed not only to Germany’s recovery from being the “sick man of Europe,” but also to rapid growth in the Czech Republic, Hungary, Poland, Slovakia, and other countries in the region. If the slowdown in the growth of global value chains since 2011 was already contributing to anemic productivity growth in developed countries, an accelerated slowdown, or even contraction, owing to pandemic-related disruptions, does not bode well.  (Project Syndicate)

Key Words: Global Supply Chain, Global Trade, COVID-19

US-China trade war takes toll on their global competitiveness – The world's two biggest economies have become less competitive due to their ongoing trade war, which seems to have no short-term resolution in sight. Both China and the US have slipped down the World Competitiveness Rankings for this year. Smaller economies including Singapore, Denmark and Switzerland top the list. The Institute for Management Development (IMD) survey said their handling of the coronavirus pandemic helped strengthen their positions. The US, the world's biggest economy, slipped seven places to 10th, while China fell six places to 20th. The two economic superpowers have been locked in a trade war since 2018 with import taxes (tariffs) imposed on a wide range of goods.

The trade war has increased uncertainty for businesses, a factor weighing on both countries' competitiveness. "Trade wars have damaged both China and the USA's economies, reversing their positive growth trajectories," the IMD said in its report. Singapore was the most competitive economy for the second year in a row, followed by Denmark and Switzerland. The Netherlands and Hong Kong complete the top five highest ranking economies. "The benefit of small economies in the current crisis comes from their ability to fight a pandemic and from their economic competitiveness," said Arturo Bris, director at the IMD. "In part, these may be fed by the fact it is easy to find social consensus."

The IMD rankings assess 63 economies on hundreds of factors including employment, cost of living and government spending. It also includes surveys of executives on topics such as political stability and protection of intellectual property rights. The UK climbed four spots to 19th, which could be a sign that Brexit has created the perception of a business-friendly environment, said the IMD.  Asia-Pacific economies have generally weakened in terms of competitiveness with most slipping from last year's rankings. Japan dropped four places to 34th although India remained in 43rd spot. (BBC)

Key Words: US-China, Global Trade, COVID-19

PAN AFRICA

Joint Statement of the Extraordinary China-Africa Summit on Solidarity against COVID-19 - After cordial and in-depth discussions, leaders attending the Summit reached the following consensus: Extract:

1. We express deep concern over the unprecedented, immediate and consequent challenges posed by the global spread of the COVID-19 pandemic to people around the world, especially its major impact on the lives and health of the African people.

We recognize the importance of public health issues to global peace and security and the well-being of people around the world, particularly the fact that Africa is extremely vulnerable to the ravages of this virus and needs solidarity and support, including resources from various parties to bolster its response to the pandemic and to support its economic and social development.

We commend and support the UN Secretary-General's call for a united response to COVID-19, and commit to jointly safeguard global public health security, protect the legitimate rights and interests of developing countries, make greater contribution to world peace and development, and build a community of health for all.

We underscore the close relationship between peace, security and development, call on the international community to support Africa in implementing its "Silencing the Guns" campaign and urge for an early lifting of economic sanctions on the Republics of Zimbabwe and Sudan.

In accordance with the FOCAC spirit and long-term values cherished by both sides, we remain committed to extending mutual support on issues regarding each other's core interests and major concerns. China supports African countries in exploring development paths suited to their national conditions and opposes interference in Africa's internal affairs by external forces. The African side supports China's position on Taiwan and Hong Kong, and supports China's efforts to safeguard national security in Hong Kong in accordance with law.

2. We highly commend and actively support WHO's role, under the stewardship of Director-General Dr. Tedros, in leading and coordinating the global response to COVID-19, and call on the international community to scale up political and financial support for the WHO.

We welcome the 73rd World Health Assembly (WHA) resolution on COVID-19 response, which expresses deep concerns about the negative impacts and consequences of the COVID-19 pandemic, emphasizes the importance of global collaboration, and calls for intensified international cooperation, unity, solidarity and joint efforts to contain and mitigate the pandemic, and to pay particular attention to the needs of people in vulnerable situations. We reiterate opposition to the politicization and stigmatization of the virus, and call on the international community to jointly prevent discrimination and stigma, reject misinformation and disinformation, and strengthen cooperation on the research and development of diagnostics, therapeutics, medicines and vaccines and the identification of the zoonotic source of the virus.

