With the disruption of the global supply chain by Covid-19, there is a concern as to where Africa’s future market and trading opportunities lie. Trade and export demands have dwindled for some companies and skyrocketed for other companies. For the first time in world history, the price of the West Texas Intermediate (WTF) Crude oil slammed into negative $37 per barrel in April 2020.
The Covid-19 pandemic has taught all African economies the importance of self-reliance in healthcare, pharmaceuticals, agriculture, and PPE production. The AfCFTA could therefore not have come at a more opportune time as several African economies are beginning to look within and focus on local manufacturing and production of most essentials needs and exports.
As the government of Ghana stated in the objective response to COVID-19, we must inspire expansion of our domestic capability and deepen our self-reliance. We have seen this in our local manufacturing industries with our pharmaceuticals and distilleries collaborating to manufacture alcohol-based sanitizers to meet the increasing demands.
How would COVID -19 affect export trade?
Export trade has been impacted through mass production shutdowns and supply chain disruptions. There is a huge supply chain challenge on the ability for businesses to ship and receive products on time due to logistic bottlenecks and limited workforce capacity. Countries that are net exporters of oil and gas will perhaps experience the biggest adverse impact. Other commodities such as coffee and copper prices will also plummet as a result of the impact of COVID-19 on export trade. The JP Morgan global Purchasing Managers' Indices (PMIs) for March showed export orders in manufacturing sinking to 43.3 relative to a baseline value of 50, and new services in export business dropping to 35.5, suggesting a severe downturn.
Impacted on the sub region
Across the region, COVID -19 has impacted businesses and sectors differently. The hospitality sector, due to border closures and reduction in international travel, tourism and entertainment have adversely been impacted, whilst technology services providers are seeing growth as people embrace the new normal, where organizations have employees working from home, students learning online.
In addition, Covid-19 has disrupted global supply chain and this presents an opportunity for countries to look at rebalancing over-reliance on global suppliers in favor of more competitive regional and local manufacturers. This presents a huge opportunity for our local manufacturer. This is the time for local and regional manufacturers as well as exporters to collaborate to increase market share.
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