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tralac’s Daily News selection

tralac’s Daily News selection

15 Apr 2020

The ECA’s African Trade Policy Centre is conducting a short COVID-19 Africa Impact Survey to provide insights into the economic effects of COVID-19 on economic activity and trade for African businesses. The survey can be accessed here.

In a report to be released later this week, the UNECA outlines different scenarios and outcomes as well as the impact the Covid-19 pandemic has had across the continent. The ECA also notes that the economic impact of COVID-19 on African cities is likely to be acute.

African Union’s Labour Migration Advisory Committee: statement on COVID-19 and the condition of African migrant workers

The Labour Migration Advisory Committee is extremely concerned about the welfare of African migrant workers, refugees and Internally Displaced Persons caught in the cross-fire of this current global health crisis. As countries increasingly adopt sweeping measures, thousands of vulnerable African labour migrants have become stranded in their different countries of work. Some are likely to fall victim to hardship, exploitation, and extortion in their desperate effort to return to their homes and families before the intensification of the on-going global containment measures.

The AU LMAC, therefore, calls upon the AUC, RECs, member states, social partners’ organizations and the international community to strategically consider and implement measures to mitigate against businesses collapse, jobs and income losses. In the near future, Member States are encouraged to put in place unemployment insurance plans and to extend social security to workers in the informal economy and rural sectors.

Further, we call on African governments in the post-COVID-19 era to carefully look at and renegotiate the different Labour Migration Agreements that they may have signed with the view of ensuring the enjoyment by migrant workers of adequate health and safety, social protection and portability, and other human and labour rights protections.


Today’s 18th extraordinary summit of the EAC Heads of State on COVID-19 has been postponed, due to a request by South Sudan. The East African Business Council had prepared two inputs for the summit:

  1. pdf Private sector recommendations on mitigating the impact of covid-19 in the EAC region (1.00 MB) . In a bid to safeguard current and future jobs, exports and businesses as well as offer quick economic recovery for the EAC Bloc, the Board on behalf of the EAC Private sector recommends to the Council of Ministers and to the Summit of the EAC Heads of State as follows:

    • Adopt a common regional approach in the preparedness and response measures towards mitigating the impact of COVID-19 outbreak in the EAC

    • Implement an Open Skies Policy for cargo carriers into the EAC market to fully liberalise free movement of goods across the EAC without restrictions in line with the Yamoussoukro Decision on freedom rights and the draft EAC regulations on liberalisation of air transport services, during the COVID-19 pandemic

    • Provide an environment for private sector collaboration with bovernments to enhance efforts towards mitigation and response measures against COVID-19

    • The EAC Partner States to collaborate closely for increased production of essential goods and ensure their free flow across the EAC Partner States

    • Allow free movement of essential services and service suppliers such as doctors, nurses, scientists, researchers, truck drivers, etc across the EAC region

    • Urge the EAC Partner States to provide fiscal incentives to businesses already involved in manufacturing of essential products such as health equipment, sanitizers, masks, soaps

    • Enhance collaboration in information sharing, best practices and any other support initiatives in fighting COVID-19

    • EAC Partner States to develop a harmonized economic stimulus package to cushion businesses against the impact of COVID-19 and save jobs.

  2. pdf A position paper on facilitating air cargo operations in the EAC region during the COVID-19 outbreak (188 KB) . The current COVID-19 crisis on air cargo operations requires extraordinary measures to address the challenges in the region. Like the EU, it demands greater cooperation between East African airlines and the international aviation community, including air cargo and express service providers to ensure the supply and fair distribution of scarce and essential goods. To achieve this cooperation, EABC recommends that the EAC Heads of State Summit considers the following;

    • Immediate/short term:

      • EAC Partner States to facilitate the use of passenger aircraft for cargo-only operations, including the re-positioning of air cargo flight crews

      • EAC adopts and directs the implementation of IATA operational guidelines for ground handling during COVID-19 crisis

      • EAC temporarily grants the Yamoussoukro Decision (YD) 5th to 9th Freedom rights, effectively increasing capacity, reducing inefficiencies and costs.

      • EAC promotes consolidation of air freight and cooperation between EAC airlines and allows for flexibility in scheduling

      • EAC encourages coordination and equitable share for EAC airlines for both south and northbound freight

      • To reduce operating costs, that the EAC Partner States waive landing fees, excise duty on aviation fuel, navigation, landing, parking and COVID-19 related fees.