We support the initiation, at the earliest appropriate moment and in consultation with WHO Member States, of a stepwise process of impartial, independent and comprehensive evaluation, including using existing mechanisms as appropriate, to review experience gained and lessons learned from the WHO-coordinated international health response to COVID-19 after the virus is brought under control worldwide, in an objective, impartial science-based and professional manner.

We further commend the UN Secretary-General for his leadership and support for the WHO and related health initiatives during this pandemic, which aims at making vaccines, diagnostics and therapeutics for COVID-19 accessible worldwide. (tralac)

Key Words: Africa, COVID-19, China

Xi Jinping's speech at Extraordinary China-Africa Summit on Solidarity against COVID-19 – Extract: COVID-19 is still affecting many parts of the world. Both China and Africa face the formidable task of combating the virus while stabilizing the economy and protecting people's livelihoods. We must always put our people and their lives front and center. We must mobilize necessary resources, stick together in collaboration, and do whatever it takes to protect people's lives and health and minimize the fallout of COVID-19.

First, we must stay committed to fighting COVID-19 together. China will continue to do whatever it can to support Africa's response to COVID-19. China will lose no time in following through on the measures I announced at the opening of the World Health Assembly, and continue to help African countries by providing supplies, sending expert teams, and facilitating Africa's procurement of medical supplies in China. China will start ahead of schedule the construction of the Africa CDC headquarters this year. China will work with Africa to fully deliver the health care initiative adopted at the FOCAC Beijing Summit, and speed up the construction of China-Africa Friendship Hospitals and the cooperation between paired-up Chinese and African hospitals. Together, we will build a China-Africa community of health for all. We pledge that once the development and deployment of COVID-19 vaccine is completed in China, African countries will be among the first to benefit.

Second, we must stay committed to enhancing China-Africa cooperation. To cushion the impact of COVID-19, it is important to strengthen Belt and Road cooperation and accelerate the follow-ups to the FOCAC Beijing Summit. Greater priority needs to be given to cooperation on public health, economic reopening, and people's livelihood.

Within the FOCAC framework, China will cancel the debt of relevant African countries in the form of interest-free government loans that are due to mature by the end of 2020. For those African countries that are hardest hit by the coronavirus and are under heavy financial stress, China will work with the global community to give them greater support, by such means as further extending the period of debt suspension, to help them tide over the current difficulty. We encourage Chinese financial institutions to respond to the G20's Debt Service Suspension Initiative (DSSI) and to hold friendly consultations with African countries according to market principles to work out arrangements for commercial loans with sovereign guarantees. China will work with other members of the G20 to implement the DSSI and, on that basis, urge the G20 to extend debt service suspension still further for countries concerned, including those in Africa.

China hopes that the international community, especially developed countries and multilateral financial institutions, will act more forcefully on debt relief and suspension for Africa. China will work with the UN, WHO and other partners to assist Africa's response to COVID-19, and do it in a way that respects the will of Africa.

To help Africa achieve sustainable development is what matters in the long run. China supports Africa in its effort to develop the African Continental Free Trade Area and to enhance connectivity and strengthen industrial and supply chains. China will explore broader cooperation with Africa in such new business forms as digital economy, smart city, clean energy, and 5G to boost Africa's development and revitalization.

Third, we must stay committed to upholding multilateralism. In the face of COVID-19, solidarity and cooperation is our most powerful weapon. China will work with Africa to uphold the UN-centered global governance system and support WHO in making greater contribution to the global COVID-19 response. We oppose politicization and stigmatization of COVID-19, and we oppose racial discrimination and ideological bias. We stand firm for equity and justice in the world.

