ESA COVID-19 situation report – Fourth Quarter 2021

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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 tenth of its kind – covers the period of October to December 2021. As has become the case lately, it is almost impossible to report on any matter without mentioning the prolonged impact of COVID-19. As 2021 continued and ended, this remains the case with the discovery of the Omicron variant. According to the AfDB’s (AfDB) latest economic outlook report for the East African region, economic growth is expected to recover to an average of ↑4.1% in 2021. This revised figure is a 0.4% improvement from the expected forecast in 2020.

As most countries in the ESA Region have experienced the fourth wave, air travel and land borders have fortunately remained open, which has been crucial for business and economic recovery. This sign of continental (and indeed global) solidarity might also signify the transition of the COVID-19 pandemic to an endemic. Nevertheless, despite initial evidence of the mutation being less severe, we still expect the virus to continue to circulate, but with less COVID-19 related hospitalization and deaths. Indeed, slowly but surely, we are getting herd immunity, either naturally or via vaccination.

Nevertheless, as the pandemic continues to impact everyone, the matter of equal access to vaccines in Africa remains a contentious issue. Collectively, only about 8% of the African population are fully vaccinated, compared with more than 60% in many high-income countries. This situation remains one of grave concern, as herd immunity continues to be our best bet at returning to some level of normalcy. Unfortunately, lingering under-investment in COVAX and AVATT, in terms of doses and funds, and further stockpiling of vaccine doses in wealthy nations for boosters, have continued to starve these initiatives of supplies to distribute to those most in need. This situation will have a long-lasting effect on the economic growth of developing countries and pose a global risk for the possible resurgence of new COVID-19 variants. Unfortunately, without the possibility of developing countries becoming self-sufficient in COVID-19 vaccine supplies, the struggle to reach complete vaccination is expected to last long after 2022.

1. Effects of COVID-19 on Southern and Eastern Africa

According to the AfDB’s latest economic outlook report for the East African region, economic growth is expected to recover to an average of ↑4.1% in 2021. This revised figure is a 0.4% improvement from the expected forecast in 2020. For 2022, the AfDB predicts an average growth rate of ↑4.9% for the region. For Sub-Saharan Africa, the International Monetary Fund (IMF) predicts a growth rate of ↑4.0% for 2021, ↑3.7% for 2022, and ↑4.0% for 2023. The rapid recovery of the region – at least for East Africa – stems from sustained public spending on infrastructure, improved performance of the agricultural sector, and the deepening of regional economic integration. In addition, swift policy responses to counter the pandemic’s impact and promote economic diversification further spurred growth in the region.

East Africa is experiencing an economic transformation from mainly agriculture-based activities to more service-orientated endeavors. Unfortunately, the IMF notes that rising food prices have contributed to higher inflation in sub-Saharan Africa. Nevertheless, it has been pointed out that the structural transformation needed to transition to higher value-added activities has been slow. In that effect, some countries have been experiencing deindustrialization. Countries such as the Seychelles and Mauritius, heavily dependent on tourism, were impacted the most by COVID-19 restrictions. On the other hand, relatively more diversified countries, such as Ethiopia and Kenya, were more resilient during and after the pandemic. Tanzania, a commodity exporter, was able to gain from rising commodity prices, even though they are vulnerable to sudden price fluctuations.

Debt conditions in Eastern Africa worsened due to slow growth, emergency spending, and exchange rate depreciation. External financing conditions fueled exchange rate depreciations together with higher bond yields. In addition, the COVID-19 pandemic exacerbated the already heightened public debt and fiscal deficits due to past public investments in hard infrastructure. As a result, the region’s fiscal space has narrowed, and repayment constraints are expected to tighten, prompting signals of widespread debt distress in the years to come.

As expected, the pandemic left long-lasting effects on the most vulnerable people. The share of East Africans living in deplorable conditions rose to 35% in 2021, equivalent to 134.3 million people. It is estimated that 3.4% (12.3 million people) of the region’s population in 2019 drifted into severe poverty due to COVID-19 and its aftershock.

In addition to the direct effects of the pandemic on social – and economic growth, the aftershocks, including the collapse and subsequent surge in consumer demand, driven explicitly by the developed nations, a dramatic decline in schedule reliability in regional and international supply chains, the subsequent lack of shipping equipment and the misalignment in incorporating health protocols with operating procedures, have left many African countries struggling to keep up in the past year. This situation is highlighted by the continent’s severe dependency on trade with the rest of the world.

