Introduction

This report contains a brief overview of the situation around COVID-19 for the 24 respective countries that form the East and Southern Africa (ESA) region. The update – the eleventh of its kind – covers the period of January to March 2022. As has become the case lately, it is almost impossible to report on any matter without mentioning the impact of COVID-19. As 2022 has commenced, this remains the case, although the effects of the virus on our daily lives are starting to abate. According to the African Development Bank’s latest economic outlook report for the East African region, economic growth is expected to recover to an average of 4.9% in 2022, which comes as a continued welcome boost after the massive economic effect of 2020.

In January 2022, the World Health Organization (WHO) encouraged member states to continue to take a risk-based approach to mass gatherings by evaluating, mitigating, and communicating possible risks. Furthermore, member states were advised to lift or ease international traffic bans as they do not provide added value and merely contribute to economic and social stress. Member states were further encouraged not to require proof of vaccination against COVID-19 for international travel and instead opt for a risk-based approach. International organizations have echoed these provisions, such as the International Air Transport Association (IATA).

The WHO continues to reiterate that mass vaccination remains our best bet to return to normal. Between January and March 2022, Africa’s COVID-19 vaccine uptake rose by 15% as several countries embarked on mass vaccination drives. Of the 714 million doses received, 435 million (or 61%) have been administered. To date twenty-one, African countries have fully vaccinated between 10% and 19% of their populations. Five countries have fully vaccinated between 40% and 69% of their people. Only Mauritius and Seychelles have surpassed 70% vaccination coverage. This situation leaves fifteen countries yet to reach 10% of their population fully vaccinated. Although, we have not yet addressed the inequities in access to critical life-saving tools. These include specifically access to vaccines in the fight against the disease among many communities and countries that need them most.

The so-called “shared” COVID-19 doses and donated doses accounted for 60% of the doses COVAX delivered (543 million out of 910 million). Unfortunately, the COVAX Facility’s procurement had its shortcomings, and the donations failed terribly to compensate for them. As a result, COVAX delivered less than half of the 2 billion doses it initially aimed to provide in 2021. Furthermore, 30% of the donated doses were delivered through bilateral agreements rather than COVAX. For example, AVAT (African Vaccine Acquisition Trust) managed to supply 45.5 million doses to 41 countries.

The continued lack of access to COVID-19 vaccine supplies, unique African economic and social challenges, and the recent Russia-Ukraine supply chain shock is expected to negatively affect initial growth projections for the East and Southern African region. These challenges call for strong leadership and effective policy interventions.

Concerning trade, the international maritime sector continues to be hampered by port congestion, poor schedule reliability, ongoing issues with port efficiency, and accompanying services which are yet to operate at full capacity. The knock-on effects of the global challenges – particularly in major hubs in China, the US, and Europe – are impacting our regional ports. On the other hand, air cargo continues to be a stalwart alternative to ocean freight, particularly for Africa and the Middle East region. African airlines continue to be the best-performance airlines globally. Fortunately, many existing border challenges have been alleviated for cross-border road freight, although some do remain. Consequently, the continued smooth functioning of trade will require the collective input of all parties involved.

1. Africa’s economic outlook 2022

The prolonged aftermath of the pandemic continues, as most businesses remain affected by the impact. Although we witnessed an appearance of stability in the second half of 2021, the outbreak of the highly transmissible Omicron pushed growth projections slightly backwards. According to the African Development Bank’s latest economic outlook report for the East African region, economic growth is expected to recover to an average of 4.9% in 2022. However, this growth prediction is expected to be compromised by the Russian invasion of Ukraine. The Russia-Ukraine conflict has turned out to be yet another global economic shock that is hitting the region when member countries’ policy space to respond to it is minimal to nonexistent. Most notably, increased food security concerns have resulted from surging oil and food prices that have strained commodity-importing countries such as those in the East and Southern African region. According to the International Monetary Fund (IMF), immediate policy priorities should ensure access to pricy food items and energy and manage exchange rate adjustments without exacerbating existing debt liabilities.

Considering the investment landscape in Africa, almost all sectors attracted less investment except for the information and communications technology and internet industries. As a result, Greenfield’s foreign direct investment in Africa decreased from US$ 78.4 billion in 2015-19 to US$ 32.3 billion in 2020-21. On the other hand, Greenfield’s foreign direct investment in the information and communications technology and internet industries increased from US$ 2.6 billion annually in 2015‑19 to US$ 6.2 billion in 2020‑21. This increase indicates the opportunity to transition to digital solutions critical for the continent’s ongoing strive for recovery.

Russia and Ukraine, both often referred to as the world’s breadbasket, are significant players in exporting wheat and sunflower to Africa. North Africa (Algeria, Egypt, Libya, Morocco, and Tunisia), Nigeria in West Africa, Ethiopia and Sudan in East Africa, and South Africa account for 80% of wheat imports. The ongoing invasion of Russia into Ukraine is expected to aggravate food security issues in Eastern African countries the most, especially countries such as Ethiopia, Kenya, Somalia, Sudan, and South Sudan, which are heavily reliant on food imports from Russia and Ukraine. Kenya imports roughly 67% of wheat from Russia and 22% from Ukraine. According to humanitarian groups, it has been estimated that around 6 million people in neighboring Somalia could face extreme food insecurity if the rain does not materialize in June. Costs for commodities such as wheat, gas, and oil have increased due to sanctions against Moscow limiting associated exports. Russia is one of the world’s biggest exporters of fertilizers. Unprecedented fertilizer costs threaten next year’s harvest as fewer crops are planted. The ever-present drought in Kenya had caused a 70% shortfall in crop production before the Russia-Ukraine war, which led to more than 3 million people facing acute hunger.

