AFRICA AND
COVID-19
TESTING
TIMES
Here Ruth Nduta, Group Marketing &
Communications Manager at Siginon
Group, presents an African perspective
on the sector’s current problems.
The world today continues
to grapple with the
COVID-19 virus that has
snuffed out the lives of
thousands across the globe.
This newly discovered, highly
contagious disease has
threatened human existence, as
infection rates have soared,
month after month. Having
initially begun in Wuhan, a
Port City in China, COVID-19
has rapidly spread to other
parts of the world, paralysing
economies, trade and
mankind’s safety within those
countries affected. As a
response in the battle against
the spread of the disease,
countries have taken a variety
of measures, such as the closure
of border points, lockdowns,
quarantine and curfews; social
distancing has been
encouraged, while movements
have been limited to forestall
the further spread of the
disease. Because of these
interventions, trade and
businesses have been paralysed,
pushing economies to the brink
of collapse, while stock markets
around the world have crashed.
A major victim
The transport and logistics
sector is a major victim of
COVID-19. The industry, which
is driven by facilitating cargo
movement to or from different
geographical locations,
supports key economic sectors
such as manufacturing,
agriculture, aid relief,
construction and education,
amongst others.
However, intervention to
stop the spread of COVID-19
has made it a challenge, if not
an impossibility, to move goods
from point A to B: thus trade
has been affected between
regions.
A recent International Air
Transport Association report
states that the aviation sector
supports 6.2m jobs in Africa;
put another way, that is 2.6% of
Africa’s GDP. However, since
January 2020 well over 185,000
passengers have cancelled
flights and vital cargo capacity
has disappeared. This has
negatively affected the
airfreight sector, whose goods
primarily comprise
pharmaceuticals, chemicals,
flowers, vegetables and fruit, as
well as other items.
Flower exports to key
markets such as the European
Union have dropped by over
50% because of the result of the
financial crisis caused by the
COVID-19 outbreak. The Dutch
auction has been operating
below capacity and eventually
closed, resulting in some farms
suspending shipments of
flowers because of the
uncertainty within the market.
In Kenya, perishable exports
have taken a huge beating,
following last minute flight
cancellations after the produce
had been packaged and was
only awaiting loading on to
cargo aircraft. In one instance,
ten tonnes of fresh export
flowers decayed through these
cancellations, resulting in a loss
of approximately US$120,000.
Farmers have therefore begun
Kenya’s over-reliance on
Chinese imports, which average
40% of the total port’s imports.
The subsequent impact of these
cancellations has resulted in a
decline in cargo handled at the
Port as well as a decline in
revenue collection by the
Customs Authority. The railway
system, a major infrastructure
project in Kenya, has yet to
settle its loan with the Chinese
government that is envisaged
to be generated by the income
collected via the railway from
the Mombasa Port and ICD
business. This deferral because
of COVID-19 is most
unwelcome and will jeopardise
the Kenyan government’s
ability to pay this loan.
The manufacturing dilemma
The manufacturing sector has
been negatively affected
through its reliance on Asian
countries as the source of most
intermediate inputs for
manufacturing. China was the
epicentre of the COVID-19
outbreak, and its factories were
shut down for weeks and
workers placed in quarantine to
contain the spread of the virus.
Subsequently, countries which
relied on China for exports are
now operating on low
inventory or are paralysed
altogether because of a lack of
inputs to support local
production. Reliance on
Chinese expertise in the
manufacturing sector has also
been affected by travel
restrictions, thus stalling
production pending an uplift of
these same restrictions. As the
world’s manufacturing capital,
it is indeed true that when
China sneezes, the world
catches a cold.
Intra-African trade has also
taken a hit through the closure
of borders between
neighbouring countries.
disposing of flowers worth
millions of dollars for lack of
markets; while workers are
being sent home either on
leave or are being made
redundant. Export flowers are
amongst Kenya’s leading
foreign exchange earners and
the impact of these
cancellations will be felt all the
way to the Exchequer.
Disruption to the supply chain
Dr Joy Kiiru, an economist at
the University of Nairobi,
summarises the resulting crisis
as a disruption in the global
supply chain affecting several
sectors, compounded by
globalisation and the
interdependence of economies.
Shipping from China to
Kenya has been reduced
drastically, with over 37 vessels
being cancelled, while others
reported blank arrivals at the
Port of Mombasa. These
cancellations affected cargo
throughputs at the Kenya Ports
Authority and subsequently the
supply chain, with the standard
gauge railway (which hauls
cargo from the port to the
inland container depot) being
most affected. This situation
has been described as the worst
in the KPA’s history, which is
ultimately a reflection on
18 June 2020 www.airlogisticsinternational.com
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