COVID-19: African Countries Taking Economic Advantage of Global Supply Shortfalls

COVID-19: African Countries Taking Economic Advantage of Global Supply Shortfalls

The spread of coronavirus is beginning to make an economic impact in Africa in the oddest way. The epidemic which among other things, has resulted in shortage of facemasks in China is pushing the export of the now scarce commodity from Nigeria, Kenya and some other African countries.

China used to be the largest producer and exporter of facemask before the outbreak of COVID-19, and its major export destination was Africa. The events of the deadly virus have turned the tide in favor of the importers.

The World Health Organization (WHO) said coronavirus has caused disruption in global supply, spiking also the price of gowns, gloves and other protective gears up to 100 percent. The health governing body said the price hike is as a result of non-medical people who use these items for preventive measures.

“When supplies are short and demand is high, then there could be bad practices like hoarding in order to sell them at higher prices, and that’s why we ask for solidarity,” said Tedros Adhanom Ghebreyesus, WHO Director-General. “Demand is up to 100 times higher than normal and prices are up to 20 times higher.”

As of today, there are over 79,157 cases and 2, 470 deaths of coronavirus globally: As the disease keeps spreading to other countries, the need for facemask keeps multiplying. Thailand has banned the export of facemask so as to use the little it has to protect its citizens.

The situation has created opportunity for Africans, since it’s the only continent free from the virus, and the price of facemasks has quadrupled in a short time. Nigerians are stocking and exporting at high figures. There was a story of a Nigerian store owner who made millions of naira with his last stock of a few cartons.

In Kenya, it is becoming more serious than anywhere else in Africa. Chinese middlemen are stockpiling face masks from Kenya and Tanzania for export to China. The price of a 50-pack box of mask was $2 before the outbreak but now sells for about $15.

Quartz reported a hectic scene of Chinese customers struggling to place orders for facemasks and thermometer guns. The authenticity has to be confirmed via video through WeChat groups’ video for buyers in China who desperately need it. Once the three-part authenticity test – “burn, water and layer” is successfully carried out, a deal for supply has been made.

The Chinese government said it could only produce 20 million facemasks daily, which is half of what is needed on the daily in the highly populated country.

The factories in Nairobi are struggling to meet the increasing demands, increasing their work schedule from 24 hour/day five-day/week to 24 hour/day six days a week. But it’s not enough, and the factories are running out of cotton materials needed to make the masks. The depletion of cotton has slowed down production and pushed the Chinese merchants to look elsewhere in neighboring Tanzania for additional supply.

The facemask is not the only thing in demand; the thermometer gun has become an item of high demand also. Kenyan exporters said some are made in the country while some were imported from China and have to be exported back to China. The price has significantly increased also. Before the outbreak of coronavirus, the thermometer gun was sold for about $25 but has jumped to around $35 right now.

The demand for facemask, thermometer gun, gowns and gloves has gone up also around the world. In the UK, Thailand and Indonesia, the price has gone up tenfold and the countries are discouraging the export of any of the items in readiness for a possible escalation of COVID-19.

China has ordered 200 million facemasks from Egypt, the only African country that has had a worrisome suspected case of coronavirus though it later proved negative. But the authorities said they are going to prioritize local demand in case of a possible outbreak.

The WHO has advised on balancing supplies in anticipation of an outbreak. That way, every country will show its readiness to contain the disease and provide the needed supplies when it is time.

“We call on countries and companies to work with WHO to ensure fair and rational use of supplies and the rebalancing of the market. We all have a part to play in keeping each other safe,” said Tedros.

While the African Union in collaboration with WHO has intensified checks at the ports of entry, there is fear that Africa is not prepared in terms of supplies in case the virus hits the continent. The way Nigeria, Kenya and some other African countries are pushing the export of coronavirus preventive tools not minding a possible outbreak, the continent seems utterly vulnerable.

Update – Feb 27,2020: Africa needs a strategy; most other regions have.

In a sign of how serious the global crisis is becoming—new infections outside China now outnumber those within—Saudi authorities are blocking foreigners from coming into the country for pilgrimage or tourism purposes. That means Muslims from outside Saudi Arabia are unable to visit the Prophet’s Mosque in Medina or perform the ‘Umrah pilgrimage to Mecca. In Japan, Prime Minister Shinzo Abe has told all schools to close for a month, from Monday. And Israel is taking the extraordinary step of banning all foreign travelers entering the country from Italy (Fortune)

Share this post

Post Comment