The challenges that the countries in East and Southern Africa are facing are manifold. Strong leadership and appropriate policy intervention are critical for development, but so is the assistance from high-income countries for access to COVID-19 vaccines and other influential institutions such as the African Development Bank. The African Development Bank’s recent East Africa Regional Integration Strategy Paper for 2018-2022 lists clear strategies for two priority areas. The priority is the development of regional infrastructure, and the second is strengthening the policy and institutional frameworks for market integration, investment, and the development of value chains.

2. Continent overview

The following section gives an overview of the recorded COVID-19 infections, deaths, and vaccine doses administered throughout Africa.

a. COVID-19 reported infections and deaths

New cases and deaths reported on the African continent dropped for nine straight weeks following the peak of the fourth wave in early January 2022 on the African continent. According to the World Health Organization, as of 31 March 2022, there have been 8 211 688 COVID-19 cases and 170 224 related deaths reported in Africa. These figures result in a CFR (Case Fatality Rate) of 2.1%. In addition, more than 7.5 million recoveries have been recorded, giving a recovery rate of 92%.

From the table below, South Africa reported the highest number of COVID-19 cases, followed by Ethiopia, Kenya, Zambia, and Algeria. However, in terms of the number of deaths reported, South Africa takes the lead, followed in linear order by Ethiopia, Algeria, Kenya, and Namibia.

Table 1: WHO – The total number of COVID-19 cases and deaths as of 31 March 2022:

Country	Total COVID-19 Cases	Total COVID-19 deaths
South Africa	3722 954	100 050
Ethiopia	469 819	7 504
Kenya	323 454	5 648
Zambia	317 031	3 967
Algeria	265 691	6 874
Botswana	263 950	2 619
Nigeria	255 468	3 142
Zimbabwe	246 525	5 446
Mozambique	255 266	2 200
Mauritius	210 343	968
Uganda	163 885	3 596
Ghana	160 971	1 445
Namibia	157 663	4 019
Rwanda	129 731	1 459
Cameroon	119 544	1 927
Angola	99 194	1 900
Democratic Republic of the Congo	86 748	1 337
Senegal	85 919	1 965
Malawi	85 664	2 626
Cote d’Ivoire	81 761	796
Eswatini	69 851	1 394
Madagascar	64 050	1 388
Mauritania	58 705	982
Cabo Verde	55 960	401
Gabon	47 586	303
Seychelles	40 486	163
Burundi	38 588	15
Togo	36 945	272
Guinea	36 459	440
Tanzania	33 815	800
Lesotho	32 910	697
Mali	30 496	728
Benin	26 595	163
Congo	24 071	385
Burkina Faso	20 858	382
South Sudan	17 297	138
Equatorial Guinea	16 000	183
Central African Republic	14 339	113
Gambia	11 989	365
Eritrea	9 728	103
Niger	8 811	308
Guinea-Bissau	8 151	170
Comoros	8 088	160
Sierra Leone	7 674	125
Liberia	7 400	294
Chad	7 310	191
Sao Tome and Principe	5 945	73

Source: WHO

b. COVID-19 vaccinations

Between January and February 2022, Africa’s COVID-19 vaccine uptake rose by 15% as several countries embarked on mass vaccination drives. Of the 714 million doses received, 435 million (or 61%) have been administered. To date twenty-one, African countries have fully vaccinated between 10% and 19% of their populations. Five countries have fully vaccinated between 40% and 69% of their people. However, only Mauritius and Seychelles have surpassed 70% vaccination coverage. This situation leaves fifteen countries yet to reach 10% of their population fully vaccinated.

Around 62 million doses were administered across the continent in February, up from 54 million doses in January. The increase of administered vaccinations in Africa was mainly driven by vaccination campaigns in populous countries, including the Democratic Republic of the Congo, Ethiopia, Kenya, and Nigeria. Furthermore, to further push for an update in COVID-19 vaccine administration in Africa, the World Health Organization (WHO), UNICEF, Gavi, the Vaccine Alliance, and partners are supporting mass vaccination drives in at least ten priority countries to reach 100 million people by the end of April 2022.

An aspiring example is the mass vaccination campaign in Ethiopia that boosted the number of doses administered by 136% between 23 January and 6 March 2022. A two-week mass vaccination drive in early February in Kenya led to an average of 200 000 people vaccinated daily compared to 70 000 daily administered vaccinations before the campaign. Without an actual vaccination campaign in Tanzania, an increase of 152% in vaccine doses was administered between January and February 2022.

Although, we have not yet addressed the inequities in access to critical life-saving tools in the fight against the disease among many communities and countries that need them most. Thanks to donor investments in the ACT-Accelerator to date, it helped slow the effect due to the spread of the virus by enabling the introduction of life-saving tools.

Figure 1: Contributions to WHO for COVID-19/ ACT-A – data as of 22 March 2022:

Source: WHO

According to the WHO, the ACT-Accelerator needs US 23.4 billion until September 2022. Of this, WHO’s funding needs are just US$ 1.59 billion, less than 7% of the total ask. This situation illustrates the urgent request to the international community to fund the remaining much-needed investment.

