Logisticians in the East African region will hold a virtual meeting on 25th June of this year to carry out an audit of the impact of the Covid 19, which has significantly affected movement of the cargo across the region with a huge economic impact on the EAC economies.
Regional economies are driven by facilitating the movement of the cargo to and from different geographical locations supporting key economic sectors such as manufacturing, agriculture, aid and relief, construction, education among others.
However, intervention to stop the spread of Covid-19 have created some hurdles in the movement of cargo and service supplies and people across the EAC. The meeting is convened by the East African Business Council (EABC).
“In line with the above, EABC is desirous to engage with the stakeholders in the transport and logistics sector to engage and deliberate on the impact of Covid 19 pandemic on the sector and chart out a recovery strategy for the short, medium and long term,” Dr. Peter Mathuki, EABC Chief Executive Officer said.
Senior government officials, business leaders, development partners, freight forwarders, truckers and other stakeholders across the region have been invited to participate and share insights on the transport and logistics sector.
Last month, a study carried out by Deloitte on the impact of Covid 19 on four regional economies revealed depressed economies. In Kenya, GDP growth averaged 5.4% in 2019 and had been projected to grow at about 5.7% in 2020 amid robust private consumption, higher credit growth, and rising public and private investment.
Further, as the COVID-19 pandemic hampers revenue base collections, the negative outlook on Kenya’s financing risks becomes exposed.
As such, the large gross borrowing requirements, which include amortization of external bilateral debt and the need to refinance a large stock of short-term domestic debt have seen rating agency Moody’s change Kenya’s sovereign credit outlook to “negative” from a previous outlook of “stable”. In light of the COVID-19 pandemic, GDP growth is expected to decline to 1.0%.
This, Deloitte reported, is majorly due to reductions in household and business spending of about 50 percent due to liquidity constraints; disruption in supply chain for key inputs in machinery and chemicals of about 30 percent; decline in imports from affected countries of about 3.1% estimated decline in total import value and a decline in tourism activity (about 20 percent) due to a standstill in the global aviation industry; and
In Ethiopia, Africa’s second most populous country with more than 110m people, the real GDP growth in 2019 was 9.0% and was forecasted to be 6.2% in 2020 pre-COVID-19. This forecast has now been revised downwards to 3.2% in 2020.
This is mostly due to disruption in supply chain and weakened global demand, which has affected the inflow of raw materials and finished products for manufacturing and trading; a sharp rise in inflation as domestic food prices rise steadily (owing to a sharp decline in harvest because of the locust infestation) and a sharp decline in tourism as the coronavirus pandemic deters travellers with hotel occupancy rate decreased to about 2% and cancellations on bookings for the next 3-6 months; and
Too, significant job losses- Ethiopia’s Job Creation Commission has estimated between 700,000-2 million jobs are likely to be lost in 2020 depending on the severity of the virus on Ethiopia’s economy.
Tanzania’s real GDP was initially estimated to increase by 5.3% in 2020, down from 6.3% in 2019. However, following the COVID-19 pandemic, Tanzania’s GDP growth is expected to decline to 2% in 2020.
This is mainly attributable to an expected decline in the tourism sector’s growth following the imposition of global travel restrictions and closure of hotels in Tanzania; decline in international trade due to supply chain and disruptions and waning international demand for Tanzania’s mineral exports, as export destinations report economic slowdowns as a result of the COVID-19 pandemic.
In Uganda, GDP growth averaged 5.9% in 2019 and had been projected to grow at about 5.3% in 2020 amid steady agricultural growth, expansion in gold-processing and delays in oil projects. However, in light of the COVID-19 pandemic, GDP growth is expected to decline to 3.5%.
This is majorly due to a slowdown in agricultural production from the localised impact of a regional locust outbreak in North-East Uganda; a sharp decline in tourism as the COVID-19 pandemic deters travelers and disruption of supply chains and weakened global demand which has affected the inflow of raw materials and finished products for manufacturing and trading.
