Kenneth Kiarie, who runs an electrical goods shop in downtown Nairobi, the capital city of Kenya in East Africa, might have to close his store by the end of April unless he can secure more supplies from China amid COVID-19 disruption.
The 42-year-old entrepreneur is heavily dependent on Chinese factories for his business for the past decade as Chinese goods are of high quality at an affordable price and cater for all income groups, but the COVID-19 outbreak has cut off supplies as the world’s second largest economy has adopted massive quarantining measures and mobilized most of its resources to contain the virus domestically. Since Kiarie received the latest shipment of goods in December, he has been unable to get more supplies to replenish his dwindling stocks. More and more African and Chinese businessmen here have felt the impact of the pandemic.
Michelle Li, who operates a homestay hotel in Nairobi for Chinese tourists, is upset about the globally spreading virus. “The virus has been a huge shock to my business as my hotel hasn’t received a single guest since the outbreak and some previous orders were canceled,” he said. The COVID-19 outbreak has testified to the extent of deep and enduring trade and investment ties between China and African countries. China is Africa’s biggest trading partner and a major player in Africa’s supply chain, notably in such areas as electronics, furniture, industrial goods, machinery and household supplies.
Measures like social distancing and shutdown of factories to curb the COVID-19 spread have inevitably led to disruptions to economic activity and supply chain.Data from China’s General Administration of Customs showed that between January and February, the trade value between China and Africa in terms of U.S. dollars declined by 17.8 percent year-on-year with China’s exports to Africa down by 13.8 percent and its imports from Africa plunging 21.7 percent.African firms have faced a shortage of raw materials due to reduced imports from China as a result of the coronavirus outbreak, which has increased output prices as alternative import markets are not as cheap as China, said Jibran Qureishi, regional economist for East Africa with Uganda’s Stanbic Bank.”Port congestion at Durban (the third populous city in South Africa) and other locations meant that many businesses were forced to limit activity, with exports to China also decreasing,” said David Owen, economist with London-based global information provider IHS Markit.
There is a possibility that the impact of the coronavirus on economy may be significant, with sectors such as tourism, finance and manufacturing mostly affected, said Dawie Roodt, chief economist of South Africa-based financial services company Efficient Group.The virus will have a negative impact on growth in the short term, but it’s too soon to talk about the long term impact, said Jannie Rossouw, head of the School of Economic and Business Sciences at the University of the Witwatersrand in South Africa.”Close ties between China and Africa are important for Africa’s long-term development as China has invested in the continent, and I’m sure the investment will continue,” Rossouw said.
John Lui, an entrepreneur who runs a shop in Johannesburg, told Xinhua that “we think as soon the outbreak is brought under control, and we hope, everything will go to normality.” “Some businesses are planning to order when factories re-open … We need to keep relations and grow them between the continent and China,” he added.Given that businesses have speed up the pace to resume normal operations in China, economists project activities will see a visible recovery in March and conditions will improve soon.