Close to 13.3 billion COVID-19 doses have been delivered to approximately 228 countries worldwide. Deliveries in the new year have decreased with 1.02 billion in January since December 2021 (the highest number of monthly shipments so far at 1,5 million doses) while capturing 655 million doses delivered in February. From the 13,3 billion doses, COVAX delivered 1.39 billion doses to 144 countries, including the 36% donated doses and 21% facilitated doses. AVAT (African Vaccine Acquisition Trust) delivered 45.5 million doses to 41 countries.

498.7 million doses have been donated through COVAX, and 293.1 million were facilitated through COVAX. Facilitated doses mean the costs were shared by the US Government and the COVAX Facility. A total of 336.5 million doses were donated outside of COVAX. Together, donated and facilitated doses channeled through COVAX make up 70% of global donations.  

Figure 2 below illustrates the share of people vaccinated against COVID-19 as of 31 March 2022. Seychelles, Mauritius, Rwanda, and Cape Verde administered more than 60% of their population, albeit with relatively small populations of other African countries.

Figure 2: Share of people vaccinated against COVID-19 as of 31 March 2022 -Africa:

Source: Our World in Data

The so-called “shared” COVID-19 doses (doses procured or purchased by one government but released for distribution in another jurisdiction, without direct payments being involved) and donated doses accounted for 60% of the doses COVAX delivered (543 million out of 910 million). Unfortunately, the COVAX Facility’s procurement had its shortcomings, and the donations failed terribly to compensate for them. As a result, COVAX delivered less than half of the 2 billion doses it initially aimed to deliver in 2021 (910 million in total), of which 819 million went to AMC countries (The Gavi COVAX AMC is the innovative financing instrument that supports the participation of 92 low- and middle-income economies in the COVAX Facility). This number is only a fraction of the 9.25 billion doses in 2021, and less than half of the 1,3 billion doses pledged to be donated by June 2022. The USA was by far the single largest donor of COVID-19 vaccines (41%), followed by China (12%) and Germany (11%) – refer to Figure 3. When these figures are taken together, EU countries amounted to a third of the total number of donated vaccine doses delivered in 2021.

Furthermore, 30% of the donated doses were delivered through bilateral agreements rather than COVAX. Russia, India, and China didn’t share any doses with COVAX, donating to neighbors or allies instead. China and India, for example, donated primarily to Myanmar and Bangladesh. Russia’s top three recipients were its allied countries, Belarus, Syria, and Kyrgyzstan. Similarly, Australia and a handful of EU countries, including Poland, Romania, Hungary, and Latvia, donated exclusively through bilateral agreements rather than COVAX. Japan is one of COVAX’s most prominent financial supporters (with over US$ 1 billion provided in funding to the COVAX AMC) but donated most of its doses bilaterally to South-East Asian countries.

Figure 3: Donated COVID-19 vaccine doses delivered per donor country in 2021:

Source: Globalization and Health – COVAX

The World Health Organization (WHO) set an ambitious target in September 2021 to have 70% of the global population vaccinated by mid-2022. As of March 2022, just over 3% of people in low-income countries have been vaccinated with at least one dose, compared to 60,18% in high-income countries. It is safe to say that the world is nowhere near reaching that target. The inequality of vaccine distribution has risen with the number of vaccines administered globally. Of the more than 10 billion doses delivered worldwide, only 1% have been administered in low-income countries. A new analysis by the UNDP (United Nations Development Programme) indicates that most of the vulnerable countries are found in Sub-Saharan Africa, including Burundi, the Democratic Republic of the Congo, and Chad. In these countries, less than 1% of the population is fully vaccinated.

The study further shows that an average increase in GDP of US$16.27 billion in 2021 would have been achieved if low-income countries had the same vaccination rate as high-income countries in September last year (around 54%). If vaccine equity is not dealt with soon, the consequences could be grave. Greater cooperation between countries is needed to stop the devastation of the virus.

The gap in the distribution of COVID-19 vaccines between developed and developing countries is visible in Figure 4 below. This map shows which countries have already surpassed this 70% target, those on track to meet it by mid-2022 based on recent vaccination rates, and those not on track.

Figure 4: Which countries are on track to complete the initial vaccination protocol for 70% of their population by mid-2022:

Source: Global COVID-19 Access Tracker

3. Impact on trade

a. Global Services Trade

Services trade has yet to fully recover from the pandemic-induced slump, despite surging shipping rates being one of the main drivers of the recovery. Indeed, the latest services figures from the World Trade Organization (WTO) reported a ↑25% increase in the third quarter of 2021 (services trade figures are typically reported a quarter after goods trade figures). The trend has largely followed that of goods trade, as illustrated below:

Figure 5: Services Trade (y/y percentage change)

Source: WTO-UNCTAD-ITC estimates

Digitally deliverable services (computer, financial, and business) continue to be the main drivers of growth and global transport, notably shipping. Despite the impressive rebound, the recovery remains ↓5% below levels recorded in the third quarter of 2019. The WTO notes that unequal distribution of vaccines, the emergence of new variants, and border restrictions continue to weigh on international travel. For the cumulative figures, only construction and telecommunications remain below the same period of 2019. All other sectors registered positive growth, most notably computer services at ↑34%.

On a country level, the cumulative value of services exports in January-November 2021 remained below 2019 in many economies, with the sharpest decline recorded in Australia (↓35%). In Africa, Morocco’s and Uganda’s services exports were ↓20% 20% lower than in 2019. By contrast, services exports from China increased by ↑37%. Lastly, the WTO warns that unequal distribution of vaccines, the emergence of new variants, and border restrictions continue to weigh on international travel as large tourism exporters continue to see a contraction.

b. Global Merchandise Trade

The World Trade Organization (WTO) provided an update on the prospects for the global economy, noting how the outbreak of war in Ukraine on 24 February has darkened the outlook. Consequently, WTO economists reassess their projections for world trade over the next two years, with the headline figure predicting a merchandise trade volume growth of ↑3.0% in 2022. This prediction is below the previous forecast of ↑4.7% and ↑3.4% in 2023. Heightened economic uncertainty is evident in the estimates (as illustrated), with the WTO warning that the situation in Ukraine is the primary determinant of the current fluid situation. The World Bank predicted that the Ukrainian economy would shrink by nearly half (↓45%) in 2022.

