The Covid-19 pandemic crisis has worsened the vulnerabilities caused by the excessive reliance of African economies on world markets.
Africa’s main trade partners include the European Union, China, the US and UK. Together they represent more than 50% of the continent’s trade flows.
Africa’s dependence on external markets for medicinal and pharmaceutical products is particularly acute — Africa imports more than 95% of these products from outside the continent.
Also read: EAC should fast-track AfCFTA for the private sector to tap into the US$4T market
As the continent’s main trade partners have been severely hit by the Covid-19 pandemic, Africa has suffered significant business disruptions and output contraction, including in export sectors.
Africa’s gross domestic product could contract by 1.4% in 2020, and the continent’s total merchandise exports could decline by 17%. McKinsey estimates that Africa’s manufacturing sector output will shrink by 10% in 2020 — equivalent to a loss of more than US$50B.
Deepening regional integration on the continent through the AfCFTA can build resilient economies post-Covid-19.