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Regional economies proved resilient but not yet out of the woods

17 February, 2021
Waving or Drowning? The Impact of the COVID-19 Pandemic on East Africa

Nairobi, Friday, 17 February 2021 - TradeMark East Africa (TMEA), in partnership with the UN Economic Commission for Africa (UNECA) and African Economic Research Consortium (AERC), today launched a new report entitled, “Waving or Drowning? The Impact of the COVID-19 Pandemic on East African Trade”; in the presence of trade ministers from the East African Community (EAC).

The virtual session of policymakers, researchers, academics, and non-state actors discussed the link between COVID-19 Pandemic and trade within the East African region. The session was presided over by Hon. Betty Maina, Kenya’s Cabinet Secretary, Ministry of Industrialization, Trade and Enterprise Development.

The report establishes that the EAC economies were resilient against the pandemic, with exports holding up well and the regional trade balance improving due to lower imports. Furthermore, the report notes that although intra-regional trade initially suffered serious disruptions, it quickly recovered, as Partner States ensured the movement of essential goods and adopted measures to minimize disruption on the main transport corridors while still observing the COVID-19 health protocols.

Based on preliminary data, in three of the six EAC member states (Kenya, Rwanda, Tanzania), the report highlights that exports in 2020 were significantly higher than they had been in 2019. Meanwhile regional imports have moderated slightly, leading to improved trade balances for the majority of EAC member states. In terms of sectors, the report documents that while regional manufacturing held up quite well, in fact it has been some primary sectors which have done best, leading the region to an increased dependence on commodities – something which is not of course desirable from a long-term perspective”  

Speaking at the virtual meeting, Professor Njuguna Ndungu, Executive Director of AERC said that “The advent of the COVID-19 sent shockwaves into the emerging new sectors, such as tourism, manufacturing and financial intermediation thus compromising the recovery.” He added that, “Several indicators from diverse studies seem to indicate that African economies may suffer significant economic contractions due to the pandemic. However, the full impact on livelihoods is yet to be ascertained as the uncertainty surrounding the behaviour and the intensity of the pandemic is still unfolding.”

According to TMEA CEO Frank Matsaert; “Data from this research informs us of the important role trade facilitation plays in the regional economy. We need to ramp up trade facilitation efforts to spur innovation, and we urge the government to incentivizes priority goods so as to protect lives.”

Dr. Mama Keita, Director of UNECA in Eastern Africa, said, that given the potential of trade to promote economic growth and sustainable development, it is extremely important to take a close look at the impact of COVID on trade in East Africa. This report sends out important messages, notably the urgent need to diversify countries' economies and export base if they are to be more resilient to external shocks and register strong and sustained growth rates in the future.

The report notes that Even though there was a decline in exports when COVID-19 was first reported; Intra-regional exports bounced back to beyond predictions. This reflects the initiatives adopted by the EAC governments to reduce the bottlenecks while still observing the COVID-19 health protocols.

For further information or to request for interviews with TMEA, UNECA or AERC experts, please contact:

-          For TMEA: Ms. Ann Mbiruru, +254 784880181; ann.mbiruru@trademarkea.com

-          For UNECA: Mr. Didier Habimana: Tel: +250 788493377;  habimanad@un.org

-          For AERC: Mr. Charles Owino; Tel: +254 722205272; Communications@aercafrica.org