Fourth, we must stay committed to taking China-Africa friendship forward. The world is undergoing profound changes unseen in a century. Given the new opportunities and challenges we face, closer cooperation between China and Africa is needed, more than ever. On my part, I will stay in close touch with all of you, my colleagues, to consolidate our friendship and mutual trust, support each other on issues involving our respective core interests, and advance the fundamental interests of China and Africa and, for that matter, of all developing countries. This way, we will be able to take the China-Africa comprehensive strategic and cooperative partnership to a greater height.  (CGTN)

Key Words: Africa, COVID-19, China

Africa Business in Brief - ISSUE 354 ENSafrica -  A non-exhaustive list of recent measures aimed at curbing the spread of coronavirus (COVID-19)

Angola: The government declared a 15-day State of Public Calamity, from 26 May, which maintained travel restrictions into and out of Luanda province. The State of Calamity replaces a State of Emergency, relaxing various COVID-19 preventative restrictions. Source: IHS Markit

Cabo Verde: The Government adopted a motion for a resolution on the second amendment of Resolution No. 97/2017 of 22 August by resolution No. 32/2020 of 24 February, which establishes the Programme to Promote Micro-Entrepreneurship, taking into account the effects of the COVID-19 crisis on the economy. Source: Government of Cabo Verde

DRC: Prime Minister, Sylvestre Ilunga Ilunkamba, announced government's plan to set up COVID-19 laboratories in provinces affected by the pandemic. Source: IHS Markit

Equatorial Guinea: The Senate Plenary met on 20 May to adopt and approve submission for the next stage of Equatorial Guinea's proposal to join the World Customs Organization. Source: Government of Equatorial Guinea

Ethiopia: Finland has approved an additional extension of the CoWASH III project in support of Ethiopia’s COVID-19 emergency response. The extension, to run until the end of 2020 at a cost of USD2.67-million, is intended to contribute to COVID-19 emergency response activities in 45 woredas. Source: Fana Broadcasting Corporate

Kenya: Freight charges at the Jomo Kenyatta International Airport (JKIA) have come down by almost half due to increased capacity of airlines amid declining demand for cargo, giving exporters a huge boost. JKIA has witnessed a sharp growth in capacity over the last one month, with the number of cargo airlines now standing at almost 12 from a low of three when the COVID-19 outbreak struck, pushing the cost of freight down to KES236 for a kilo from KES525 for the same quantity previously. Source: Business Daily

Kenya: Private sector players, banks and analysts expect Kenya’s inflation to remain within the preferred Central Bank of Kenya (CBK) range for the rest of the year, with weaker demand and lower oil prices helping mitigate any COVID-19-related price increases. Inflation stood at 5.62% in April, up from 5.51% in March. The CBK’s preferred range is 5% plus or minus 2.5 percentage points. Source: Business Daily

Kenya: The Central Bank of Kenya (CBK) has reached out to four international lenders in its effort to craft a credit guarantee scheme to help small and medium enterprises (SMEs) survive the COVID-19 crisis. The institutions involved in the credit guarantee scheme include the World Bank, International Finance Corporation, European Investment Bank and the African Development Bank. The four international financiers are expected to provide technical expertise and may contribute funds on top of the KES3-billion seed capital that the National Treasury has set aside to cushion banks that lend directly to SMEs. Source: Business Daily

Malawi: The World Bank has tipped Malawi and other developing countries to improve on transparency if they are to build confidence among potential Foreign Direct Investors. The Bretton Woods’ institution says a stable investment climate is also crucial to woo investors. The suggestions are contained in a recent news release by the Bank where it has also committed to support 100 countries in their response to COVID-19. The Bank has pledged USD160-billion in grants and financial support over a 15-month period to help developing countries respond to the health, social and economic impacts of COVID-19. Source: The Times Group

Namibia: The negative impact of the COVID-19 pandemic on the Namibian economy, combined with the rigidities of the Namibian economy and the government’s budgetary position, underlined Moody’s change in Namibia’s credit risk ratings’ outlook to Negative. Moody’s expects Namibia’s GDP to contract by 7% in 2020. Subdued global commodity prices and COVID-19 lockdown measures are expected to curtail mining production and exports during 2020, while tourism proceeds, contributing around 12% of GDP, are also expected to trail down as a result of the cessation of international travel. The weak growth combined with health-related spending on the COVID-19 virus outbreak are expected to widen the fiscal deficit to an estimated 10% of GDP in 2020, moderating only slowly to 8.5% of GDP in 2021. Source: IHS Markit

