Dr. Ismaël Fofana, AKADEMIYA2063, #2021ReSAKSS | Plenary Session II - Impacts of COVID-19 on African Economies
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The COVID-19 pandemic has disrupted global trade and commodity markets, negatively impacting food systems in Africa. Using simulation models, the document analyzes the effects of changes in international prices and trade volumes of primary commodities exported by 23 African countries. It finds that food processing and services were most vulnerable. Countries with diversified exports were less impacted. It recommends diversifying export baskets and adopting digital technologies to strengthen food systems against external shocks.
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Dr. Ismaël Fofana, AKADEMIYA2063, #2021ReSAKSS | Plenary Session II - Impacts of COVID-19 on African Economies
- 1. Ismael FOFANA Director for Capacity and Deployment Akademiya2063
- 2. Impact of COVID-19 Induced Global Trade Disruptions on African Food Systems Ismael FOFANA, Akademiya2063 Alhassane CAMARA, University of Sherbrooke Mariam A. DIALLO, Akademiya2063 Leysa M. SALL, Akademiya2063
- 3. The COVID-19 pandemic has resulted in major disruptions in global trade and markets of primary commodities Changes in primary commodity prices between 2019 and 2020, percentage point difference between estimated and predicted prices for 2020 -40 -30 -20 -10 0 10 20 30 40 Coal, Australia Crude oil, avg Natural gas, Europe Natural gas, US Natural gas LNG, Japan Cocoa Coffee, Arabica Coffee, Robusta Tea, auctions (3), average Coconut oil Groundnut oil Palm oil Soybean meal Soybean oil Soybeans Barley Maize Rice, Thailand, 5% Wheat, US, HRW Bananas, US Meat, beef Meat, chicken Oranges Shrimp, Mexico Sugar, World Logs, Cameroon Logs, Malaysia Sawnwood, Malaysia Cotton A Index Rubber, Malaysian Tobacco DAP Phosphate rock Potassium chloride TSP Urea, E. Europe, bulk Aluminum Copper Iron ore Lead Nickel Tin Zinc Gold Silver Platinum Introduction
- 4. The COVID-19 pandemic has resulted in major disruptions in global trade and markets of primary commodities (cont.) Sector-specific percentage changes in global trade of commodities between 2019 and 2020 -11.8 -9.5 -9.0 -8.8 -8.3 -7.4 -7.3 -6.3 -6.0 -5.8 -4.1 Transport equipment Fishing Mining and quarrying Electrical and machinery Metal products Petroleum, chemical an non-metallic mineral… Agriculture Wood and paper Other manufacturing Food and beverages Textiles and wearing apparel Introduction (Cont.)
- 5. Export baskets of most African countries are highly dependent on primary commodities. 0 10 20 30 40 50 60 70 80 90 100 Lesotho Tunisia Morocco Madagascar Eswatini Liberia Ethiopia Kenya Sierra Leone Guinea Bissau Egypt Seychelles Togo Niger South Africa Sudan Gambia Tanzania Senegal DRC Rwanda Benin Gabon Cabo Verde Cote d'Ivoire Malawi Guinea Uganda CAR Namibia Zambia Ghana Mauritania Burkina Faso Zimbabwe Mozambique Botswana Congo Chad Nigeria Mali Angola Cameroon South Sudan 0 10 20 30 40 50 60 70 80 90 100 South Sudan Liberia Ethiopia Chad Uganda DRC Sudan Gabon Seychelles Ghana Cameroon Niger Sierra Leone Congo Morocco Malawi Tanzania South Africa CAR Madagascar Tunisia Mali CaboVerde Eswatini Kenya Burkina Faso Zambia Angola Guinea Mauritania Nigeria Egypt Guinea Bissau Rwanda Cote d'Ivoire Togo Gambia Namibia Senegal Mozambique Zimbabwe Lesotho Benin Botswana Percentage share of primary commodities in total imports in 2019 Percentage share of primary commodities in total exports, 2019 Introduction (Cont.)