It is, however, important that developing countries assess the successes and the losses during and post-pandemic to align themselves with strategies for future economic growth. Unfortunately, most African countries are still far behind in moving forward post-pandemic. The main reason is the lack of access to COVID-19 vaccinations. If the continent does not become self-sufficient in terms of COVID-19 medications, ongoing challenges and setbacks are to be expected.

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

According to the World Health Organization (WHO), by the end of December 2021, Africa recorded nearly 7 million COVID-19 cases, with some 154 820 regrettably losing their lives to the virus. New reported COVID-19 cases in the African region increased significantly from the end of November until the last week of December 2021. The numbers started to fall at the end of December 2021, signaling a possible flattening of Africa’s fourth wave, driven primarily by the Omicron variant. From the table below, South Africa reported the highest number of COVID-19 cases, followed by Ethiopia, Kenya, Nigeria, and Zambia. In terms of the number of deaths reported, South Africa takes the lead, followed in linear order by Ethiopia, Algeria, Kenya, and Zimbabwe.

Table 1: WHO – The total number of COVID-19 cases, deaths, and recovered cases as of 19 December 2021:

Country
COVID-19 Cases
COVID-19 deaths
COVID-19 Recovered Cases
South Africa
3 413 540
90 814
3 111 957
Ethiopia
398 696
6 898
352 987
Kenya
282 554
5 361
249 996
Nigeria
237 561
3 022
212 550
Zambia
233 120
3 702
211 473
Algeria
216 637
6 238
148 985
Botswana
208 994
2 427
195 479
Zimbabwe
204 351
4 891
162 211
Mozambique
171 502
1 968
151 305
Namibia
144 629
3 608
128 570
Ghana
136 436
1 274
130 050
Uganda
135 091
3 280
98 207
Cameroon
108 451
1 851
105 757
Rwanda
105 027
1 347
99 837
Senegal
74 412
1 890
72 317
Democratic Republic of the Congo
72 349
1 205
57 579
Angola
71 142
1 746
63 995
Malawi
71 007
2 332
59 567
Mauritius
66 929
762
63 639
Eswatini
64 443
1 277
54 943
Cote d’Ivoire
63 847
707
61 245
Madagascar
47 295
996
43 961
Mauritania
40 504
862
38 984
Cabo Verde
39 072
352
38 172
Gabon
38 870
287
36 472
Guinea
31 117
389
29 803
Togo
28 268
246
26 052
Lesotho
28 126
665
14 933
Tanzania
26 483
734
180
Burundi
26 224
14
22 868
Benin
24 935
161
24 736
Seychelles
24 412
126
23 934
Congo
20 089
367
18 512
Mali
20 080
654
17 961
Burkina Faso
17 040
317
16 250
South Sudan
14 843
135
12 789
Equatorial Guinea
13 630
175
13 410
Central African Republic
12 163
101
11 318
Gambia
10 136
342
9 694
Eritrea
7 886
73
7 658
Niger
7 271
274
6 881
Sierra Leone
6 659
123
4 425
Guinea-Bissau
6 466
149
6 299
Liberia
6 228
287
5 559
Comoros
5 729
153
4 441
Chad
5 703
181
4 874
Sao Tome and Principe
3 758
57
3 676

Source: WHO

Concerning the region, ESA accounts for approximately 56% of Africa’s population and continues to be left vulnerable to the virus due to limited vaccine supplies and other resources. The following figure shows the spread of the virus in the region.

Figure 1: East and Southern Africa’s share in Africa’s total Covid-19 cases

The ESA region’s percentage of 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 the month of 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 2: Distribution of infections across the East and Southern Africa Region

b. COVID-19 vaccinations

All but one of Africa’s 54 nations are administering COVID-19 vaccines, and the continent has received almost 250 million doses. But, worryingly, only 3% of the nearly 8 billion doses distributed globally have been administered in Africa. In addition, only about 8% of the African population are fully vaccinated, compared with more than 60% in many high-income countries.