Nigeria: Rivers State government has cancelled its former decision to resume lockdown of the capital city, comprising Obio/Akpor and Port Harcourt local government areas, as part of its strategy to contain the spread of the COVID-19 pandemic. The governor imposed an 8pm to 6am curfew in the 23 local government areas of the state from 2 June until further notice. He said “all land borders, including all exit and entry routes into Rivers State shall remain closed to human and vehicular traffic, except those on essential services and duly exempted”. Source: The Nation

Rwanda: The government of Rwanda announced on 21 May, the disbursement of USD152-million to support the national airline – Rwandair – in this pandemic. Up by USD17-million from the initial plan, this financing should enable the company to sustain its cash flow, which has sharply declined since the suspension of scheduled flights on 19 March due to travel restrictions. Source: Ecofin Agency

Rwanda: The waiver of fees on all mobile financial transactions by telecoms during the COVID-19 lockdown has led to fast growth in the value and number of mobile money transactions in Rwanda. Data compiled by resource centre insight2impact, and released by open forum for development NextBillion, indicates that the money transacted grew from RWF10.7billon (USD11-million) on 15 March, when the lockdown began, to RWF24billion (USD25.6-million) just a week later. The number of mobile money transactions has since grown exponentially, hitting RWF40.3billion (USD43-million) by 19 April, a 485% growth in value from 16 February, and 397% growth in transactions. The National Bank of Rwanda instructed mobile network operators to waive charges on all transfers with bank wallets, person-to-person and merchant fees on payments. Source: Rwanda Today

Uganda: President Yoweri Museveni launched a certified surgical mask factory in Mukono. The President also noted that money has been injected into the Uganda Development Bank to support manufacturers with low-interest loans in order to enhance production. So far, five companies have been certified by the Uganda National Bureau of Standards (UNBS), to produce masks for both local use and export. Source: New Vision

African Natural Resources Centre unveils publication to advance critical land policy reforms: In response to challenges across Africa around land ownership and use, the African Natural Resources Centre (ANRC) of the African Development Bank is launching a series of articles to aid policy debate. The articles are authored by influential international scholars whose pioneering research and analysis have helped to direct policy on land reform in Africa for more than two decades. The actions are expected to inject a new urgency into the need for land reform. The publication, Rethinking land reform in Africa: New ideas, Opportunities And Challenges, follows last November’s Conference on Land Policy in Africa, organised by the ANRC in Abidjan, and the 10th anniversary of the African Union Declaration on Land. The initiative is expected to inspire a breakthrough in land reform policy. Since independence, African governments have struggled to implement successful land policies. There is considerable scope to adopt new policies at a continental level that would allow an inclusive balance between customary and new approaches to ownership and use that fosters greater investment in agriculture. Source: Africa Business Communities. (Lexology)

Key Words: Africa, Business, COVID-19

NORTH AFRICA

Government will work to improve investment climate - The government will work to improve the investment climate and simplify administrative procedures through digitisation and acceleration of procedures, said Prime Minister Elyes Fakhfakh. Speaking at a meeting Wednesday with a delegation of representatives of foreign companies established in Tunisia, he added that the government will also seek to improve the infrastructure, in order to develop the transparency index and strengthen confidence between economic actors in Tunisia. Fakhfakh recalled that the government is preparing to announce and launch the implementation of the economic rescue plan as part of managing the economic and social repercussions after the COVID-19 crisis and ensuring economic recovery and the launch of major reforms. The meeting discussed proposals and opportunities to boost business productivity, the pace of investment and preservation of jobs. It provided an opportunity to review the concerns of investors in the main economic sectors to emerge from the COVID-19 pandemic crisis and limit its impact on Tunisian and foreign companies. (TAP)

Key Words: North Africa, Investment Policy, COVID-19

EAST AFRICA

How has the COVID-19 pandemic impacted Ugandan businesses? Results from a business climate survey – The Corona Virus Disease-2019 (COVID-19) has continued to spread across the world leaving death and economic devastation in its wake. Although the number of confirmed cases in Uganda remain very low in comparison to other countries, the containment adopted to curb the spread of the virus have affected business operations. This report, based on a survey of firms using the Economic Policy Research Centre (EPRC)’s business climate index (BCI) methodology, examines the effect of the risk presented by COVID-19 pandemic on Uganda’s businesses.

