The collapse of global economic activity and the move to more protectionist policies could a have severe impact on trade and development in East Africa.
Whether it’s Kenyan tea, Tanzanian cashew nuts, Ethiopian coffee, or Ugandan spices – the impact of a more protectionist approach would negatively affect not just East Africa, but the continent’s agricultural sector as a whole, said agri economist Wandile Sihlobo.
“Any attempt to hamper global trade must be resisted. The gains in global growth brought about by international trade by far outweigh any benefit that protectionism could bring.”
In addition, any collapse in economic activity that brings about macroeconomic instability will increase poverty and also halt developments in the region.
According to Duncan Bonnett, a director at trade consultancy Africa House, one of the biggest uncertainties at present is whether governments will have sufficient resources after Covid-19 to pick up projects again and continue building railways, roads and ports.
“There is growing concern about the impact that low commodity prices, low revenues from tourism and services, and fewer exports will have on governments’ abilities to build the necessary infrastructure.”
Already the Tanzanian government has scrapped the Bagamoyo Port development.
“Prior to Covid-19, East African countries already had some persisting challenges to overcome and were debt-stressed.”
One project the region could ill afford to lose was the Lapsset Corridor Project, he said.
This is by far East Africa’s largest and most ambitious infrastructure project bringing Kenya, Ethiopia and South Sudan together and involving seven key infrastructure projects starting with the new 32-berth port at Lamu in Kenya.
It includes transportation hubs for rail, highway and international airports in Lamu, Isiolo and Lodwar, an oil pipeline from South Sudan, Uganda and Ethiopia to Lamu Port, an oil refinery, and three resort cities in Isiolo, Lamu and Turkana.
According to Bonnett, a lot of the non-port infrastructure has already been built such as the roads between Lamu and Addis Ababa in Ethiopia, but the impact on the port development could be severe depending on how hard the region is hit by Covid-19.
In Lamu itself construction at the new port has been ongoing despite the lockdown conditions in Kenya.
Strict epidemic control measures had been implemented to reduce the risk to construction workers, a spokesman for the project said.
