There will be a number of changes to African trade due to COVID-19, but it is acknowledged that at this stage there is a very high degree of uncertainty around scenarios.

  • Not just global supply chain disruptions, but changing demand: Supermarkets in the Global North are struggling with changing demand to domestic consumption rather than retail. This is likely to continue as long as there are lockdowns, and beyond. How does this affect tea and coffee consumption? Cocoa? Dried goods? Horticulture?
  • Supply chain disruptions: it is assumed that protocols can be put in place to manage COVID-19 transmission through supply chains, at some cost. But airfreight will be affected at the very least indirectly through collapsing airline business activity (some is delivered through passenger airlines, some relying on global air infrastructure). Shipping will depend on freight transport in-country and across borders. This is assumed to be manageable through prioritising key food supply sectors but may cause disruption in other sectors (e.g. supply of manufactured goods). Landlocked countries / regions such as Rwanda and Eastern DRC will be highly dependent on their neighbours policies and this will require integration.
    • Sectoral approach: This must be mapped by sector – e.g. horticulture vs non-perishable goods                                                         
  • Risk of higher than average impact in Sub-Saharan Africa: there are good reasons (very weak health systems, immuno-suppressed and undernourished populations) to anticipate a higher than average fatality rate in SSA and this could have higher levels of disruption in society and the economy.
  • Food security and nutrition: the argument for food reserves that has held back growth in food trade have just intensified.
    • How do large buyers (the Cargills) differ across borders compared to national traders? Are they more capable or more constrained relative to those who have primarily local / national markets
    • There is a real danger of a “beggar my neighbour” situation with the introduction of export bans on food crops
    • Reserves will presumably need to factor in a higher risk requirement – can this be done? We can’t assume it was adequate before COVID-19
  • The economic impact of a shutdown will be felt very keenly in countries reliant on remittances. And the tightening of immigration will affect the livelihood of tens of thousands of cross border traders and disrupt the economies of border communities.
  • Currency: significant risk of currency / forex challenges. Many exports work in dollars. Where there has been a collapse in forex availability, regional trade can operate in-kind by netting off sums between country operations.
  • Dependency on global norms: borders closing or international expectations of lockdowns may be beyond national government’s control. In this case each country will need to review its contingency planning
    • This must be mapped sector by sector not just through a border lens. Sectors and movements will however be dependent on bordering neighbours and their policies.
  • Development partners: assess what funding risk is present – it is already clear that programme work faces delay or cancelation. Each country and institution will need to review funding risk and implementation risk.
  • Debt cancellation: IMF is calling for a rescheduling of debt and possibly cancellation in the face of emergency response requirements. Does this really open a pipeline of funding for emergency response? How much of it was externalised anyway and is not actually recoverable by the country in question? Wealthier countries can print more money – this can’t be done the same way in SSA, in which case how can considerations like intensified social security efforts be supported?