CEO Insights – Africa’s Responses to COVID-19

Africa has done well in keeping the number of COVID-19 cases to a record low. The continent’s first COVID-19 case was reported on 14 February in Egypt, and the first case recorded in sub-Saharan Africa was on 27 February, in Nigeria. By 13 May, the disease had reached all African countries, the last being Lesotho, and the spread seems to continue to escalate. As of 1 June, there have been more than 152,000 cases and more than 4,300 deaths. The continent’s daily new cases reached over 3,700 on 31 May, and seem to continue increasing. South Africa, Egypt, and Nigeria are among the countries facing the highest number of infected. Still, the cumulative number of cases in Africa is the lowest across all continents, except Oceania.[1] However, it’s too soon to affirm the low reported cases and deaths as being evidence of Africa’s better resistance to and management of the virus, or whether it is the result of under-reporting of cases and/or a lack of testing capacity.

A delayed introduction of the virus to the continent gave countries time to prepare, and those countries that responded quickly have seen positive developments. A case in point is Mauritius, where our firm, International Economics Consulting Ltd., is headquartered. Mauritius reported its first active case on 18 March. However, the Government of Mauritius (GoM) did not wait until then to act. Precautionary measures, including screening of passengers at the airport, sending the suspected infected cases to quarantine, and banning entry of foreigners from high-risk countries, have been in place since 23 January. A strict 14-day nation-wide lockdown was announced just 2 days after the first case appeared and was further extended twice until 1 June. The country also managed to conduct a total of 117,153 tests (9 percent of the population) as of 31 May.[2] According to Assessment Capacities Project (ACAPS),[3] Mauritius adopted 30 social and/or medical measures, either newly introduced or an extension thereof, spanning over categories such as lockdown, restrictions in personal movement, economic, social distancing to public health measures (Figure 1). While the containment measures were extreme, within a month, new cases stopped. Unfortunately, whilst ten people of the 333 cases reported died, all remaining active cases fell to zero. Some returning Mauritians arrived home in May and were placed in quarantine. At the end of May, three new cases were reported in quarantine.

Figure 1 Timelines of government responses to COVID-19 in selected African countries

Source: IEC based on ACAPS (2020)

Fear of critical product shortage has triggered panic responses from many countries. Allowed by general exceptions of the World Trade Organisation (WTO) multilateral agreements, many economies have opted for trade-restrictive measures. As of today, 286 measures have been adopted by 132 countries and territories around the world, more than half of which are trade-restrictive, targeting essential medical supplies and foodstuffs. However, there have also been more and more measures aimed at liberalising trade, such as suspension or waiver of import duties and VAT for selected critical products during the pandemic. [4]

Most African countries are net importers of COVID-19 crisis essential goods (i.e. medical supplies and foodstuffs), and thus are exposed to the risks of trade-restrictive measures imposed by exporting countries. In the Indian Ocean, countries have reported difficulties accessing medical supplies on their own due to the current crisis. As for Mauritius, the country records a high concentration of imports, with the import share from the top-3 exporters representing 60 percent and 68 percent, respectively of critical and non-critical medical products imported by Mauritius, according to the latest World Bank data.[5] Concentration for food imports is even higher, with the share from the top-3 exporters at 82.9 percent. Most of Mauritius’ top trading partners, such as India and China, have been adopting export restrictions, either effectively banning or putting license requirements on exports of certain essential products. The direct effects of those trade-restrictive measures on price might be up to 4.9 percent, according to World Bank estimations.[6]

While the infection rates continue growing, African countries must look into opportunities to limit the COVID-related economic downturn. According to a recent survey that IEC conducted jointly with the United Nations Economic Commission for Africa (UNESCAP), most African businesses have only been operating at 50-60 percent of capacity in the case of large enterprises, and only 30-40 percent in smaller firms. Longer hibernation of business activities will put SMEs, in particular, at risk of bankruptcy and closure. Lack of operational cash flows, the drop in demand, and the reduction of opportunities to meet new customers are the main challenges faced by African businesses.[7] Besides economic stimulus packages, governments’ efforts in streamlining trade procedures, facilitating trade at borders, and maintaining transport and logistics services along the main corridors will be essential to keep the continuous flow of goods and services, thus ensuring economic continuity and recovery.[8] E-commerce should also be seen as a gateway for crisis mitigation. While a fully-functioning e-commerce ecosystem takes years of investment to develop, a plethora of practical short-term measures has been recommended for immediate implementation.[9]

Although the majority of African countries have limited resources to fight the disease, strength will be multiplied by joining forces in coordinated measures to better respond to the crisis. Started as an economic integration initiative, the African Continental Free Trade Area (AfCFTA) and other regional integration efforts, among various other coordinated policies, is expected to help pull countries out of recession after the pandemic is over.[10]