According to WHO, countries in the south of the continent are doing considerably better in meeting complete vaccination goals. As of 30 December 2021, about half of African countries had achieved vaccination of more than 10% of their population. However, some of the largest countries have only managed to vaccinate less than 5% of their people. For example, Ethiopia fully vaccinated 3.5%, Nigeria 2.1%, and the Democratic Republic of the Congo 0.1% of their populations. Eritrea is the only country that has not yet begun with a vaccination drive.

The map below illustrates the top African countries regarding the number of COVID-19 vaccine doses administered per 100 people. All doses, including boosters, are counted individually. As the same person may receive more than one dose, the number of doses per 100 people can be higher than 100. Since quarter three, there has been a significant improvement in the number of vaccines administered across all top ten countries. Also, the top ten countries remained the same, with some countries outperforming the other only slightly. This situation could be affected by the time-lapse in which certain countries reported their updated figures.

Figure 3: The top 10 countries measured by the number of Covid-19 vaccine doses per 100 people in Africa as of 31 December 2021:

Source: Our World in Data

It has become evident that global efforts to permit fair access to the COVID-19 vaccine among developed and emerging countries have failed quite severely. The sad reality is that certain pharmaceutical corporations have been reaping astronomical profits by creating an artificial supply crisis. In contrast, low-and middle-income countries have suffered and are expected to suffer accelerating deaths. Moreover, according to “The People’s Vaccine” – a group of organizations, world leaders, and activists, there has been a significant disparity between the commitments made by four major pharmaceutical companies and or partners, namely, AstraZeneca, Johnson & Johnson, Moderna, and Pfizer, including promises made by the G7, the EU, and the reality of meeting such commitments.

According to their analysis, 49% of vaccines sold by AstraZeneca, Pfizer/BioNTech, Moderna, and Johnson & Johnson have been received by high-income countries. These countries only represent 16% of the world’s population. The EU alone managed to acquire 1.5 billion doses of COVID-19 vaccines from AstraZeneca, Pfizer/BioNTech, Moderna, and Johnson& Johnson. African countries represented by the African Union (AU) have a population three times larger than the EU and have managed to secure only 100 million doses from Pfizer/BioNTech and Johnson & Johnson. Despite the contractual obligations, Moderna only sold 35%, Johnson & Johnson 25%, and AstraZeneca 19% of their supply to the COVAX scheme, respectively. All these companies have fallen short of their self-declared production targets for 2021. This situation, while being unwilling to suspend intellectual property rights on COVID-19 related vaccines, tests, treatments, and equipment in terms of manufacturing or agreeing to the proposed waiver of the TRIPS Agreement of the World Trade Organization. The figure below portrays the number of vaccines announced to be donated to COVAX per country. It also shows the number donated, shipped, and not yet donated.

Figure 4: COVID-19 vaccines doses donated to COVAX, per capita

Source: Our World in Data

The World Health Organization views the significant disparity as an allocation problem, not a supply problem. Subsequently, the WHO called on countries and companies that control the global supply of vaccines to prioritize supply efforts to COVAX and AVATT (African Vaccine Acquisition Trust). Furthermore, WHO set a target for all countries to vaccinate 10% of their populations by the end of September 2021. Unfortunately, 56 countries excluded from the global vaccine marketplace could not reach this target, most in Africa. The second WHO target not met was to vaccinate at least 40% of their population by December 2021. Finally, the WHO called for international commitment and support to allow countries to fully vaccinate at least 70% of their people by mid-2022. Considering the current trend, it is unlikely that most African countries will come close to this goal in 2022.

The gap in the distribution of COVID-19 vaccines between developed and developing countries is visible in the figure below. Indeed, most African countries have administered less than 60 000 COVID-19 vaccines. On the other hand, Eastern African countries with the highest number of COVID-19 vaccines administered to date are small in size and population: Rwanda, Seychelles, and Mauritius.

Figure 5: COVID-19 vaccine doses administered per 100 people as of 31 December 2021:

Source: Our World Data

3. Impact on trade

a. Global merchandise trade

On 15 November, the World Trade Organisation (WTO) released its latest “Goods Barometer“. The update supports the sentiment noted in earlier WTO , and UNCTAD reports that trade is slowing down and losing its momentum. Indeed, from the earlier version published in August, the Goods Barometer index dropped by a massive 10.9 points to 99.5. Moreover, all six sub-indices experienced a decline from the previous month. The following figure shows the index concerning global merchandise trade volumes – which are slightly delayed but expected to follow suit:

Figure 6: Goods trade barometer (Index value, trend = 100)

Source: WTO

The WTO notes that the latest reading of 99.5 is close to the baseline value of 100, indicating growth in line with recent trends. Still, it also represents a sharp drop from the previous reading of 110.4 in August, suggesting a sharp reduction in the rate of quarterly trade expansion. Furthermore, the decline in the barometer reflects some combination of tapering import demand and disrupted production and supply of widely traded goods such as automobiles and semiconductors.

