The Covid-19  pandemic – Is it a crisis on the economy?

By Lulu Kiritu

On January 2020, the entire world was at a stand still as news flew in from all corners that there had been an outbreak of a deadly virus in the second largest economy in the world, China. This most definitely threw a lot of panic all over, as most countries were more concerned about the virus getting inside their borders. Countries were and still are very keen towards securing their borders and this has most definitely affected the movements in and out of different countries, both for people and goods. We all know that for inter-state trade to occur, there must be movement of goods between countries.

It is unfortunate yet quite evident that Coronavirus (or Covid-19) has crippled trade between most states. China’s economy, for example, which is the genesis of the virus, has been affected tremendously. According to recent statistics, Reuters expect China’s growth rate to slump to 4.5 percent in the first quarter of this year from 6 per cent in the previous quarter. That would be the slowest pace since the financial crisis. With much of the country in lockdown, the virus could affect up to 42 per cent of China’s economy, according to Standard Chartered.

Given that China is the largest exporter in the world, the drop will definitely affect quite a number of countries that are great trading partners. Kenya for example has already had its fair share since China is Kenya’s biggest trading partner, accounting for 17.2 per cent of Kenya’s total trade. According to the statistics from the Kenya Tradenet System (KENTRADE), there is a notable decrease in the number of imports by Kenyans from China. In September 2019 Kenya had imported goods worth of Kshs 66 billion while in January the imports dropped to Kshs 54 billion.

Kenya not only imports from China but also exports to China. Last year, we saw a huge increase in the export of Avocados to China due to the simplified processes for exporting that have been made possible by KenTrade’s Single Window System. This was not only a great boost to the economy at large but to the Avocado farmers in the country. Kenya’s exports to China are mainly agriculture-based and include coffee, specialty teas, cut flowers and avocado. The Corona virus is a big threat towards the trade and the economy at large. However, there is lot of hope in getting the virus contained and as such I believe that there is hope that all the economies will recover what they have lost.

(Lulu Kiritu is a PR & Communications Practitioner).