BUSINESS uncertainty in the region which has been compounded by the Covid-19 is now compelling Regional Chief Executive Officers (CEOs) to deliberate on the fate of the business environment within the East African Community (EAC).
The CEOs are converging in Arusha to take stock of the East African business climate as some countries continue to grapple with the Covid-19 pandemic.
During their tomorrow’s roundtable meeting, the CEOs are expected to deliberate and chart out pathways on business rebound and emerging opportunities in East Africa.
According to a statement issued by the East African Business Council (EABC) yesterday, the CEOs will highlight the current state of intra-EAC trade and investments and kick off the upcoming training sessions expected to prepare Small and Mid-size Enterprises (SMEs) on rapid recovery and resilience amidst the global economic effects of the novel coronavirus.
“At a global level, new consumer behaviours have impacted business models, partnerships, and the competitive landscape.
The round table will enable businesses in the region to learn, innovate and adapt to the global economic changes and look into policies to strengthen value and supply chains in the EAC,” reads part of the statement by the regional apex body of private sector associations and corporates.
It will also enable businesses in the region to diversify, repurpose business models to the new emerging opportunities such as e-commerce among others.
The roundtable takes place as the EAC Secretariat has rolled out the regional post-Covid-19 Economic Recovery Plan 2012-2024.
Among other things, the plan seeks to mitigate the short-term and medium-term negative impacts of the pandemic on vital economic and social sectors of the EAC region; support strengthening of the fundamentals for robust recovery and sustainable further growth of trade and investment flows; and facilitate harmonised implementation of priority activities aimed at promoting economic recovery and ensure the future prosperity of the EAC region.
World Bank’s initial projections indicate that as a result of the pandemic, economic growth in East Africa, as well as other sub-Saharan African countries will decline from 2.4 per cent in 2019 to between - 2.1 and 5.1 per cent this year, depending on the success of measures taken to mitigate the effects of the pandemic.
The pandemic is also projected to cost the EAC partner states between $37 billion and $79 billion in terms of output losses.
At the regional level, 51 per cent of EAC’s exports are destined to countries highly impacted by Covid-19, at the same time, 53 per cent of its imports originate from such highly impacted countries.
Substantially reduced movement of international freight, and reduced capacity or in many cases closure of borders by EAC partner states and their trade partners as a measure to contain the pandemic within a space of less than a month since March 2020 halted virtually all trade.
The trade disruptions and losses represent a major shock to the EAC economies since trade is the driving force behind their economic growth and development as evidenced by the high total trade-to-GDP ratios averaging 27.4 per cent during 2018-2019, according to 2020 statistics by the United Nations Conference on Trade and Development (UNCTAD).