As expected, merchandise trade recorded a solid annual increase (22.4%) in the second quarter due to the recovery of demand for imported goods and the depth of the trade slump in 2020 during the first wave of the pandemic. However, the current barometer reading suggests that merchandise trade volume growth should slow in the second half of the year. This indication is consistent with the WTO’s most recent trade forecast of 4 October, which foresaw global merchandise trade volume growth of ↑10.8% in 2021 followed by a 4.7% rise in 2022. The estimates also showed quarterly trade growth slowing in the second half of 2021. The following side-by-side figure shows the movement of world merchandise trade volume and the six drivers of goods trade.

Figure 7: World merchandise trade volume (y/y change, and seasonally adjusted index 2005 = 100) and drivers of goods trade

Source: WTO

The substantial drop in the composite index is primarily because all the barometer’s component indices declined in the latest period, reflecting a broad loss of momentum in the global goods trade. The steepest decline was seen in the automotive products index (85.9), which dropped below trend as a shortage of semiconductors hampered vehicle production. This shortage was also reflected in the index of the electronic component (99.6). Indices for export orders (97.8), container shipping (100.3) and raw materials (100.0) also returned to something approximating recent trends. Only the air freight index (106.1) remained firmly above trend as shippers sought substitutes for ocean transport as backlogs accumulated in major ports.

b. IMF World Economic Outlook

According to the latest IMF World Economic Outlook, the growth predictions for 2022 are weaker than previously expected. Countries reimposed another set of mobility restrictions due to the spread of the COVID-19 Omicron variant. In addition, due to ongoing supply chain disruptions and rising energy costs, higher and more broad-based inflation is expected than were initially anticipated. This situation is notable in the United States, emerging markets, and developing countries. Further, China’s continuing real estate sector retrenchment and slower-than-expected recovery of private consumption also impacted growth predictions.

There have been significant forecast markdowns in the two largest economies as stipulated in the new edition of the IMF World Economic Outlook. A 1.2% revision for the United States stems from the revised assumption of removing the Build Back Better fiscal policy package from the baseline, continued supply shortages, and an earlier withdrawal of monetary accommodation. Furthermore, China’s zero-tolerance COVID-19 policy caused significant supply disruptions, and the financial stress among property developers induced a 0.8% downgrade. In addition, rising food prices and higher imported goods prices have led to higher inflation in sub-Saharan Africa. Globally, growth predictions for 2023 are expected to measure around 3.8%. This prediction is, of course, dependent on the assumption that vaccination rates improve drastically worldwide.

Figure 8: World Economic Outlook (growth projections, percentage change)

Source: IMF

c. WTO’s World Trade Report 2021

On Tuesday, 16 November, the World Trade Organisation (WTO) released its annual “World Trade Report” for 2021, subtitled “Economic resilience and trade”. The report shows why the interconnected global trading system is vulnerable and resilient to crises and how trade can help countries be more economically resilient to shocks. Indeed, international trade has been more resilient during the COVID-19 pandemic than during the 2008-09 global financial crisis, as the following figure shows:

Figure 9: Global trade (US$ billions, since 2005)

Source: WTO

Although the strong rebound, the COVID-19 pandemic highlights a paradox: globalization has created a more vulnerable world and more resilience to crises. On the one hand, economic integration makes us more dependent on far-flung trade networks and more exposed to cascading risks and shocks. On the other hand, economic integration also allows us to diversify suppliers, pool resources, and share information and expertise. While the unexpectedly sharp rebound in demand in many countries – propelled by pent-up consumer spending and fiscal and monetary stimuli – may have strained shipping capacity and supply chains, the trade recovery has rapidly gathered pace. Following a drop of ↓5.3% in 2020, it is estimated that merchandise trade will rise by ↑10.8% in 2021.