Figure 6: Volume of world merchandise trade, 2015Q1-2023Q4 (Seasonally adjusted volume index, 2015=100)

Source: WTO

Given current GDP assumptions, merchandise trade volume growth in 2022 could be as low as 0.5% or as high as 5.5%. These projections will be updated in October, but an earlier revision could be issued if incoming data warrant it. In addition, the forecast considers higher frequency data for selected economies, including monthly statistics on container throughput of the US and Chinese ports to capture port congestion in these countries. Other main points in the publication include:

• World GDP at market exchange rates is expected to increase by ↑2.8% in 2022 after rising ↑5.7% in 2021. Output growth should increase to ↑3.2% in 2023, assuming persistent geopolitical and economic uncertainty.
• The CIS region should see a ↓12% decline in imports and a ↓7.9% drop in GDP in 2022, but exports should grow by ↑4.9% as other countries rely on Russian energy. Regional disparities may narrow due to weak import demand in Europe and Asia.
• The volume of merchandise trade rose ↑9.8% in 2021. As a result, the US$ value of this trade grew ↑26% to US$ 22.4 trillion. The value of the commercial services trade was also up ↑15% in 2021 to US$ 5.7 trillion.
• Services trade will also be affected by the conflict in Ukraine, including in the transport sector, which covers container shipping and passenger air transport.

Finally, as we frequently report, the WTO warns that the war is not the only factor weighing on world trade. For example, lockdowns in China to prevent the spread of COVID-19 are again disrupting seaborne trade at a time when supply chain pressures appeared to be easing, which could spark renewed shortages of manufacturing inputs and prolonged higher inflation as we’ve grown accustomed to. In addition, the IMF warned that global trade needs more supply diversity, not less, to combat the constant supply chain disruptions, as evidence shows that countries with trade partners that implemented more stringent lockdowns had a sharper drop in imports. Indeed, lockdowns had significant—if unintended—international spillovers. Consequently, the IMF urges a shift in patterns since, although trade flows have adjusted, more diversified global value chains could help lessen the impact of future shocks.

c. Trade and Development (UNCTAD)

The United Nations Conference for Trade and Development (UNCTAD) announced that global trade hit a record high of $28.5 trillion in 2021, as goods trade performed exceptionally strong. Indeed, in their most recent “Global Trade Update” for February, UNCTAD noted that all major trading economies saw imports and exports rise above pre-pandemic levels. However, for the fourth quarter of 2021, trade in goods increased more strongly in the developing world than in developed countries. These increases correlate to a growth of ↑25% in 2020 and ↑13% on pre-pandemic levels. Moreover, there was a strong rebound in the first half of 2021, with the recovery continuing in the third quarter (albeit slightly slower) and fourth quarter of the year. Nevertheless, despite the impressive figures, UNCTAD is cautious about trade growth in 2022, as 2021 “was largely the result of increases in commodity prices, subsiding pandemic restrictions and a strong recovery in demand due to economic stimulus packages“. On the services side, collective trade rose by $50 billion to reach $1.6 trillion, just above pre-pandemic levels.

Figure 7: Growth of global goods and services trade (percentage and US$ trillions)

Source: UNCTAD

UNCTAD expects some trade normalizations in 2022, as the trends mentioned above are likely to subside. Moreover, the IMF has recently revised its world economic growth forecast for 2022 by ↓0.5%. Furthermore, concerning international supply chains, UNCTAD, like others before, is expecting to continue existing challenges, with efforts to shorten supply chains and diversify suppliers potentially affecting global trade patterns. Finally, on the services side, trade for most major economies was still substantially lower than pre-pandemic averages of 2019, with trends likely to continue – especially with international flights yet to fully return for passengers.

d. Ocean freight industry

i. Global container throughput

Continued container throughput revival – especially in China – provides some insight into the anticipated recovery of global supply chains. With ongoing problems of global port congestion, poor schedule reliability and delayed berthing moderating, container throughput has increased by ↑1.4 points in November to 125.3. This number is according to the Container Throughput Index of RWI – Leibniz Institute for Economic Research and the Institute for Shipping Economics and Logistics (ISL). As with the previous month, the index – RWI/ISL for short – attributes the change to promising throughput increases in Chinese ports. Figure 8 shows the continued growth since the hardest lockdown of early-2020:

Figure 8: RWI/ISL Container throughput index (2015 = 100)

Source: RWI/ISL

As noted above, the major contributor to the increase has been the continued strong performance of Chinese ports, as the Chinese index rose from 130.3 to 134.9. For Europe, the North Range Index rose, increasing from 112.1 (revised) in October to 113.9 in November. Despite the overall increase of the RWI/ISL, the rapid spread of the Omicron variant is expected to put a renewed strain on container throughput. In addition, the potential effects of further port closures – which have already occurred in China – can further impact container throughput.

