We wanted to share some of the interesting articles we've read recently on the impact of COVID-19 on East Africa.
- Economic impact: with tourism set to take a severe hit (e.g. hotels in Zanzibar are now closed) and key commodities selling at low prices (cotton -21%; coffee -12%), there’s some concern about how Tanzania will earn foreign exchange this year. Having said that – the shilling remains stable: the country has enough reserves to cover 6 months of imports and the price of gold - another major export - is up 7.6%.
- Government response: the government is yet to announce any fiscal or monetary measures. Despite high public spending linked to this year’s election, the IMF still considers Tanzania to be at a low risk of debt distress.
- Donor response: Jack Ma has donated 100K masks and 20K testing kits and regional/domestic banks and SMEs have contributed considerable sums to aid Tanzania’s response.
Swift and stringent lockdowns appear to have rapidly flattened the curve of new infections in many countries. So, why has Africa’s response been relatively well co-ordinated?
- The stewardship of The Africa Centres for Disease Control & Prevention has been instrumental. Africa CDC is now leading a continent-wide contact tracing and testing mission, enlisting 1M healthcare workers.
- The continent’s prior experiences with Ebola & AIDS mean certain protocols are now in place.
- The early warning Africa had as the virus spread in China & Europe allowed for solid preparations (e.g. South Africa locked down before the country suffered a single death).
- There are innovative approaches to disseminating healthcare information (e.g. Sierra Leone has depended on "Mammy Queens", religious figures, radio jingles and boom-box-carrying “town criers” to disseminate key messages).
As well as highlighting the disruption to formal and informal trade within the bloc and globally, we were interested to read the Council’s three medium & long-term demands which include:
- Encouraging EAC members to improve the business and regulatory environment
- Encouraging EAC members to embrace Buy East Africa Build East Africa (BEABEA)
- Encouraging EAC members to specifically expand the production capacity of their private manufacturing sectors
Curious to hear from others on what COVID-19 might mean for regional value chains & manufacturing over the long-term – will EAC members seek to integrate further to help aid their economic recovery and insulate themselves from global shocks? Might there be an opportunity to encourage governments to play a more active role in supporting new industries and the private sector?