Figure 10: World merchandise trade volume (Index 2015 = 100, 2015Q1-2022Q4)

Source: WTO

As shown above, the WTO predicts a return to the 2011-2019 trend levels if global trade continues its current forecast. The projection results in a higher volume of world trade than before the pandemic by the end of 2022. In addition, the WTO notes that even services trade, which was disproportionately devastated by COVID-19, is showing tentative signs of recovery. Lastly, as mentioned previously, the growth of global e-commerce retail sales accelerated during the COVID-19 pandemic. The figures for 2020 show a ~28% growth from 2019, with forecasts showing the trend to continue in 2021. With stores closing and people staying indoors, consumers have embraced online shopping on a massive scale in almost every region. Obviously, there is a downside in terms of business closures and job losses in traditional businesses.

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 to some extent, container throughput has increased by ↑1.4 points in November to 125.3. This figure 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. The following figure shows the continued growth since the hardest lockdown of early-2020:

Figure 11: 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 has 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 highly elevated freight rates across several trade lanes to normalize before the end of next year.

ii. Global freight rates

Global container freight rates are still on the rise. Drewry’s “World Container Index” (WCI) composite index increased by ↑1.6% (or $153) to $9 698 per 40-ft container in the week of 15 – 21 January 2022. Furthermore, the sustained increase is not only present in spot rates, as tight container capacity and port congestion mean that longer-term rates have also been severely impacted. Consequently, contracts between carriers and shippers are running an estimated ↑200% higher than a year ago. Hence, the outlook remains bleak for shippers, as elevated spot and contract rates are likely to continue well into 2023. Nevertheless, the following figure summarises the one-year spot price of the index:

Figure 12: World Container Index – assessed by Drewry ($ per 40 ft. container)

Source: Drewry Ports and Terminal insights

The average composite index now stands at ↑292% higher than the previous year’s same time. Furthermore, the average composite index of the WCI, for the year-to-date, is $6 977 per 40ft container, which is $4 547 higher than the five-year average of $2 430. In either direction, freight rates have not moved by more than ~1-2% in the eight major transatlantic trade lanes. Worth pointing out is that all trade lanes – bar Rotterdam to Shanghai – have increased by more than ↑100% since last year. The increases are astonishing and significantly impact the bottom line of all cargo owners and, finally, the economic well-being of consumers.

iii. Blank sailings and schedule reliability

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. The following side-by-side figures illustrate the current state.  

On a carrier level, Maersk was once again the most reliable top-14 carrier in November 2021, with 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 13: Global schedule reliability (%) and global average delays for late vessels arriving (days)

Source: Sea-Intelligence

e. Airfreight industry

On Tuesday, 14 December, the International Air Transport Association (IATA) released its latest “Cargo Chartbook” for the fourth quarter of 2021. The headline is the continued strengthening of the air cargo sector, although growth and seasonally adjusted volumes have been stable in the past few months. Nonetheless, the industry-wide cargo tonne-kilometres (CTKs) increased by ↑9.4% for the three months to October versus the same period in 2019. IATA notes that such performance is typical during economic upturns, which is why air cargo continues to outperform container shipping and global goods trade. The following figure reports CTKs in comparison with these two metrics:

Figure 14: RPKs and CTKs (% change versus the same month in 2019)

Source:  IATA, CPB, RWI/ISL

Collectively, drivers of air cargo remain strong, including manufacturing activity and new export orders. Furthermore, cargo capacity continued to improve slowly in the three months to October 2021 but remained ↓9.5% below the same period in 2019. Dedicated freighters’ available CTKs were ↑26.4% above 2019 levels in the three months to October 2021. However, the increase does not offset the lack of capacity on passenger aircraft (belly or freighters), even though the latter is slowly trending upwards (down ↓34.4%). Lastly, air cargo yields rose further in the period in question, meaning air cargo revenues continue to perform exceptionally well.

Despite the unexpected moderation, the air cargo market continues to perform exceedingly well. Furthermore, the recent gains in international passenger traffic have supported capacity in the belly hold of passenger aircraft. Consequently, global load factors have eased somewhat. Nevertheless, as welcome news to most airlines, yields are climbing, mainly because the November numbers reported started to incorporate the record-high airfreight rates of the holiday season. Indeed, both the US and EU markets experienced records. Indeed, prices from China to the US peaked on 13 December at $15.13 per kg, with prices to Europe peaking on 27 December at $8.82 per kg. For shippers, freight rates have fortunately receded since, with current prices from China to the US hovering around $10.68 per kg (30%), with China to Europe at around $7.34 per kg (↓17%). Despite the drop, the consensus is that rates will remain high for now.

