The global Covid-19 pandemic has had an enormous impact on trade across the world. Value chains and trade have slowed down, or even been brought to a halt, via several channels:
- Reduced mobility of goods and people
- Reduced supply channel
- Reduced demand channel
- Policy actions (e.g. export bans to increase domestic supply of critical products such as pharmaceuticals).
As a result, World Bank projections in June 2020 estimated a 5.2% drop in global average gross domestic product (GDP). In a worst-case scenario, the projections indicate the African economy could contract by up to 2.6% in 2020, equivalent to a loss in GDP growth of $120 billion.
This paper investigates the impacts of the pandemic on trade and value chains in Africa, with a special focus on Ethiopia and Kenya. It also makes specific policy recommendations regarding the African Continental Free Trade Area Agreement in the light of Covid-19.