In summary, with throughput predicted to grow at a healthy rate in the coming period, hopes of a return to some form of normality in global supply chains after the Chinese New Year in February have been dashed by analysts. As a result, Drewry and MSI now do not expect the supply chain crisis underpinning elevated freight rates across several trade lanes to normalize before the end of next year.

ii. Global freight rates

The global liner shipping industry continues to react to this sudden drop in demand, as Drewry’s “World Container Index” fell again sharply at the end of March, down by ↓4.1% (or $361) to $8 471 per 40-ft container. The change is a continuation of last week, as poor reliability, increased fuel prices, and deep mistrust by shippers has spilt over into the spot prices. These same factors have had a marked impact on longer-term contracts. Once much desired by shipping lines, the appetite for long–term relationships has waned with the onset of war. Moreover, ocean carriers are now canvassing smaller shippers and SMEs to agree on short-term three-month contracts to counter the plunge in spot rates. Furthermore, the nearly fully-replenished retail stock inventories – especially in the US – have also curbed shipping demand, as most retailers are back to pre-pandemic stock levels. The following image shows the one-year spot rates, finally offering some relief as far as beneficial cargo owners are concerned:

Figure 9: World Container Index – assessed by Drewry ($ per 40 ft. container)

Source: Drewry Ports and Terminal insights

Despite the recent decrease in rates, the situation with which shippers have had to contend since the pandemic outbreak has been staggering, considering spot rates are now over four times higher than pre-pandemic levels when spot rates were trading around $1 500. There are, of course, two sides to the story, as shipping lines have endured long periods of poor financial returns, whilst shippers, cargo owners and intermediaries have moved goods on the cheap. The situation is moderating, but some educated estimates are that the current volatile market trends could only stabilize by 2024. Furthermore, container rates may only decline by around 40% in the next decade, meaning a new baseline will undoubtedly be set.

iii. The current state of the global shipping industry – and the effect of Russia’s invasion of Ukraine

According to the latest figures for November, global schedule reliability remains desperately low. Fortunately, however, the average delay time has continued its ongoing improvement. According to the monthly “Global Liner Performance” report by Sea Intelligence, schedule reliability declined m/m by ↓0.6% to 33.6% in November, thus remaining in the 33%-40% range that the metric has occupied for much of 2021. Annually, reliability has dropped by ↓16.4% when compared to November 2020. The accompanying metric – global average delays for late vessel arrivals – now stands at 6.93 days, as it continues its expected decline.  

On a carrier level, Maersk was once again the most reliable top-14 carrier in November 2021, with a schedule reliability of 46.3%, followed by Hamburg Süd with 40.4%. Of the other twelve carriers, MSC operated within the 30%-40% range, with five carriers in the 20%-30% range, six others under 20%, with Evergreen in the rear, operating at a paltry 11.8% reliability.

Figure 10: Russia: ship departures bound for international ports

Source: Lloyd’s List Intelligence

In the three weeks ending 24 February — the day the invasion started — 885 vessels departed Russian ports. That compares with 579 departures over the three weeks ending 16 March. The increase in commodity prices can be seen concomitant with the drop in outgoing vessels in these sectors, as grain and coal exports are most affected, with 21 outbound bulk carrier sailings for the seven days ending 16 March, down ↓72% compared with 75 bulk carriers departing the week before the invasion. The situation is similar with air cargo, as there is a considerable reduction in air traffic in and around Russia and Ukraine.

Sailing schedules, in general, continue to be adjusted, with blank sailings remaining at all-time highs. Between weeks 13 and 16, the blank sailings are out of 576 scheduled sailings, representing an 8% cancellation rate. During this period, 75% of the blank sailings will occur in the Transpacific Eastbound trade, mainly to the West Coast. The knock-on effects will undoubtedly be felt on continental services, as African ports are often the first ones to be omitted on schedules, not to mention that African ports do not enjoy exceptionally high liner connectivity, according to the World Bank.

e. Airfreight industry

i. Air Cargo Chartbook

IATA released their latest “Air Cargo Chartbook” for Q1 2022, reporting a softening of air cargo growth in the three months to January. Industry-wide cargo tonne-kilometres (CTKs) rose ↑7.2% y/y but were weaker than the previous three-month period (↑16.0%). The following side-by-side figures showcase the cargo levels for the industry over a three-month rolling period and the cargo growth rates over the last five years:

Figure 11: CTK levels (billions per 3-month rolling period) and cargo growth rate (CTKs %)

Source:  IATA

Although air cargo has continued to be a saving grace for global trade throughout the pandemic, it appears as if a turning point has been reached. Despite the growth for the last three months, the seasonally adjusted CTKs fell by ↓0.7% q/q, partly due to a weak month of January. Although much of the growth has been driven by the return of capacity, IATA further notes that seasonally adjusted capacity has softened lately, partly due to the impact of Omicron in January 2022.

ii. State of the Region: Africa and the Middle East:

On Friday, 25 March, IATA released the latest “State of the Region: Africa and the Middle East” for March. Although there has been a decreasing trend in global air cargo volumes (growth slowed to ↑5.1% in January, from ↑9.8% in December), Africa continues to lead the way. Indeed, carriers registered in Africa were the best performers, with CTKs rising from ↑4.5% to ↑22.2% above 2019 levels between December and January. Figure 12 shows all regions’ performance:

Figure 12: Growth in cargo volumes by region (CTKs, % change versus the same month in 2019)