After discovering the Omicron variant in South Africa, many countries imposed air travel restrictions, despite the lack of evidence suggesting that these restrictions do anything to curb the global spread in case numbers. IATA notes that 90 countries had implemented travel bans to South Africa in early December 2021. Consequently, tickets bought to travel to and within South Africa fell from roughly 45% of pre-crisis levels before the outbreak to around 7% in the first week of December. Bookings for international travel fared even worse, as refunds exceeded tickets sold for a few days in early December – a rare occurrence of negative net bookings. As a result, domestic bookings fell to a low of 22% of 2019 levels. Other countries have been similarly impacted.

Figure 15: Cargo load factors by region of airline origin (% of available freight tonne-km, actual)

Source: IATA Economics

In November, carriers based in North America posted an 11.4% increase in international CTKs versus the same month in 2019, down from 20.3% in October. However, seasonally adjusted CTKs declined, and a downward volume trend emerged. US inflation – which reached 6.8% y/y in November, is hurting consumers, and congestion issues at several key gateways have added to headwinds for cargo volume. Carriers in the Middle East also faced a significant deterioration in their international CTKs, with growth versus pre-crisis levels diminishing from 9.7% in October to 3.4% in November. Furthermore, IATA notes that a downward trend may emerge in South African volumes, partly driven by the extensive Middle East-Asia trade route.

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 shows 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 16: Cross border delays in some selected SADC border posts (in hours)

Source: TLC & FESARTA.

The following figure illustrates a similar picture to those above from a corridor perspective. The Trans Caprivi (in Namibia) shows the longest cross-border travel time against zero queue time during the period. The North-South Corridor (South Africa – Gaborone – Zambia – DRC) shows both long cross border transit times together with long queue times.

Figure 17: 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, along with runners and clearing agents not working at night as the main drivers of the delays.

i. Developments at 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 Lebombo/Ressano Garcia 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 – 1200 on any given day. As a temporary solution to ease congestion towards 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 on 10 January 2022.

iii. RPSG calls for the digitization of OGAs to avoid dual stoppages and streamline the cross-border processes in the region

A concerted drive to get all government agencies on an electronic communications platform – as used by most Customs Administrations in the region – has once again been highlighted. In cross-border trade in Africa, private sector companies often experience instances of dual stops by both Customs and Other Government Agencies (OGAs) since these entities do not talk to each other.

Many private sector role-players indicated that they experience communication challenges with Customs and OGAs concerning escalation protocols in the cases of stops. This situation causes mistrust and a lack of transparency regarding the working relationship between Customs, OGAs, and private stakeholders. Therefore, it is suggested that better communication protocols be followed, crucially, by adopting digital platforms for all stakeholders to streamline cross-border trade.

The direct and indirect costs of unnecessary stoppages and delays severely impact trade. Evidence from private sector experience shows that additional costs well more than $2 000 to $3 000 have been experienced by some stakeholders due to stops, with a time delay of more than 20 days in some cases. These facts make trading in the region potentially very expensive and uncompetitive. In addition, confiscated items are not sent back to their origin and often managed to enter the illicit market through other avenues contradicting the purpose of a stop.

In conclusion, it is suggested that private sector stakeholders, Customs, and all OGAs work together to re-establish trust in the system and find better workable solutions to counteract illicit trade while decreasing the adverse effects on the industry. Therefore, the private sector vehemently calls for the digitization of OGAs to avoid these unnecessary costs and delays.

4. Vaccine rollout recommendations

To help African countries review and refine their COVID-19 vaccine rollouts, the WHO stipulated a few lessons that have emerged throughout the region in December 2021. So far, twenty-three African countries have undertaken ‘intra-action reviews,’ evaluating all the aspects of a country’s vaccine rollout. This approach includes coordination and planning, training, logistics, monitoring, service delivery, vaccine safety, risk communications, and community engagement.

a. World Health Organization shares lessons learned from Africa’s vaccine rollouts:

iv. The best planners get the best results

It has been noted that those countries who were able to finalize their National Vaccine Deployment plans before the first vaccines arrived typically fared better than those with little to no plans in place. In addition, strong government commitment and engagement with international bodies helped speed up development plans.

