Trading within the African Continental Free Trade Area (AfCFTA) is set to begin on 1st July 2020, just over two months from now. So far, only 29 member states out of 55 have ratified the agreement. More countries need to ratify it if the projected boost of 52 per cent in intra-African trade should be attained by 2022. However, Covid-19 could slow things down a bit. While the full effects of the virus remain to be seen, a gloomy economic picture is emerging that AfCFTA will have to contend. There is a unity of expert opinion that the continent is about to go into recession because of the virus. The question is by exactly how much. One could start with the recent African Development Bank (AfDB) analysis entitled Impact of the coronavirus on the Africa economy. Before the onset of the pandemic, AfDB had projected the continent-wide gross domestic product (GDP) growth to reach 3.4 per cent this year. The GDP will now shrink in the negative to between -0.8 and -1.1 per cent in 2020. In sub-Saharan Africa, estimates by the World Bank are bleaker with a predicted economic contraction of between -2.1 and -5.1 per cent for 2020. The International Monetary Fund forecasts a dip of -1.6 per cent in the region south of the Sahara. Though a country like Rwanda will fare relatively better with a projected growth of 5.8 per cent, the average negative growth in the continent suggests the trading in AfCFTA will not start from a point of strength, if at all. Among the AfCFTA’s objectives is to stimulate production through the development of regional value chains, as well as ensuring that manufacturing, agro-processing and other activities across the continent are stimulated to supply the market. These will need jobs to deliver. But “nearly 20 million jobs, both in the formal and informal sectors, are threatened with destruction on the continent if the situation continues, the AfDB analysis says. Another objective of the continental free trade area is to strengthen the capacities of African companies to access and supply world markets. Effects of the virus have already compromised attainment of the objective. Now, exports and imports are projected to drop at least 35 per cent from 2019 levels, incurring loss in the value of trade of around $270 billion. This has had manufacturers worried. The East African Business Council (EABC) which lobbies for manufactures in the region, this week lamented the partial and complete freeze on movements, including the ban on public gatherings, which have forced them to temporarily close or operate below capacities. The lobby is appealing the EAC states to allow free movement of East Africans across the member states It, however, is not quite easy or practical at the moment. As experts are pointing out, focusing only on the economic challenges and not paying attention to the health issues could result in significantly higher economic costs. They explain that the virus infection is yet to reach its peak or flatten out in the region, while nobody knows when this will happen because the disease is still young in Africa. WHO Regional Director for Africa, Dr Matshidiso Moeti, was telling BBC yesterday (Friday) that indications are that it could get worse with the continent turning into the epicentre of the pandemic. It also could be for the long haul before a semblance of normalcy returns. The UN Secretary-General Antonio Guterres suggests that a vaccine may be the only tool that can return the world to a sense of normalcy, saving millions of lives and countless trillions of dollars. Other experts suggest that either the vaccine or sufficient natural immunity in the population is achieved for normalcy. Neither appears to come soon. Getting a vaccine will take at least 18 months according to some experts. No one can tell when natural immunity will be achieved. There are ongoing efforts to alleviate the situation in Africa, however. This week African and European Heads of State signed to the urgent need for economic stimulus package of at least $100bn to African countries. In the same vein, the Chairperson of the African Union, President Cyril Ramaphosa of South Africa has appointed Special Envoys to mobilise international support against effects of the pandemic.