      • To encourage imports by air, that the EAC Partner States waive all import duties and VAT by air during the COVID crisis

      • EAC Partner States provide subsidies for the Aviation industry in the form of direct financial support; loan guarantees, corporate bonds and tax reliefs.

    • Post COVID-19 crisis:

      • EAC Partner States fully adopt and implement draft regulations on the liberalisation of air transport services and expand Freedom rights beyond the fourth to foster the growth of both passenger and cargo traffic

      • EAC Partner States to harmonise landing fees, excise duty on aviation fuel, navigation, landing, parking and other related fees across the EAC region

      • EAC Partner States to improve air transport logistics and infrastructure, security and interconnectivity to attract high capacity carriers.

    • Expected long term benefits:

      • Increase inter-regional air transport traffic/frequencies by 41% and reduce flight time

      • Reduce air transport cost (passenger and cargo) by 10%

      • An additional 46,320 jobs and $202.1m per annum in GDP for the EAC partner states

Related:


The IMF posts its Regional Economic Outlook for Sub-Saharan Africa

As with growth, considerable uncertainty remains around budget forecasts for 2020 as more countries put together emergency fiscal measures and commodity exporters adjust to recent price drops. On average, current projections suggest that for oil-importing countries, fiscal deficits in 2020 could be about 2.5% of GDP higher than in 2019, driven mainly by an increase in expenditures reflecting greater health spending and discretionary stimulus in some cases. For oil exporters, the deficits could be 3% of GDP higher, driven by a decline in revenues. The increase in expenditures in oil-exporting countries is expected to be less than for oil importers, given limited fiscal space, and mainly targeted at the health sector.

The evolution of debt levels will depend on a number of factors that are difficult to predict. Additional fiscal stimulus, realization of contingent liabilities, lower than expected growth, and currency depreciation caused by external pressures can all affect debt dynamics significantly. Current baseline projection suggests that, on (simple) average, debt levels will rise temporarily from 58% in 2019 to 64% in 2020 (compared with a projected decline to 56% in the October 2019 Regional Economic Outlook for Sub-Saharan Africa) but decline thereafter as fiscal adjustment plans are implemented (Figure 1.13). This picture masks considerable heterogeneity because several countries are expected to see increases in debt levels ranging from 10% of GDP to 25% of GDP, reflecting lower output, larger fiscal deficits, and exchange rate depreciations.

Once the health crisis abates, ensuring that fiscal policy reverts to its medium-term path will reduce debt vulnerabilities. The size and pace of the adjustment should be guided primarily by long-term objectives for fiscal sustainability and stabilization and the availability of adequate financing. [Download:  pdf Regional Economic Outlook - Sub-Saharan Africa: COVID-19: An Unprecedented Threat to Development (4.43 MB) ]


The locust plague: Fighting a crisis within a crisis (World Bank)

If [East African] countries don’t act now, the locust population will swell exponentially - hey are projected to grow by up to 400 times their current numbers by June - and potentially spread to new areas, including West Africa, just as crops are ready to be harvested. Without broad-scale control measures to control the locusts, damages and losses could reach $8.5bn by the end of 2020. Locust plagues can be difficult to control in normal circumstances, requiring cooperation across borders to destroy swarms before they multiply and equipment like airplanes that aren’t always readily available. The COVID-19 pandemic will make things even more challenging. Already, disrupted supply chains are delaying the delivery of locust control equipment and inhibiting access to critical materials and services. Lockdowns and travel restrictions are preventing response teams from reaching areas that desperately need their advice and expertise.

In response to urgent need, the World Bank Group is moving to provide flexible support to countries affected by the outbreak. The Bank Group is coordinating closely with partners, including the UN-FAO, which is leading control efforts. To support the short-term response, the Bank Group is mobilizing emergency financing, combined with policy advice and technical assistance, to support countries in their immediate response to the infestation. In Kenya, US$ 13.7 million in emergency funding supports the Government in setting up six control bases across the affected counties for coordination of the control operations, deploying surveillance aircrafts, and providing ground control equipment and other materials needed for control. Dijbouti will also receive emergency funding. [FAO: In East Africa, a race to outsmart locusts with drones and data]


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