COVID-19 and the Unexpected Recovery of Regional Trade in East Africa Andrew Mold1 and Anthony Mveyange2
Blog piece by Brookings Mveyange Mold
CRISIS? WHAT CRISIS?
At the beginning of the COVID-19 pandemic, such was the scale of the economic disruption caused by lockdown measures that there was much talk of the collapse of global trade. In the midst of the lockdowns, in April, the WTO estimated that the decline would amount from anywhere between -13 and -32%.
In a similar vein, UNCTAD was forecasting a -20% decline in global trade for 2020.
However, recently released trade statistics across the world reveal that those forecasts may have been overly pessimistic and underestimated the relative resilience of the global trading system (The Economist, 2020). In June, after several months of sharp declines, trade volumes recorded their biggest monthly rise on record, with a 7.6 percent increase.
East Africa may be shadowing these global trends. Kenya is the largest regional
trader and is thus a good barometer of broader East African trends. The country was initially hit quite hard in terms of the decline in trade volumes, with a -19 percent in total trade volumes in April. As warned in our earlier Brookings Policy Brief, re-exports to the rest of the region were hit extremely hard, with a -83 percent decline in April. But since June total trade volumes have begun to recover rapidly, with a 9% increase in June and a 12% increase in July (Table 1).3
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