Editor’s Note: The impact of COVID in Africa has been debated a lot. As an information platform, Africa News Matters went all in to try to present an accurate picture of the impact of COVID in Africa. The impact of the pandemic on citizens on the continent varies from country to country. But COVID’s impact on international business and trade, and the challenges it poses to African economies is something that we have not discussed much. Oscar Katusya seeks to explain what happened.
Prior to COVID-19, the African continent was on the right path in terms of development and economic growth. The COVID-19 pandemic left small and medium enterprises struggling. Africa’s GDP shrunk by 2.1 percent in 2020 due to COVID-19-related challenges. A UNECA survey found that Small and Medium Enterprises(SMEs) indicated that lack of operational cash flow is the leading challenge following COVID-19.
The continent’s three leading African trade partners, China, the United States, and the United Kingdom, were impacted by COVID-19 in major ways. In 2019, all three, China, the US, and the UK accounted for 49 percent of merchandise trade to African countries. For instance, in the first three months of 2020 China’s exports dropped 11.4 percent from 2019.
COVID-19 disrupted global trade, affecting most of Africa’s trade partners that export merchandise to SMEs, hence leaving African countries in need of better development strides.
These reports, whose links we have placed here, shed more light on the impact of COVID on African trade. Hopefully, a boost in Intra-African trade will power post-COVID-19 recovery and foster food security on the continent. Intra-African trade will power post-COVID-19 recovery and foster food security.
Ukraine Conflict Complicates COVID Recovery Plans
While recovering from COVID-19 African countries experienced another challenge — the Russian-Ukraine conflict. The continent relies heavily on Russia and Ukraine for crude oil and agricultural produce, for instance, the two countries provide 40 percent of Africa’s wheat supply. The ongoing war has resulted in price hikes. The conflict has slowed down the progress of the African recovery plan.
How to Overcome
The African Union’s Agenda 2063 may help overcome some of these challenges. One of the biggest and most ambitious plans by African countries is the Agenda 2063. The agenda is a master plan for the transformation of Africa into a future global powerhouse. The continent needs to become reliant on measures like intra-country trade and a continent-wide free trade area.