Source:  IATA

However, IATA notes that this remarkable improvement can be partly attributed to the base effect from the comparison with 2019. Revealingly, seasonally adjusted CTKs rose by a modest ↑4.0% m/m. Besides the trends in air cargo, passenger numbers continue to be low, as global air travel started the year on a soft note. In addition, the Omicron wave negatively impacted it, which led to thousands of flight cancellations and weighed on peoples’ willingness to travel. As a result, industry-wide passenger-kilometres are (RPK) fell by ↓49.6% in January 2022 versus January 2019, after a ↓45.2% decline in December 2021 versus December 2019. For Africa, the current RPKs stand at ↓58.6%.

iii. The impact of the conflict between Russia and Ukraine on aviation

Figure 13: Passenger ticket sales (7-day moving average in % change versus 2019)

Source:  IATA

The week starting 24 February saw bookings decline by ↓8% compared to the week prior. This decline could be observed in domestic and international bookings at ↓8% and ↓9% respectively. Domestic travel was affected in Russia and Ukraine. However, IATA notes that some reduction in domestic demand can be attributed to the seasonal decrease in Chinese domestic travel after the New Year holidays. The decline was sharper in the wider Europe region, where there were ↓14% fewer bookings made the week when the conflict broke out. The most significant drops in demand could be observed for travel to and from Eastern European countries. Ukraine and Moldova both closed their air space completely and saw negative net bookings (more refunds than new ticket sales) that week. Russia also closed its air space to certain countries’ carriers, and their bookings declined by ↓52%.

f. Road freight industry

Some insightful geofencing data captured by the Federation of East and Southern African Road Transport Associations (FERSATA) investigates the cross-border delays and associated costs experienced at several regional border posts. It is important to note that only certain SADC borders are currently included in the analysis.

The following graph summarises the recent cross-border queue times and transit times of certain SADC border posts. Kasumbalesa, Beitbridge, Groblersbrug and Shesheke border posts show the highest queueing time.

Figure 14: Cross border delays in some selected SADC border posts (in hours)

Source: TLC & FESARTA.

Figure 15 illustrates a similar picture to those above, this time from a corridor perspective. Trans Caprivi (in Namibia) shows the longest cross-border travel time against zero queue time from a corridor perspective. The North-South Corridor (South Africa – Gaborone – Zambia – DRC) shows both long cross border transit times and long queue times.

Figure 15: Cross border delays in some selected SADC trade corridors (in hours)

Source: TLC & FESARTA

A delay is considered when either the cross-border queue times or cross-border transit times exceed two hours. The graphs above indicate that the various border-crossings and trade corridors have recently experienced cross-border transit delays, especially cargo moving through the North-South, Maputo, and Trans Kalahari trade corridors. The industry has voiced poor efficiency from government agencies, runners and clearing agents not working at night as the main drivers of the delays. The following section provides an overview of developments at respective border posts.

i. Developments at the Beitbridge border post

Following the recent developments at Beitbridge revolving around the ZIMBORDERS access fee of US$ 175 and general congestion, the general sentiment has circulated that Beitbridge is quiet and efficient. Therefore, it is worth putting this sentiment into perspective. A worthwhile exercise would be to compare the status quo at Beitbridge to the brand-new double lane bridge and two newly constructed OSBP facilities at Kazungula. Beitbridge is currently processing 890 trucks per day on average over the last month of November in around 12 hours. At the same time, Kazungula is processing 200 trucks per day in 24 hours plus. Since the new bridge and OSBPs were opened in May of this year, Kazungula has seen a ↑54% in truck volumes per day (130 to 200 trucks). This change only accounts for an additional 70 trucks per day. On the other hand, Beitbridge has dropped in numbers from 943 trucks in 2020 to 890 per day. However, this change is only a drop of ↓5.6% (or 53 trucks per day).

Therefore, it will be apparent that these numbers do not support the theory and assumptions being made that Beitbridge is quiet and efficient because transporters have moved to Groblersbrug to avoid paying the new ZIMBORDERS access fees. Instead, it means that Beitbridge, due to the new ZIMBORDERS development on the Zimbabwean side, has made the border far more efficient, and we expect that by around November 2022. Then, hopefully, we will see a world-class, state-of-the-art facility there and one well above anything on offer anywhere else in Africa.

ii. Developments at the Lebombo border post

Humanitarian issues and extensive delays at the Lebombo border post reached media headlines in early December 2021. Extensive delays and related problems (exacerbated by zero ablution facilities) have been piling up since August 2021. The queue of trucks between Komatipoort and Lebombo ranged from between seven and fifteen kilometers long. These issues are because the border post is not operating 24 hours and needs to absorb huge volumes of trucks, from 800 to 1200 on any given day. As a temporary solution to ease congestion in Mozambique during the festive season, on 9 December 2021, the department of home affairs in South Africa announced that the Lebombo border post would be operating 24 hours a day for truck drivers only. The arrangement ended until 10 January 2022.

iii. Developments of foreign truck drivers in South Africa

In April 2021, an amendment to the South African Road Traffic Act regulations was published, which includes a provision that a professional driving permit issued by a foreign country will only be acceptable in South Africa if it relates to a vehicle registered in that specific country. That means that any foreign truck driver with a foreign professional driving permit will not be able to drive a South African registered vehicle. The N10 near Middleburg in the Eastern Cape was blockaded by national protestors in October. Again, on 3 December, the N3 freeway in KwaZulu-Natal was blockaded. Dozens of trucks have been looted and set alight and drivers injured in the past two years, with foreign drivers claiming they were being intimidated. These amendments are still before parliament and are opposed by FESARTA (The Federation of East and Southern African Road Transport Association). However, the matter remains a contentious issue for both foreign and local drivers, as South African drivers are now reluctant to travel across the border for fear of retaliation.

