The novel coronavirus, recently named Covid-19, has virtually shut down China where it started in the world’s second biggest economy. While the situation is improving in the vast country, it has caused upheaval in stock markets and disrupting supply chains around the world. Factories have been closed, events cancelled and flights grounded around the world. China-bound airlines from East Africa – RwandaAir, Kenya Airways – have ceased their flights to the country. Tanzania has had to postpone its maiden flight there. Airlines have been hit hard. The New York Times quotes a trade group saying the virus could wipe out up to $113 billion in worldwide revenues this year. African airlines could suffer a big chunk of that. Kenya Airways has already reported a loss of $8 million. Elsewhere, the economic impact of Covid-19 is already causing havoc with the disruption of supply of goods from China. Up to seven countries in the larger Eastern Africa use the port to import their goods from the country – Kenya, Uganda, South Sudan, Rwanda and parts of Tanzania, Ethiopia and the Democratic Republic of Congo. The goods they import include consumables, electronics, vehicle spare parts, construction materials and other raw materials, clothing, furniture, kitchenware and machinery. These have now stopped. The four cargo ships that supply the goods have failed to dock at Mombasa port since January following the coronavirus outbreak. That is two months now, amounting to eight failed shipments. This has predictably raised concerns of a possible surge in prices of consumer goods in the region. The failed shipments have taken a toll on the cost of inputs for companies. The Purchasers Managers Index (PMI) by Stanbic Bank and IHS Markit last month reports a drop in business activity that has led to a reduction of new orders. Stanbic Bank East Africa Regional Economist Jibran Qureishi is quoted confirming firms have faced a shortage of raw materials owing to reduced imports from China due to the virus outbreak. “This has increased output prices as alternative import markets aren’t as cheap as China.” In the meantime, the UK-based think tank, Overseas Development Institute (ODI), shows the East Africa Community as significantly at risk. Countries in the region - Kenya, Tanzania, Rwanda, Burundi and Uganda – are among the world’s 97 economies that are most exposed to a Chinese slowdown either directly or indirectly. The study shows that sub-Saharan Africa faces losses in exports of goods worth $4 billion and $600 million in tourism exports due to coronavirus. Other African countries most exposed to Covid-16 disruption include Sierra Leone, Congo, Angola, Zambia and Lesotho. Things are projected to get worse, and as the WHO Director General, Tedros Adhanom Ghebreyesus, warns, some countries are not facing up to the reality of the threat posed by the virus. “This is not a drill,” he cautions. “This is not the time for giving up. This is not a time for excuses. This is a time for pulling out all the stops.” The WHO also warns that prices of protective equipment, such as surgical masks and gloves, are soaring due to a global shortage, and asked companies and governments to increase production by 40 per cent. There’s no telling what impact it will have in Africa. And, if you see a rich country like the United States struggling, it could get worse in the continent where systems are weak. The World Bank has committed $12 billion as an emergency package to help developing countries improve their public health response to the crisis, as well as work with the private sector to reduce the economic impact. The organisation says it would prioritise the poorest and most at-risk countries in distributing the aid to counter the effects of the virus, which has spread to more than 85 countries and territories around the world. Countries with weak health systems, limited financial resources and close economic links with China are said to be most vulnerable to the coronavirus outbreak. Authorities have confirmed more than 97,000 cases of the virus worldwide as of yesterday (Friday), with infections in at least 85 countries and territories. Africa has the least number of cases and as of yesterday had 29 confirmed cases in seven countries - Algeria (17 cases), Senegal (4), Egypt (3), Morocco (2), Nigeria (1), South Africa (1) and Tunisia (1). Experts note that and it is possible that there are people in Africa who have the virus but have simply not yet been detected. The novel coronavirus has killed more than 3,300 people, the vast majority in mainland China The views expressed in this article are of the author.