At national and district levels, emergency operation centers in Botswana handled operational issues relating to coordination and transport. This approach helped the country vaccine 40% of its population by December 2021.

By using a reverse logistics system, the vaccine does that were underutilized in certain areas were brought back and redistributed to other high-demand areas in Ethiopia. These efforts prevented the loss of valuable vaccine doses due to short shelf lives.

Populations in Ghana were prioritized for vaccination according to the potential risk exposure on the job and vulnerability. This approach was made in addition to protecting the elderly. In addition, innovative tools such as drones were used to reach far-flung communities.

v. Limited funds and commodities hold Africa back

Africa faces various challenges such as a lack of reliable funding, trained vaccinators and support staff, cold-chain infrastructure and resources, and other logistics elements. In addition, Africa currently faces an average $1.3 million shortfall in payment for health care staff, logistics and syringes, and crucial commodities.

Therefore, countries should direct efforts to attain sufficient funds, train healthcare providers and support staff, and integrate software platforms for capturing data.

vi. Demand must rise

Evidence from various African countries has shown that mistrust and misinformation drive down demand for vaccines. A few countries struggle to vaccine at least 50% of their population because of vaccine hesitancy. Ghana’s Misinformation and Rumor Management Taskforce works at the national and regional levels to address false claims. Senegal developed toll-free call centers providing facts to members of the public who are uncertain about the vaccine. In Botswana, a survey was sent out to understand the overall risk perception among its population and subsequently took to social media to run a #ArmReady campaign.  

vii. Africa’s mass-vaccination experience is paying off

Various African countries could use existing experiences and infrastructure to fight against diseases such as Ebola, measles, polio, and others to successfully rollout COVID-19 vaccines. For example, South Sudan is currently using vaccine accountability tools at the service delivery level implemented during its polio campaigns to keep track of vaccine absorption.

Another country, Liberia, which built its experience during an Ebola outbreak, set up vaccination sites in locations like churches, mosques, banks, and markets. Similarly, the Democratic Republic of Congo established sites in prisons, military areas, and mining sites.

viii. Go digital

Digitizing data capturing has proven to be very helpful in monitoring, planning, and adjusting vaccination methods in an ever-changing environment. Therefore, developing countries must adopt software to capture vaccination registrations in real-time.

Some countries used various innovative ways to capture data. For example, in Ghana, medical staff used QR codes to verify vaccinated individuals. A messaging platform in Ethiopia proved to be very helpful in keeping track of vaccinations at the provincial level. Citizens in Angola were encouraged to pre-register for vaccinations to avoid overcrowding at immunization sites.

According to the WHO, vaccine donations to AVAT, COVAX and the Africa CDC have been ad hoc and delivered with little notice and short shelf lives. This approach puts even more strain on already stretched health and logistics systems. Developing countries receiving these vaccines cannot plan their vaccination campaigns and efficiently allocate limited resources. As a result of the above, continuous setbacks further delay vaccines with a very short shelf- life.

b. World Health Organization’s cry for commitments by the international community:

As a response, the WHO called on the international community, specifically the vaccine donors and manufacturers, to commit to donating to COVAX, AVAT, and the African countries in a way that allows countries to mobilize resources effectively and enables long-term planning. A set of standards were suggested to be implemented beginning 1 January 2022:

i. Quantity and predictability:

To reduce transaction costs, donor countries should endeavor to predictably release large volumes of vaccine doses. The WHO further acknowledges the progress being made in this regard but also realizes the extensive burden placed on receiving countries, the AVAT and COVAX, when considering the frequency of exceptions to this approach.

ii. Earmarking:

Vaccine doses donated should be unearmarked for the best effectiveness and support long-term planning. However, if vaccine doses are earmarked, it is far more challenging to allocate supply based on equity and further account for certain countries’ absorptive capacity. In addition, it increases the risk of allocating limited resources and cold-chain capacity to distribute short shelf-life vaccines. Since when it is needed to cater to AVAT or COVAX doses that become available, they must usually consist of vaccine doses with a longer shelf life.

iii. Shelf-life:

