This archive report was first published on 16 June 2020.
Published on June 16, 2020, a report by McKinsey & Company warned that East African countries could lose over $5 billion in foreign earnings from agricultural exports this year due to the Covid-19 pandemic and uncoordinated individual countries' mitigation and containment responses.
Agriculture is a crucial sector in Africa, accounting for 23% of the continent's GDP and employing nearly 60% of the economically active population. The disruptions caused by the pandemic have resulted in reduced food demand, disruption of trade in export crops, and severe crop production and processing shocks.
According to the report, 'Safeguarding Africa's Food Systems Through and Beyond the Crisis,' the supply disruptions could result in a severe economic blow for countries such as Kenya, Tanzania, and Uganda, which rely on agricultural exports as a primary or secondary source of export earnings.
"Africa's exports of food and agricultural products are worth $35 billion to $40 billion a year, and some $8 billion a year flows through intra-regional trade in these products," the report stated.
Disruption of agricultural production and exports due to lockdowns in international markets has made it challenging to fulfill orders, affecting exports for the past three months. This has resulted in increased job losses, which are likely to disproportionately affect low-income earners and informal jobs in urban areas.
Factoring in the impact of these job losses on dependants, it is likely that between 400 million and 460 million people in Africa face the prospect of reduced incomes.
The report noted that Kenya, as one of the countries severely affected by the disruption, especially in the flower sector, exports of vegetables, nuts, coffee, and cocoa in other countries are also affected to some degree.
Immediate action is necessary to safeguard Africa's food security and speed up the recovery of the agricultural sector. Governments and industry players should consider measures to cushion the sector and speed up recovery.
