US$ 905m worth of intra-Comesa exports lost to Covid-19

AFRICAN states should urgently implement electronic digital integration systems to cushion their economies from unforeseen disruptions such as Covid-19, whose impact has resulted in loss of an estimated US$905 million worth of intraComesa exports last year alone.

The loss was incurred on the back of mitigation response measures like lockdowns, which restricted individual movement and business trading hours as regional governments sought to curb the spike in new infections.The findings of this study imply that the new norm of Covid-19 will continue to harm intra-Comesa trade, which demands that member States should urgently consider digitalization as a critical policy direction.

This is contained in a research paper carried out by Adam Willie, a principal economist with the Ministry of Industry and Commerce in Zimbabwe titled: “Digitalizing Trade in the Wake of Covid-19 Pandemic in Comesa”, which was presented during the virtual 8th Annual Comesa Research Forum, which began on Monday and ended yesterday.

“The losses vary from one country to another. Egypt and Kenya had losses in excess of US$100 million. DR Congo, Ethiopia, Sudan, Tunisia, Uganda and Zambia had losses in the range of US$60 million to less than US$100 million,” said Comesa citing the study findings.

“The rest of Comesa member States had losses of below US$20 million. Overall, the high level of stringency on Covid-19 in government response policies in the region was found to harm regional intra-exports in 2020.”

“Government policy response stringency index for Comesa member States averaged 53.18, with a minimum of nine and maximum 82.3.”Mr Willie, said Comesa, established that enhanced e-commerce would mitigate this loss if applied regionally, which emphasises the need for an integrated approach that harmonises interventions on a broader scale.

However, this ideal could take longer to implement as the region still lags behind its global peers in the use of internet and implementation of information communication technology infrastructure needed for digitalizing trade. It is below the critical mass required to mitigate the adverse effects of Covid-19, according to the research.

“A 10 percent increase in the interaction variable of the Covid-19 proxy and exporter internet use would increase intra-Comesa exports by 0.021 percent,” Willie was quoted as saying.

“Again, a 10 percent increase in the interaction of the Covid-19 proxy and exporter EDI (electronic digital integration) systems would increase intra-Comesa trade by 0.12 percent.”

The research points to the need for a robust legal framework that supports digitalising trade, which the region was found wanting.

This could be minimized through increasing internet use and implementation of the EDI systems by exporting countries, said Comesa. “Comesa member States should implement the Covid-19 response measures together with trade digitalization in order to neutralize the pandemic’s adverse effect on intra-regional trade,” the study recommended.