Donated doses should have a minimum of ten weeks shelf-life when arriving in-country as a default. Only limited exceptions are allowed where recipient countries indicate a willingness and ability to absorb doses with a short shelf-life.

iv. Early notice:

Recipient countries need to be informed of the availability of donated doses nothing less than four weeks before the expected arrival date in-country.

v. Response times:

Information received last-minute can complicate and delay procedures, increase unnecessary transaction costs, reduce the available shelf-life of the vaccines, and increase the risk of failure. Therefore, all related stakeholders should seek to provide a rapid response on the essential information needed to distribute vaccine doses. This information includes but is not limited to; supply information from the manufacturer consisting of the total volumes allocated, the shelf-life, the manufacturing site, confirmation of the donation offering and the subsequent acceptance or refusal of the allocation from countries.

vi. Ancillaries:

Since most donations distributed to date have not included the necessary supplies such as syringes and diluent, it is suggested to include these to ensure rapid allocation and administration. These donations also do not cover the freight costs. Getting these additional supplies adds to the complexities, time, and costs, something most vulnerable countries cannot afford.

5. Economic recovery recommendations for developing countries

a. AfDB

According to the AfDB’s latest outlook report, East Africa’s economic growth is expected to recover to an average growth rate of 4.9% in 2022. In response to the COVID-19 pandemic, many countries have received budget support under the AfDB’s COVID-19 Response Facility and emergency financing from the International Monetary Fund.

Various economic experts advised that better economic governance would go a long way in securing better financial support for developing countries, especially in times of a pandemic. These approaches include clearing domestic arrears, improving debt management and transparency, and dealing with debt-related state-owned enterprises. In addition, the Lead Economist at the AfDB, Edward Sennoga, advised that innovative financing instruments are essential to insulate the East African region’s economies from global volatility shocks. These include non-debt equity and risk-sharing initiatives with the private sector, including collateralization and increased foreign investor participation in local currency debt markets.

b. Afreximbank

African countries need to focus their efforts on improving their resiliency, which is their ability to recover from shocks and adapt quickly to pressures. This tactic will protect its economic and social gains while facilitating economic transformation and sustainable employment. Therefore, policy for economic development post-COVID-19 in Africa should be centered around improving resiliency and quickening the transformation to realize sustained economic welfare gains. Two crucial policies provide key change agents to address these constraints:

i. Deregulation for the growth of large firms

Policymakers in developing countries should prioritize policies that facilitate firms’ entrance and growth prospects through domestic deregulation and foreign direct investment (FDI). Larger firms are more likely to survive an unexpected economic shock due to having more assets, being more diverse, and using newer technology. In addition, these firms tend to employ more people, pay higher wages, and export, which encourages transformation and improves resilience.

ii. Support agricultural productivity-led growth and the development of the agri-food system

Recent evidence showed that in 2020 the agricultural sector outperformed the broader economy, as it was more resilient than other sectors. Over the past 20 years, Africa’s average annual growth rate’s agricultural production was faster than any other region in the world. Research showed that agriculture growth is critical for poverty reduction at lower income levels. As the world population grows, demand for food increases. Also, due to increasing urbanization, available farmland is diminishing. If Africa can raise productivity on existing land and increase climate resilience, many opportunities exist that can also improve intra-African trade.

Conclusion

In summary, the extended regional supply chains have yet to recover from the devastating impact of the COVID-19 pandemic fully. Although some businesses and accompanying segments are arguably back to normal, most high-level metrics indicate that we have yet to reach the pre-pandemic levels of 2019. Indeed, most metrics are still well below 2019 volumes. As Africa continues its struggle for equitable access to vaccines, the prolonged effect of the pandemic is set to last.

Therefore, policymakers in African countries must keep a close eye on the lessons learned from other countries to be prepared and efficient in their ongoing vaccine rollouts. Indeed, to fight back against the unjust towards developing countries, there needs to be a global awareness about the unprecedented knock-on effects so that more global efforts are directed towards narrowing the gap.

As far as all customs and trade-related matters are concerned, the global constraints experienced in trade will likely continue for the near future. These constraints include container capacity shortages, decreasing liner connectivity, poor port performance, tight air cargo markets, and staff shortages to handle goods, not to mention exorbitant air and sea freight rates. Nevertheless, despite the current landscape, the region and the continent need to come together to overturn the current situation.

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