Ministry of Trade PS Geraldine Ssali in Anti-Corruption court dock Ministry of Trade PS Geraldine Ssali in dock at the Anti-Corruption

Covid-19 hits EAC trade hard

The East African Community is a regional economic bloc comprising Uganda, Kenya, Tanzania, Rwanda, Burundi, and South Sudan. It is important to note that trade within the East African Community (EAC) has not remained the same since the outbreak of coronavirus in the region.
Covid-19 is a global pandemic that is suppressing and damaging the social, economic, and political agenda of the EAC. It is sabotaging, frustrating, and obstructing trade within the region. It is greatly affecting trade within the EAC in numerous ways.

From within the member states, some trade sectors like those dealing in clothes have been barred from trading. This means that some people are out of business and, therefore, the levels of unemployment have accelerated.

Additionally, some traders who earn from hand-to-mouth have run out of capital and, therefore, they are unable to trade again even if the lockdown is lifted since they have used the capital they had to take care of themselves.

It has enumerated delay in the clearance of the goods. Currently, Covid-19 has led to the introduction measures meant to prevent the spread of the virus, including testing and waiting for the test results for truck drivers hence raising the non-tariff barriers. Covid 19 is making transportation of goods difficult.

The common mode of transport within the East African region has been road transport, yet statistics show that in Uganda, most truck drivers from Kenya and Tanzania are the ones bringing Covid-19 to Uganda. The pandemic is weakening the progress of trade since some people cannot buy certain items due to the lockdown measures put in place.

The amount of exports and imports has relatively reduced due to the restraints in movements as a result of lockdown measures. It is leading to unhealthy competition, price fluctuation and inflation given that some traders, especially those dealing in retail items, are raising prices for goods and, therefore, making life of buyers as well as competitors.

It is leading to a monopoly whereby those with a big capital base are expanding and getting big tenders whereas those with little capital are getting out of business.

Covid-19 has increased the cost of doing business because all those who are still in operation tend to raise prices because of the costs added to their tasks while producing or selling the products.

Covid-19 is changing market trends within the region. This is because market vendors are changing their settings to suit the prevailing circumstances that take into account the controls put in place by different partner states’ to address it.

It is also leading to the unstable legal framework where member states are simultaneously enacting and amending legislation to suit the prevailing circumstances brought forward by Covid-19.

It is important to note that although government approved factories to continue operating during the Covid-19 lockdown, this has not been the case because some companies were not able to fulfil the government directives such as employees staying within the company premises to work.

The EAC member states should harmonise the policies and cross border controls aimed at preventing the spread of Covid-19. Partner states should make proper risk assessments about which sector to open during the lockdown to boost economies. This will improve member states’ economies that are currently going through hard times.

Ms Nagadya Hamidah is a lecturer at Islamic University in Uganda.