The results indicate that small and medium businesses have experienced the largest effects of the risk associated with COVID-19 compared to large scale businesses. The decline in small and medium businesses is due to inability to cope containment measures instituted by government. Specifically, nine out of ten businesses report experiencing an increase in operating expenses due to preventive measures instituted by government to curb the spread of the virus. Agriculture enterprises have been worst hit due to challenges of accessing inputs arising from transport restrictions and the ban on weekly markets. In addition, prices of agricultural outputs have declined due to lost demand and the shift from consumption of fresh agricultural produce to dry rations.

With respect to the future outlook, the major concerns highlighted by businesses—in the event that the COVID-19 situation persists for more than six months—relate to reduced product demand and potential inability to meet costs of operations. In particular, majority of micro and small businesses indicate that they would exit business in 1 to 3 months in the event the current situation persist. On the other hand, majority of the medium and large firms do not foresee closure. Furthermore, there is a slightly higher resilience among agriculture and manufacturing firms compared to service sector firms. Finally, the report projects that in the event that COVID-19 persists for the next six month, about 3.8 million workers would lose their jobs temporarily while 0.6 million would lose their employment permanently. Over 75 percent of employees projected to lose their jobs permanently are from the service sector and mainly from Kampala. (EPRC)

Key Words: East Africa, COVID-19, Trade

World Bank Provides Additional Support to Help Ethiopia Mitigate the Economic Impacts of COVID-19 – The World Bank’s Board of Executive Directors today approved $250 million ($125 million grant and $125 million credit) in supplemental financing for the ongoing Second Ethiopia Growth and Competitiveness Programmatic Development Policy Financing. This funding is geared towards helping Ethiopia to revitalize the economy by broadening the role of the private sector and attaining a more sustainable development path.

“The COVID 19 pandemic is expected to severely impact Ethiopia’s economy. The austerity of the required containment measures, along with disruptions to air travel and the collapse in international demand for goods exported by Ethiopia are already taking a toll on the economy,” said Carolyn Turk, World Bank Country Director for Ethiopia, Sudan, South Sudan and Eritrea. “Additionally, an estimated 1.8 million jobs are at risk, and the incomes and livelihoods of several million informal workers, self-employed individuals and farmers are expected to be affected.” The supplemental financing will help to mitigate the impact of the ongoing COVID-19 crisis on the Government’s reform agenda. Specifically, the program is intended to help address some of the unanticipated financing needs the Government of Ethiopia is facing due to the COVID-19 crisis. Additional financing needs are estimated to be approximately $1.5 billion, as revenue collection is expected to weaken, and additional expenditure is needed to mitigate the public health and economic impacts of the crisis.

“This additional financing to the Second Growth and Competitiveness Programmatic Development Policy Financing, approved in March 2020, will support the continued implementation of the structural reforms towards private-sector-led development under the Homegrown Reform Agenda,” said Miguel Eduardo Sanchez Martin, World Bank Task Team Leader for the Operation.

The financing will complement the government of Ethiopia’s ongoing efforts to mobilize financial assistance for crisis response. The operation is one of the pillars of the World Bank’s immediate response to mitigate the impact of the global crisis on Ethiopia. In April, the World Bank had already provided $82.6 million for Ethiopia COVID-19 Emergency Response Investment Policy Financing under the Fast-Track COVID-19 Facility to prevent, detect, and respond to the threat posed by COVID-19 and to strengthen national systems for public health preparedness. (World Bank)