At the regional level, the Regional Multidisciplinary Centre of Excellence (RMCE) and the World Bank have partnered in the “Targeted Support for COVID-19 Recovery in Indian Ocean Countries (IOC) and Accelerated Programme for Economic Integration (APEI) Countries through Trade” project.[11] This initiative, which is being coordinated and implemented by International Economics Consulting Ltd., is a collaborative effort to promote regional cooperation solutions for both the private and public sectors in the COVID-19 recovery effort via cooperated trade solutions across eight countries belonging to the IOC and APEI. [12] The channels for promoting regional trade in COVID-19 products include, offering peer learning and support at the government and private sector levels, and linking production in the region to procurement of Personal Protective Equipment (PPE), COVID-19 testing and other medical supplies.

At International Economics Consulting Ltd. (IEC), we work to help our Clients understand the impact of COVID-19 on Africa at multiple levels. IEC is delighted to coordinate and support the implementation of the RMCE and World Bank targeted support across eight African countries. Through our COVID-19 response platform, we monitor the development of COVID-19 and its economic impact on Africa. Our team of data scientists and economists have worked together to create live dashboards and risk exposure indicators that will enable users to identify, understand and make critical decisions to ensure their company’s survival and success in such a turbulent environment. We are also working with firms in understanding the opportunities for new markets and niche products in light of this “new normal”.

 

[1] Of all Oceania countries, only Australia, New Zealand, French Polynesia, New Caledonia, Fiji, Papua New Guinea and Easter Island have confirmed cases, while ten sovereign states (i.e Kiribati, Marshall Islands, Federated State of Micronesia, Nauru, Palau, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu) have yet to report any case.

[2] Government of Mauritius (2020). Covid-19 Statistics – Sunday 31st May 2020. [https://besafemoris.mu/general_news/covid-19-statistics-friday-29th-may-2020-2/]

[3] COVID-19 Government Measures Dataset at https://data.humdata.org/dataset/acaps-covid19-government-measures-dataset

[4] ITC Market Access Map (2020). COVID-19 Temporary Trade Measures. [https://www.macmap.org/covid19]

[5] Espitia, Alvaro, Nadia Rocha and Michele Ruta (2020). “Database on COVID-19 trade flows and policies”. World Bank.

[6] Espitia et al (2020), ibid.

[7] ECA & IEC (2020). Insights on African businesses’ reaction and outlook to COVID-19’s. IEC: Mauritius & ECA: Addis Ababa. 30 April [https://tradeanalytics.app/insight/2020/04/insights-on-businesses-reactions-and-outlook-to-covid-19-in-africa]

[8] Paul Brenton and Vicky Chemutai (2020). Trade and COVID-19 Guidance Note. Trade responses to the COVID-19 crisis in Africa. World Bank, 06 April 2020. [http://documents.worldbank.org/curated/en/370831586274809825/pdf/Trade-Responses-to-the-COVID-19-Crisis-in-Africa.pdf]

[9] Christoph Ungerer, Alberto Portugal, Martin Molinuevo and Natasha Rovo (2020). Recommendations to Leverage E-Commerce During the COVID-19 Crisis. World Bank, 12 May 2020 [http://documents.worldbank.org/curated/en/280651589394091402/pdf/Recommendations-to-Leverage-E-Commerce-During-the-COVID-19-Crisis.pdf]

[10] Paul Brenton and Vicky Chemutai (2020), ibid.

[11] The project covers Comoros, Madagascar, Malawi, Mauritius, Mozambique, Reunion, Seychelles, and Zambia.

[12] Paul Baker, Prakash Hurry, Ali Mansoor and Erik von Uexkull (2020). The World Bank and the Regional Multidisciplinary Centre of Excellence launch joint project aimed at supporting IOC and APEI countries for COVID-19 recovery. IEC and RMCE. 20 May [https://tradeanalytics.app/insight/2020/05/the-world-bank-and-the-regional-multidisciplinary-centre-of-excellence-launch-joint-project-aimed-at-supporting-ioc-and-apei-countries-for-covid-19-recovery]

Related News

Mauritius’ Financial Crimes Commission Act 2023

Publications

Mauritius and the AfCFTA Part 4: The Appeals Process in D...

IEC in the News

WWL Global Elite Thought Leader 2024

IEC in the News

An Investigation of Developing a 3D Printing Industry thr...

Publications

Trade and Investment Opportunities in Information and Com...

News

A Retrospective on the Events that shaped International T...

CEO insights