- 6. Assess the effects of changes in international prices and traded volumes of primary commodities on the food systems in selected African countries. • 23 African countries: Cabo Verde, Cameroon, Central African Republic, Chad, Congo, Côte d’Ivoire, Democratic Republic of the Congo, Egypt, Ethiopia, Gabon, Ghana, Guinea, Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, Senegal, Sudan, South Africa, Zambia, and Zimbabwe. Objectives
- 7. Methodology • Simulation models (Akademiya2063 / ReSAKSS) Single-CountryCGE Models • World Development Indicators database (World Bank) Macroeconomic data (2019/2018) • Statistics on international trade (United Nations) Import and export data (2019/2018) • Primary commodity price database (World Bank) Monthly price estimates for 46 primary commodities Annual price predictions (Commodity market outlook) • Koks and Hall (2021) Global Economic Impacts of COVID-19 Lockdown Measures Stand Out in High- Frequency Shipping Data. Update the Simulation Tools Build the Scenarios Simulation Tools
- 8. Changes in the international price of primary commodities (Price Shock) • Commodities prices estimate for 2019 and 2020 (COVID Scenario) • Commodity prices outlook for 2020 released in October 2019 (BaU Scenario) Disruption of global trade conditions and market access (Volume Shock) • Sector specific changes in global trade between 2020 and 2019 using high- frequency shipping data (COVID Scenario) • Changes in import and export volumes (aggregate) in 2020 from the IMF’s outlook in October 2019 (BaU Scenario) Methodology (Cont.)
- 9. • Several segments of the food supply chain captured: production, processing, trade, and consumption. Component Indicator Agricultural production Production, in constant value Input cost Output price Value added, in constant value Employment Food processing Production, in constant value Input cost Output price Value added, in constant value Employment Food services Production, in constant value Input cost Output price Value added, in constant value Employment Aggregate supply of agricultural Production, in constant value and food products Input cost Output price Value added, in constant value Employment Trade Export aggregate, in constant value Export agriculture, in constant value Export processed food, in constant value Export food services, in constant value Import aggregate, in constant value Import agriculture, in constant value Import processed food, in constant value Import food services, in constant value Consumption Household consumption, national Household consumption, rural Household consumption, urban Household expenditures, national Household expenditures, rural Household expenditures, urban Consumption price, national Consumption price, rural Consumption price, urban Employment, national Employment, rural Employment, urban Methodology (Cont.)
- 10. Methodology (Cont.) A score is computed to appreciate the impact of the COVID-19-related global trade shock on African food systems. Score = Number of indicators adverselyimpacted by the COVID−19 shock Total number of indicators considered x 100
- 11. Moderate impact of the COVID-19-related global trade shock on the food systems in the selected African countries Sensitivity of food systems to COVID-19-related global trade shock, score in percentage, computed for selected African countries 80 69 67 66 45 44 43 39 37 35 33 30 30 28 28 28 27 27 25 25 25 23 18 13 KEN ZMB DRC GHA CMR ZAF ETH CAR ALL MOZ NAM CGO EGY GAB ZWE SEN CHD MWI SDN LSO CIV CPV RWA GIN Findings
- 12. The Group of countries with a diversified export basket are less adversely impacted by the global trade shock. 40% 38% 29% 37% Agricultural Exporters Mineral Exporters Other Exporters All Exporters Impact of COVID-19-related global trade shock on African food systems, average score in percentage, countries grouped by exports Findings (Cont.)
- 13. Food processing and food service industries are the most vulnerable component of the system to the global trade shock caused by the COVID- 19 pandemic Sensitivity to COVID-19-related global trade shock, average score in percentage, by country groups and along the food system chain 37% 26% 54% 28% 19% 43% All Production Processing Trade Consumption Macro Findings (Cont.)
- 14. Conclusion and Key Recommendations Well-diversified export basket is key to strengthening the resilience of Africa’s food systems to external shocks. Embracing digital technologies across the food value chain to mitigate the adverse impact of external shocks.