Key Words: East Africa, COVID-19, Trade

WEST AFRICA

Nigeria and Other African Countries Should Go Digital to Boost Trade— Speaking with Arise News Network, Dr. Ngozi Okonjo-Iweala, the chair of GAVI, The Vaccine Alliance, an organisation at the centre of development and distribution of vaccines, and who is also vying for the position of World Trade Organisation director general, argues that vaccine is the most sustainable solution to the scourge as she also gives the recipe for a robust intra-African trade. Besides, the two-time Nigeria’s finance minister and former World Bank managing director, in this interview, monitored by THISDAY, cautions Nigeria and other African countries on debt, advising them against taking loans they can’t service. Kunle Aderinokun presents the excerpts:

Q: You have highlighted what African countries are doing to respond to this pandemic in financial terms, but beyond the debt, which a lot of African countries are struggling with, what worries you the most about African economy?

A: I think what worries me the most, but also gives me much hope is the issue of employment. We have a very young population; in most of our countries 60 per cent of the population is 35 years and below, that means, jobs is the key. So, what do we do with our youth? In our economy, we have to look at every opportunity of creating job and in the post-pandemic, we have the chance to really re-look at the way our development is going, we have a chance to look at some supply chains that we can bring back on the continent and improve our manufacturing base. We have the African continental free trade agreement, may be some of our countries can specialise in manufacturing certain things which it can trade with neighbours. You know we import 94 per cent of the pharmaceutical products we use on the continent! Why can’t some countries to specialise in the manufacture some of those products? Nigeria is one with a large population, South Africa is another; there are others with that capability. My worry is, how do we create good jobs for our young people? And how do we support our young entrepreneurs, so that they can create jobs for themselves and others? That is my biggest worry, but I can see a lot of opportunities in Africa and I have hope that we can do it.

Q: In line with the African 2063 vision, how can Nigeria and African countries truly optimize this intra-African trade?

A: I think we can launch the continental free trade agreement. It is supposed to be launched in the month of July, but because of the COVID-19 pandemic, maybe that will be postponed. I think we should do it as soon as possible. We should look to specialisation; if we all produce the same things, then trading with each other will not be as effective as it should be. We really need to step back and look at what are the things that countries can specialise in, maybe there are those who can do well in manufacturing textiles, in processing agricultural product of one type or the other and trading with the neighbours! I think this is the way we need to look at it.

How do we increase that trade? Another thing I want to mention is of course logistics, and I think that the African countries have been working well on this. How do we improve borders closures and remove all the checkpoints so that goods can move easily from one country to the other? So these are some of the things; we need to look at the remaining obstacles, we need to implement the trade, but above all, some countries need to specialise in producing one product or the other that we can trade with each other. This is of course a longer term dream and plan. We also need to go digital; technology is enabling a lot of trade and this is something else we need to look at. How can it facilitate increase trade within the continent? (This Day)

Key Words: West Africa, AfCFTA, Digital Economy

SOUTH AFRICA

South Africa’s April 2020 trade statistics - South Africa’s March 2020 trade data[1] showed that measures adopted by its global trade partners to curb the spread of COVID-19 mainly impacted South Africa’s imports. Main source markets were already, or were going into lockdown leading to an overall decline in imports, while exports remain largely unchanged. The import data started to show changes in the trade in medicines and medical equipment (see tralac Blog: South Africa’s trade for March 2020 – significant trade surplus shows the initial impact of COVID-19 on imports). The April 2020 trade data released by the South African Revenue Services (SARS) shows how South Africa’s lockdown and the demand for medical equipment are shaping South Africa’s pattern of trade with the rest of the world. As the pandemic spreads through the African continent, and more specifically, as countries adopted restrictive measures, the April 2020 data[2] also shows a change in South Africa’s trade with other African countries, especially as regards exports.

 For March 2020 South Africa had a trade surplus of US$1.5 billion; for April this changed to a deficit of US$1.9 billion, a deficit of US$1.6 billion more than the US$242 million trade deficit recorded for April 2019. South Africa recorded a trade deficit with most trade partners, except some African countries, the UK, Netherlands, Vietnam and the UAE.