iv. Developments at the Kasumbalesa border post

March saw a significant upswing in queue times for Kasumbalesa in both directions. In addition, renovations to the parking area have added more waiting times to an already lengthy exercise. With queue times of more than 190 hours, and crossing times more than 50 hours, delays might be expected or at least until the Parking area is completed. Indeed, transporters have sent reports of terrible conditions faced by the drivers, with no ablution facilities, no security, severe fatigue, and widespread theft, to name but a few concerns. In addition, the road between Mokambo and Mufulira is fast becoming impassable, with trucks getting stuck and other vehicles also being damaged daily. Fesarta has engaged with ZRA on this subject.

v. Developments at the Chirundu border post

Chirundu has been relatively quiet of late other than issues on 8 March saw ZRA at Chirundu unable to generate T1s, which created quite a backlog. Unfortunately, an ongoing concern revolves around the road conditions from Chirundu to Lusaka, which is terrible. The situation is much like the one at other borders in the region, such as Mokambo, Nakonde, and the like.

vi. Developments at the Mokambo border post

In the last days of March and continuing into April, there was an ongoing issue with the roads leading to the Mokambo border between DRC and Zambia. As mentioned above, the road is in the state that it is, and with the rainy season almost in full swing, the route has become almost entirely impassable. Consequently, trucks get stuck daily. Fortunately, funds have been set aside for the repair of the road, but no date has been set yet. Unfortunately, however, there will not be a complete rebuild of the road, which will likely only result in a temporary solution for an estimated six months, according to transporters frequently traversing the route.

4. ESA Covid-19 statistics

Africa, the second largest continent globally in both area and population, faces challenges posed by political tensions, severe poverty, terrorism, damages due to floods, and deadly diseases. In addition, residents are left vulnerable to the virus due to limited vaccine supplies and other resources. The East and Southern Africa region accounted for approximately 56% of Africa’s population.

Figure 16: East and Southern Africa’s share in Africa’s total Covid-19 cases

Source: WHO

The ESA region’s percentage of total African infections has declined since the end of January 2021, but this picked up slightly after May 2021, when the third wave of infections hit most African countries. Again, a slight dip in the number of positive cases in July 2021, against an incline since the beginning of September 2021, was recorded. Notable also is the steady increase in the number of positive cases in the ESA region towards the end of 2021. Unfortunately, the total number of COVID-19 cases for October 2021 is unavailable. Once again, as seen below, South Africa, Ethiopia, and Kenya lead the greatest number of Covid-19 cases in the ESA region. South Africa accounts for most Covid-19 cases, with over 3.31 million positive cases reported at the time of writing. Ethiopia is steadily following with over 376 375 positive cases, and Kenya has over 263 707 positive cases.

Figure 17: Distribution of infections across the East and Southern Africa Region

5. Vaccine roll-out recommendations

The Independent Allocation of Vaccines Group (IAVG) issued recommendations to allocate COVID-19 vaccines more equitable and more effective. This group was formed a year ago to validate vaccine allocations recommended by WHO’s and Gavi’s Joint Allocation Taskforce (JAT) of COVAX. Initially, it was envisioned that COVAX would be the global primary distributor of COVID-19 vaccines, while the IAVG would operate as an independent referee. Although, rich nations started hoarding doses for their populations and cutting deals directly with low-and middle-income countries. Unfortunately, this situation acted against the Strategy to Achieve Global COVID-29 vaccination by Mid-2022 in October 2021. In response, the IAVG is calling for:

• Achieving 70% coverage with COVID-19 vaccines in all countries is a global imperative. Vaccine-producing manufacturers and high-coverage countries must prioritize vaccine equity and transparency, sharing information about manufacturing capacity and supply schedules and vaccine access plans with COVAX.
• All countries are further encouraged to work with COVAX with considerable urgency to optimize the strategic use of the growing vaccine supply. This approach relates to high-coverage countries that must establish a “dual-track” process that considers both domestic and international goals. The IAVG further recommends that COVAX continue to work with all manufacturers to increase the availability and uptake of vaccines to vulnerable populations.
• All countries should strive to have a steady and predictable supply of COVID-19 vaccine supplies aligned with the unique needs of each country. In addition, further attention should be given to addressing prohibitive challenges in countries that request support, such as vaccine storage, distribution, administration, and record-keeping. Finally, concerted global, national and local leadership is crucial to address vaccine misinformation and further the demand for COVID-19 vaccines.

On 13 January 2022, the tenth meeting of the Emergency Committee convened by the WHO Director-General under the International Health Regulations (2005) (IHR) regarding the coronavirus disease (COVID-19) pandemic took place, and the following suggestions were made regarding international travel, transport, and mass gatherings:

• Member countries are encouraged to continue using evidence-informed public health and social measures, therapeutics, diagnostics, and vaccines for COVID-19 and share response experiences with WHO. In addition, response strategies need to be regularly updated.
• Member countries are encouraged to take a risk-based approach to mass gatherings by evaluating, mitigating, and communicating possible risks.
• Member countries are encouraged to achieve the WHO target of having at least 70% of all countries’ populations vaccinated by July 2022 and integrate COVID-19 vaccination into routine health. States Parties are requested to share vaccine doses to increase global equity and prioritize those at highest risk from COVID-19. States Parties are also advised to assess enablers and barriers to vaccination.
• Member states are encouraged to enhance surveillance of SARS-CoV-2 and report to WHO to enable rapid identification, tracking, and evaluation of variants and continued monitoring of the pandemic’s evolution and control.
• Member states are advised to lift or ease international traffic bans as they do not provide added value and merely contribute to economic and social stress. Member states are further encouraged not to require proof of vaccination against COVID-19 for international travel and should instead opt for a risk-based approach.
• Member states are also further advised to recognize all vaccines that have received WHO Emergency Use Listing and all heterologous vaccine combinations as per SAGE recommendations (The Strategic Advisory Group of Experts on Immunization), including in the context of international travel.

