Transforming challenges into opportunities A reflection on the effects of Covid-19 on African trade

Abstract

This study investigates the impact of the Covid-19 pandemic on African trade dynamics, and explores potential redress measures that can be employed to mitigate its adverse effects. In particular, the study is contextualised with reference to the significance of trade as a development vehicle for Africa within the framework of the African Continental Free Trade Area (AfCFTA) agreement. Through a review of academic literature and online news media, this research explores existing evidence and explores the micro- and macro-economic implications of Covid-19 on Africa’s external trade. Africa’s first positive case of Covid-19 was recorded in Egypt on 14 February 2020, followed by Nigeria on 27 February 2020, and from there onwards Algeria, Cameroon, Morocco, Senegal, South Africa, Togo and Tunisia. Covid-19 has had significant effect on global output, which the International Monetary Fund estimates to have fallen by 3.5 per cent in 2020. African countries have been affected differently, and the economic performance is not uniform across African regions and subregions with real gross domestic product growth of the West and Central Africa in 2022 being higher than that of East and Southern Africa. Empirical evidence demonstrates the varied impacts across different African economies, with sectors such as tourism and oil-exporting industries particularly hard-hit. This study proposes strategic recovery measures aimed at bolstering Africa’s resilience and revitalising its trade landscape. Recommendations include intensifying economic diversification, leveraging digitalisation to streamline trade processes, and investing in the agricultural sector to exploit comparative advantages. Furthermore, the study advocates the deepening of regional integration, and the fostering of intra-Africa trade, particularly through initiatives like AfCFTA.