Our team is busy working to help people, governments and firms tackle the huge challenges caused by the COVID-19 crisis in the sectors we support.
The environment is uncertain and fast-moving – requiring a dynamic and flexible approach informed by solid evidence and up-to-date intelligence.
We are gathering information and talking to partners to help stakeholders coordinate and ensure sectors are in the best possible position to mitigate the impact, survive the crisis and thrive in the future. We will share more about our response as the situation evolves.
On this page we will also share useful information we have collected from other sources – we hope this may be helpful to others.
COVID-19 IMPACT ON EAST AFRICA – FORTNIGHTLY BRIEFING
Every two weeks we are working with our partners Msingi and Gatsby Africa to produce a briefing on the impact of the crisis in East Africa. This covers information on the macroeconomic impact, how the sectors we work in are being affected, and the donor response. It also includes links to useful trackers and sources of further information.
Week Commencing 17th August Summary
The macroeconomic impact
The African continent has now exceeded 1 million COVID-19 cases. Negotiations for the African Continental Free Trade Area have moved online, with the African Union confident they will meet the operalisation timeline for January 1st. According to the Kenyan National Bureau of Statistics, 70% of Kenyan households are struggling to pay rent. In tourism, Tanzania has been listed by the World Travel and Tourism Council (WTTC) as a ‘safe travel destination’. Alternately, Kenyan tourism continues to struggle, recently being hit with an updated travel advisory from the US due to increased cases, closures of major hotels and few visitors for this year’s wildebeest migration. The WHO and Africa CDC have, however, raised questions about the situation on the ground in Tanzania. Uganda has seen a return to growth in the last quarter, with Stanbic’s Purchasing Managers’ Index (PMI) moving into positive territory for the first time since February. Bad news for Rwanda, however, as Standard & Poor’s revised the country’s economic outlook to negative, citing rising pressure on debt and a slowdown in economic activity.
The sector impact
The American Apparel and Footwear Association (AAFA) predicts that US textiles and apparel sales could decline by 50% to $200B in 2020. The Government of Kenya has succumbed to pressure from the US and the country’s mitumba association to lift the country’s COVID-19-imposed ban on second-hand clothing, while local manufacturers have suggested that the ban should have remained permanent. Mitumba traders are now requesting that clearances for used clothing be fast tracked to make up for five months of lost revenue. The Bank of Tanzania has reported that the country’s construction sector continues to perform well despite COVID-19, with 31.2% annual growth in commercial loans to the sector. Tea prices at the Mombasa auction have continued to edge up slightly week on week, from $1.82 to $1.85 per kg. A fierce debate is raging in Kenya’s water sector over the ethics of cutting off water as a payment enforcement strategy, after the release of a World Bank-sponsored paper on the subject.
The donor response
In partnership with prominent UK supermarkets and clothing retailers, DFID has announced a £6.85M fund to support conditions for workers in export-oriented supply chains in Rwanda, Tanzania and Uganda (amongst others). The EU has announced 66.25 M KSh to support local communities in Kenya responding to COVID-19. The IFC has transferred $50M to Diamond Trust Bank in Kenya for onward lending to SMEs struggling due to COVID-19. Lastly, in Kenya, the Mastercard Foundation has partnered with Technoserve, KEPSA, the Kenyan Chamber of Commerce and the Women Work Network as part of its COVID-19 Recovery & Resilience Programme.
You can download the latest briefing for the week commencing 17th August by visiting the Gatsby Africa Website.