The trade deficit can be attributed mainly to a significant decline in total exports – in comparison with March 2020 and April 2019 exports more than halved. Exports to all but a handful of countries declined; the exceptions are some countries in Asia and the Middle East – Vietnam (coal and iron ores), Saudi Arabia (lemons, hydrocarbons and phosphoric acid), Thailand (hydrocarbons and chemical wood pulp), Turkey (aluminium and non-alloy pig iron), Iraq (lemons) and Qatar (lemons, lamb, beef, pears, apples and vegetables). Comparing April 2019 and March 2020 world exports with the April 2020 data shows traditional exports (coal, iron ores, platinum and ferro-chromium) decreased by between 25% and 50%. Exports of rhodium (to UK, Japan and Korea), lemons, hydrocarbons and sugar in solid form (to Malaysia and China) increased significantly.

South Africa’s overall intra-Africa exports more than halved between March and April 2020, but intra-Africa exports of crude soya bean oil and sugar in solid form each doubled and exports of disinfectants increased by US$4.4 million. South Africa’s intra-Africa exports of staples (maize, wheat, oilcake, animal feed and fertilisers) and cleaning materials (disinfectants, soaps and surface-active preparations) in April 2020 were significantly higher than exports in April 2019, while exports of medicines declined due to export control measures put in place by South Africa. Furthermore, South Africa also increased exports to some east and west African countries – Ethiopia (maize seed and herbicides), Djibouti (coal), Togo (polyethylene), Burundi (printed books and brochures) and Libya (adhesive dressings). (tralac)

Key Words: South Africa, Trade, Export Sector

Opening Remarks by President Cyril Ramaphosa at the virtual extraordinary China-Africa Summit on Solidarity Against COVID-19 – Extract: This pandemic is not only a threat to health but has a profound bearing on many other areas of global activity, including trade, debt, financial flows, security, migration and action to deal with climate change.This pandemic demands solidarity, global cooperation and collaboration. We need to strengthen the multilateral system and support the international institutions that must guide our response to this crisis.  This Extraordinary China-Africa Solidarity Summit against COVID-19 demonstrates the depth and resilience of solidarity between China and Africa.

Allow me to express the gratitude of the people of Africa to President Xi and the government and people of China for their generous donation of personal protective equipment and other medical assistance that has been provided to our continent. I wish to thank President Xi for the fruitful discussions we have had during the course of this pandemic and his willingness to engage on the issues that African countries face. As the countries of Africa, we have acted decisively and in unison to respond to the threat of COVID-19. Currently, Africa has over 250,000 confirmed infections and more than 6,700 deaths. Although the number of infections in Africa is currently lower than elsewhere in the world, there is an expectation that the worst is still to come, with dire social and economic consequences. We have an urgent need for medical supplies, testing equipment and facilities to isolate and quarantine people, laboratories, personal protection equipment and ventilators.

We are therefore launching the Africa Medical Supplies Platform, which is a ground-breaking marketplace to enable all African governments to access critical supplies. As things stand, however, many African countries are having to purchase goods with resources largely obtained from the multilateral agencies. We would like to ask China to consider support for the provision of diagnostic and therapeutic supplies over a period of six months. This support would be managed by AfriExImBank in collaboration with its counterpart in China. This would allow several African countries to procure goods from China. As the AU we have established an African COVID-19 Response Fund as a key intervention to mobilise and direct resources towards the continent’s response to the challenge.  The economic global downturn has dealt a severe blow to the African continent as it has the rest of the world.

The AU has been in the forefront of mobilising international support for a comprehensive economic stimulus package for Africa.   We have called for debt relief for African countries that are indebted, including a two-year debt standstill and a plan for the restructuring of both private and bilateral debt.  To provide additional liquidity to shore up the private sector, Africa has called for the international community to avail some unused Special Drawing Rights of about $100 billion for Africa.  We urge China to support and contribute to this call, or to propose alternative options that can be considered on an urgent basis to help support the private sector. Although the COVID-19 pandemic will pass, its consequences for people, economies and our planet will be with us for a long time to come.  We must therefore embark on a strategic effort to rebuild social and economic systems and restore the confidence of citizens. (The Presidency Republic of South Africa)

Key Words: Africa, Economy, COVID-19