Addis Ababa, Ethiopia | Xinhua | The East Africa Community (EAC) economies have proven to be relatively resilient in terms of the catastrophic impact of the COVID-19 pandemic despite greater need for economic diversification, according to a newly launched United Nations Economic Commission for Africa (UNECA) report.
The newly launched joint report by UNECA, TradeMark East Africa (TMEA) and African Economic Research Consortium (AERC), is entitled “Waving or Drowning? The Impact of the COVID-19 pandemic on East African Trade.”
“They thought that the region would drown in terms of trade declining catastrophically. But in actual fact, the EAC economies (Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda) have, by global standards, proven to be relatively resilient,” the joint report read.
The report noted that declines in imports broadly reflected the adverse trade performance of the EAC’s main trading partners during the early phases of the pandemic in April and May 2020.
It, however, indicated that the imports of all the EAC partner states subsequently recovered to pre-pandemic levels by the second half of 2020, after governments’ lockdown restrictions were eased and a broader global trade recovery started to take place.
“Nonetheless, despite showing resilience, COVID-19 has reversed some of the gains made in trade facilitation,” the report affirmed.
According to the report, the marked increase in transit times highlights the challenges posed by the COVID-19 pandemic at border points.
Immediately after COVID-19 outbreak, the ship dwell time at Mombasa port, in Kenya, increased by 48 percent and Berth time increased by 52 percent. Cargo transit from Mombasa Port to Malaba (the border between Kenya and Uganda) increased from 7 days to 11 days by the second quarter of 2020, the report said.
The time taken to transport goods via the Mombasa-Busia route was nearly three times higher. On the Central Corridor, the transit time from Dar-es-Salaam, Tanzania, to various cities in the neighbouring countries more than doubled, it noted.
The report also said another major casuality from the crisis has been informal cross-border trade, which has struggled to recover from the regional restrictions on cross-border travel, in which the resultant impacts include loss of income in border communities and a reversal of women economic empowerment.
The report provides a set of recommendations for public and private sectors to steer the region’s economies to greater stability post COVID-19.
One of the key recommendations is for the EAC partner states to diversify their economies, which is mainly due to excessive commodity export dependence, still exposes the regional economy to “unnecessary risks.”
The African Continental Free Trade Area (AfCFTA) Agreement “could be instrumental in making this happen,” the report advised.
The report further urged policymakers to support development and implementation of technological innovations to address the bottlenecks that have arisen during the crisis along the Northern and Central Corridor.
The recommended technological innovations include the Regional Electronic Cargo Tracking System which has enabled issuance of jointly recognised health certificates by EAC partner states thus eliminating the need for multiple tests for truck drivers.
Other technological innovations that support paperless trade will deliver time and cost benefits to the region post-COVID-19 as well as support regional integration, the report argued.
The report, however, underscored that from a trade perspective, “the region is still not out of the woods.”
The pandemic’s rapidly evolving nature and its spillover effects may still present a significant threat to trade and commerce within the EAC over the coming years, the report argued.
The report also advised the EAC partner states “must continue with a tightly coordinated approach to addressing the pandemic’s challenges.”
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Xinhua
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