It’s been nearly three weeks since the World Health Organization declared a global health emergency in response to the coronavirus, or COVID-19. More than 60 million people remain under quarantine in China with the number of deaths approaching 2000. This is actually thought to be the largest quarantine in human history. Africa is especially vulnerable given how most economies on the continent are dependent on exporting commodities.
The economic impact has spread along the same path as the virus. There are more than 73,00 confirmed cases in 29 countries. It has threatened a cascade effect throughout global supply chains that bodes poorly for the world economy as well as Kenya if authorities are unable to get the outbreak under control soon. The virus is believed to have a 14-day incubation period. The future weeks will also reveal how much economic disruption will spill over from China to the rest of the world. With the death toll rising in China and thousands more infected, there are mounting concerns that Chinese officials will be unable to stop the spread of the increasingly virulent coronavirus in the short term.
Kenya’s economy is the most vulnerable in Africa to China’s coronavirus outbreak, a new study from the Overseas Development Institute shows. Vulnerability stems from the high risk of physical exposure due to Nairobi’s transport hub status and the fact that it is one of the least prepared countries to deal with the virus. Kenya’s imports of electronics and surgical gear are currently stuck in China because suppliers have never returned from New Year celebrations due to travel restrictions.
Kenyan students are also among the foreigners stuck in the coronavirus hit Chinese City, Wuhan. Most of them are on competitive scholarships and are scared of the current situation which will discourage students from seeking further studies in China.
The most immediate economic implications from the coronavirus outbreak will manifest through a fall in tourist arrivals from, and weaker exports of goods to China and other economies integrated into the Chinese supply chain. Kenya’s small businesses which import merchandise from China to sell in Kenya will feel the pinch due to shortage of stock.
China’s economy was already slowing before the coronavirus outbreak but now with tens of millions of consumers hunkered down in their homes, and worried about potentially bank-busting healthcare costs, consumer spending is widely expected to slow even more. This could have an immediate impact on demand for African agricultural exports like the Kenyan tea
Kenya is much more exposed to the China market than other regions around the world so this crisis could also be the impetus that prompts forward-thinking policymakers on the African continent to expedite plans to further diversify their trade and investment relationships