COVID-19 and Trade in Africa: Impacts and Policy Response

8 Pages Posted: 4 Jun 2020

Date Written: June 1, 2020

Abstract

Measures adopted to curtail the spread of COVID-19 have led to a sharp contraction of the global economy and an even larger decline in global trade, with significant implications on the livelihoods of people in Africa. Despite the relatively low number of cases, the region’s economy would be hard hit due to its high reliance on trade, heavy dependence on commodities, a fragile food system, and limited fiscal capacity to respond. This reinforces the region’s inherent vulnerabilities, posing risks of wiping out the gains made in poverty reduction. Countries that have been registering robust growth face rapid growth declines. The response calls for a regional and global coordination to scale up safety nets, facilitate flow of essential goods and ease the region’s debt burden to free some fiscal space. There is a need for active policies to support enterprises so that disruptions are not permanent. This requires coordinated effort between government, workers organizations, global lead firms as well as domestic firms. This may also provide opportunities to introduce reforms that would otherwise be considered sweeping. As they chart their operations, beyond the pandemic, countries should reconsider their industrial policies and firms need to rethink their strategies to address emerging uncertainties.

Keywords: COVID-19, Africa, Trade, Economic Impacts of Pandemics

JEL Classification: F13, O24, O24, I19

Suggested Citation

Kassa, Woubet, COVID-19 and Trade in Africa: Impacts and Policy Response (June 1, 2020). Available at SSRN: https://ssrn.com/abstract=3619230 or http://dx.doi.org/10.2139/ssrn.3619230

Woubet Kassa (Contact Author)

The World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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