Africa needs to learn from COVID-19 and build more competitive and resilient regional value chains through the African Continental Free Trade Area (AfCFTA), a paper released by the Economic Commission for Africa said on Wednesday.The Africa Trade Policy Center of the ECA, in collaboration with the UK-based Overseas Development Institute (ODI), has released a working paper entitled “Africa trade and Covid-19:The supply chain dimension.”
The paper investigates the impacts of the pandemic on trade and value chains in Africa, with a special focus on Ethiopia and Kenya, and the pharmaceutical sector.
According to a statement by the commission, COVID-19 has magnified Africa’s cross-border trade challenges, and endemic reliance on imports of essential food and medical products.
It added that ”implementation of the AfCFTA must be fast-tracked to help African countries bounce back from the pandemic and facilitate the emergence of robust and resilient African supply chains.”
COVID-19 has created significant disruptions to global value chains, through lockdown-induced contractions in demand and supply, increased transport and transactions costs in foreign trade and growing use of export bans.
Africa has been particularly exposed, noting about 82 percent and 96 percent of Africa’s imports of food items, and medicinal and pharmaceutical products, respectively, originate from outside the continent.
Also problematic has been the shift in the COVID-19 epicenter from China, which accounts for 11 percent of African exports and 16 percent of imports, to Europe, which accounts for 33 percent of African exports and 32 percent of imports.
The leading argument is that the pandemic has strengthened the case for developing intra-African regional value chains and unlocking the continent’s business potential, the statement noted.