COVID-19: African exporters to lose $2.4 billion
African exporters may lose more than $2.4 billion as a result of factory shutdowns in China, the European Union (EU) and United States, the International Trade Centre’s (ITC’s) SME Competitiveness Outlook has predicted.
The bulk of this loss, more than 70 per cent, the report said, is caused by the temporary disruption of the supply-chain linkages with the EU.
The Outlook revealed how SMEs and global supply chains have been tested by the COVID-19 pandemic and left international trade in turmoil.
It noted that global loss of manufacturing export due to lockdowns in the three global supply-chain hubs – China, the EU and the US – will amount to $126 billion in losses in the year.
ITC Acting Executive Director Dorothy Tembo said: ‘’The COVID-19 pandemic has been both a health and an economic crisis and has presented a number of challenges for small and medium-sizedenterprises (SMEs) and global supply chains. ITC’s 2020 SME Competitive Outlook report analysed the impact of COVID-19 on SMEs, international supply chains and trade while highlighting actions to build the resilience of SMEs given that they will continue to be lightning rods for future growth and to meet the Sustainable Global Goals.’’
‘The report provides a guide for businesses, policymakers and business support organizations on how to deploy post-pandemic recovery strategies. It aims to help SME ecosystems weather the crisis and gear up for the new normal, emphasising the need for resilient, sustainable and inclusive trade and leadership,’ Tembo said.
Drawing on data collected by ITC’s COVID-19 Business Impact Survey, carried out in the first months of the pandemic, the SME Competitiveness Outlook finds that more than 55 per cent of all businesses have been strongly affected by the pandemic.
According to him, two-thirds of micro and small firms said that crisis had strongly affected their business operations, compared with 40 per cent of larger companies. One-fifth of SMEs said that they were at risk of shutting down permanently within three months.
Companies in the services sector are the firms hardest hit by COVID-19, especially those providing accommodation and food services. A full 76 per cent of surveyed firms providing such services said that full or partial lockdowns had strongly affected their business operations.