Trade Responses to the COVID-19 Crisis in Africa

MAIN MESSAGES

• Countries in Africa should strive to maintain trade flows during the crisis to secure access to medical goods and services, and food and other essential items such as farm inputs. This requires keeping borders open to the largest extent possible and avoiding measures such as export bans or taxes.

• Countries should take action to reduce taxes and duties on trade, to streamline trade procedures and to support transport and logistics services in maintaining cross-border and international value chains.

• By joining together, countries in Africa can implement coordinated trade measures that result in better responses to the crisis. Joint actions include bilateral cooperation on border management, joint information campaigns, coordinated purchasing of medical equipment, partnering on repurposing production to produce medical goods, and management of health specialists to deal with emerging hotspots on the continent.

• Development partners should support coordinated actions by regional institutions through analysis, technical assistance and perhaps operational projects. Identifying the appropriate level (sub- national, national, regional, continental) for interventions and the most effective institutions, in terms of relevance and capacity, to manage coordinated actions will be essential.

TRADE AND PANDEMIC CONTAINMENT MEASURES AFRICA

Trade in both goods and services will play a key role in overcoming the pandemic and limiting its health and economic impact, especially on the poor. The main purpose of this note is to highlight the opportunities and potential benefits for African countries from coordinated measures on trade in response to the COVID19 epidemic.

Trade contributes by providing countries access to essential medical goods (including material inputs for their production) and services to help contain the pandemic and treat those affected; ensuring access to food, maintaining and enhancing nutritional intake of the poor which will boost immune systems and contribute to the ability to resist the virus; providing farmers with necessary inputs (seeds, fertilizers, pesticides, equipment, veterinary products) for the next harvest; and supporting jobs and maintaining economic activity in the face of a global recession, disruption to regional and global value chains, and reduced employment and increased poverty.

Measures to contain the pandemic in Africa are reducing trade. African countries are highly dependent on global trade and measures put in place that limit trade will have negatively impact most countries. Thirty-two countries in Africa have put in place flight restrictions. Some have suspended all commercial passenger flights, others have blocked international flights, while a few have limited the restrictions to countries with high infection rates.

Border closures can have drastic impacts on welfare and poverty reduction. Borders need to be kept open as much as possible for trade, whilst implementing effective containment measures. Small-scale cross-border trade is a major feature of many African economies, contributing to the income of about 43 percent of Africa’s entire population according to some estimates.

Such trade supports livelihoods, especially for women, creates employment, and being dominated by agricultural and livestock products is an essential part of food security in many places. For example, in August 2019, Rwanda closed its border with the DRC after a second death linked to Ebola was confirmed in Goma.

News of the border closure – which lasted less than a day – caused the price of fruit and vegetables to surge in border towns and
provoked panic among those who cross the border to trade and work. As of 29 March 2020, 31 African countries have closed their land borders, according to the Africa Centre for Disease Control and Prevention.

Export bans raise the price and limit the supply of COVID-19 related goods and food on the continent. Experience from previous crises, such as the 2008-2011 food price crisis of 2009, clearly shows that imposing export restrictions on medical and food products will increase the international prices of these products which will impact most negatively on the poorest people.

Export bans on food also lower domestic prices which reduces the incentive to grow food crops in the next season. If the pandemic spreads in Africa in the same way as in Europe and the USA, it will result in critical hotspots that could overwhelm local health capacities. Already, some countries, such as South Africa, are more affected than others. Dealing with these hotspots is in the interest of all countries on the continent, to contain and control the spread of the virus.