6. Economic recovery recommendations for African countries

a. African Union and the OECD Development Centre

In the new edition of Africa’s Development Dynamics 2022, policy recommendations are based on lessons learned and best practices from Central, East, North, West, and Southern Africa. The following section will point out how developing regional value chains can help African countries rebound from the socio-economic shocks of the pandemic and accelerate growth.

i. Developing regional value chains will support a sustainable recovery of their economic recovery

Strengthening African countries’ productive systems is vital to their economic recovery. The COVID-19 pandemic is pulling Africa backwards to “catching up” with the rest of the world. It is essential to consider that the health and economic crises mutually reinforce each other, which means that vaccination programs must accelerate. Unfortunately, most African countries have little fiscal space to offset some of the pandemic’s effects. Furthermore, production constraints limit African producers’ ability to benefit from the rebound in global demand. Accelerating productive transformation will create quality jobs, reduce poverty, and strengthen Africa’s economic resilience. In addition, building the capacity to manufacture pharmaceutical products and produce food locally can help support these countries’ vulnerability.

Rolling out the AfCFTA (African Continental Free Trade Agreement) can help develop these regional value chains and accelerate transformation. This agreement provides various new opportunities for better integration. Furthermore, regional value chains can help Africa become more integrated into global value chains and help facilitate transformation. Improved physical, social, and institutional resources within the trading environment could help develop production capabilities that enable businesses to access and retain more demanding markets successfully. Also, strengthening regional production capabilities can improve backward participation in value chains and create more jobs.

ii. Regional policies are essential for expanding regional production networks:

Rising intra-African trade costs impede regional production networks. According to the World Bank trade costs database, it has been estimated that the costs of trade throughout Africa have increased to 2007 levels, despite a considerable decline in intra-African tariffs. This increase is detrimental to production networks as it compounds every time the product crosses international borders. These costs relate to poor infrastructure, weak trade-related services, and non-tariff barriers.

Furthermore, policy support is critical for African firms to improve their competitiveness, create links in local economies, and overcome barriers to investment. Formal institutions such as political stability, macroeconomic stability, property rights, and intellectual property rights help businesses flourish. In addition, further consideration should be given to the risks borne from international production networks, which call for careful policy attention. Also of importance is ensuring African countries address environmental challenges alongside development. Finally, better mobilizing domestic resources is vital to ensure policy implementation. For example, tax administration reforms are necessary at a national level to mobilize domestic resources and combat illicit financial flows.

iii. Policymakers must work with the private sector to develop regional production networks

Public-private alliances in the digital economy can help reduce the costs of regional production and trade. In addition, digital innovations within the supply chain environment increase the efficiency of logistics, customs, and finance. For example, distributed ledger technology (blockchains) allows for more efficient cross-border payments and trade finance by creating smart contracts. Public-private alliances are also crucial to developing Internet infrastructure and providing accommodative regulations for cross-border data flows. Building the infrastructure to connect national digital markets can facilitate economies of scale, attract investment, and increase competitiveness.  

Furthermore, national industrial policies need to adapt to the new environment provided by the AfCFTA. It is critical to tailor skills policies to technical needs and the emerging trends to attract investment and increase linkages with lead firms. Upskilling will be vital in meeting a new requirement for Africa’s digital and green transformation sector-specific needs. Further harmonizing domestic investment legislation could help reconcile the continent’s fragmented investment environment and boost intra-African investments by 14% compared to 2018. Finally, it is critical to note that Africa’s existing networks of industrial clusters provide a vital entry point for developing infrastructure and promoting further investment.

Conclusion

East and Southern African countries face unique and acute social and economic challenges that are expected to counter initial growth projections for 2022. The effects of the COVID-19 pandemic are far from over. Moreover, these effects have been exacerbated by the lack of access to COVID-19 vaccines and life-saving tools that still lingers among low-income countries such as those in Africa. Food scarcity due to the Russia-Ukraine conflict is now only feeding the challenges. East and South African countries should continue to focus on accelerating vaccination programs to spur an economic revival and further development. Strong leadership is critical – as are effective regional policies allowing market integration and investment. Furthermore, the public sector should take hands with private sector representatives to build regional production networks and adjust to the trading environment created under the AfCFTA.

For trade in the region, the pandemic continues to impact cross-border flows. Therefore, if we are to have any hope of recovering lost ground, we need to drive growth and investment in our region’s ports, roads, and border posts. In addition, we need to ramp up our infrastructure upgrades and improve our logistics performance and efficiency. With the AfCFTA, Africa’s time is now; however, we need to grasp it collectively. The responsibilities do not rest only with one stakeholder but will require the collective input of all involved. These include customs authorities, port authorities, the shipping lines, private transporters, OGAs, freight and clearing agents, and all other parties involved. And it will have to include many facets of customs and trade-related matters in the region. Therefore, the RPSG collectively emphasizes the need for positive change in many areas in the region. These include uptake of the AEO program, trade digitalization (single windows and one-stop border posts), bond and transit guarantee and regional transport systems. Ultimately, we need to harmonize and simplify trade to enable a better compliant, safe, and secure trading environment.