Just six months since the infectious disease COVID-19 was identified in a Chinese city, it has became a global health crisis, forcing governments to lock down borders and impose lockdowns to control its spread. While the focus is mainly on health systems, the pandemic has also shut down enterprises, travel, and trade routes.
On the continent, the pandemic is spreading alongside desert locust invasions in East Africa, falling global oil prices, and other emerging issues that will only worsen the situation if we do not adapt quickly.
While we imagine a post-Covid-19 world being the same as the world before 2020, pandemics have lasting effects that change society in a more permanent way. It is likely that without an effective global vaccine, we will not return to a state of largely free travel and trade where the only medical document you had to show in most countries was a yellow fever card any time soon.
That world was already changing when the Ebola epidemic hit parts of the continent, and COVID-19 has forced closed much of the global trade system.
The continent’s trade with China, its biggest trading partner, fell by 14% in the first three months of 2020, as the Asian giant shut down Wuhan and other areas, and then the pandemic spread across the world. The effects of the Chinese shutdown has been felt world over, even in products such as electronics since shipments from China and the rest of the Asian markets are not making it into our markets. The ripple effects are infinite and everyone is feeling the economic and social crunch. Now, as the virus continues to spread across communities, it is unlikely that this trade will bounce back any time soon.
As Africa faces down to this new reality, with countries staring at potential scarcity of essential goods, it is time to rekindle the question, why aren’t we trading more with each other?
Why are we not trading more oil, flowers, food, with each other?
Africa produces nearly everything it needs to adapt and come out of the pandemic better. It has everything from what people need (food, oil, medicines, professionals), to what people want (beautiful experiences, adventures, entertainment). But low profit margins and inadequate intra-continental trade routes have meant that we mostly trade these with other continents. For example, the continent collectively imports $16bn worth of pharmaceuticals each year, according to figures the United Nations. We also import raw fish, mainly from China, although the continent is blessed with lakes and oceans teeming with fish, and has local supply chains that only need to be enhanced.
Another good example is the cashew nut trade, where African countries from the Ivory Coast to Tanzania export almost all their raw nuts to Asian countries for processing and forward sales. While most countries with cashew nut sectors have made efforts to improve local processing and sales, profitability is still an issue for farmers and processors alike. With trade routes now scaled down or completely shut down, shipping raw materials at a large scale has been nearly impossible in the last few months.
A few weeks ago, Uganda proposed a relay system for cargo transit, where Kenyan truck drivers would move the cargo from the Mombasa port to the border and hand it off to Ugandan drivers. The reason is that a large number of Uganda’s confirmed cases of COVID-19 are truck drivers, who spend most of their working days in transit. Their essential cross-border travel presents not a challenge to the region, but also an opportunity to redefine trade links.
One of the reasons why we are not profitably trading with each other is that although African countries are distinctly unique, some of what they produce is the same. The lack of specialisation might increase consumer choices, but they end up flooding markets and at times, edging out local producers. Ugandan, and at times even South African, eggs have been known to skew the markets in Kenya, cutting off Kenyan poultry farmers. The situation is almost the same even where two countries export the same commodity, competing with each other on global markets.
To solve this, governments may need to reach compromises with far-reaching consequences to boost intra-continental trade faster than they’d hoped. Some of these compromises may be as easy as divvying up sectors to specialize in while assisting each other to build what we all need. The compromises do not need to all be commodity-based, because some countries have professionals and artisans who are needed in their neighbors.
Another motivator is the fact that most of Africa’s leading economies rely heavily on oil production and export, which has been suffering an independent downturn of its own. Most of this oil ends up on other continents, and yet our continent has the youngest population and needs to start setting up social and economic structures for their prosperity. Intra-continental trade is likely to be our redeeming factors, but only when we as African nations embark on it as soon as possible.
Within the East African Community, intensifying the trade among the member countries could help alleviate numerous economic problems with homegrown solutions. To boost intra-African trade, governments need to assist and promote their local businesses by guaranteeing them local markets and enhancing intra-continental trade in commodities and knowledge not locally available; which is a win-win situation for everyone.
The continental free trade agreement, which would have come into effect in July if not for the pandemic, was meant to boost this trade and build towards manufacturing capability. Its postponement does not have to signify the end of the idea for now, because societies are still producing things that others need or want.
A widespread cooperation on the continent would not only save existing jobs, but also create new ones. It would encourage building better intra-continental trade networks that are resilient enough to outlast the pandemic, and lessen the economic burden on governments as they focus on curbing the spread of COVID-19.
The priority should, of course, be food.
