Trade ministers are playing an essential role in the pandemic response
COVID-19 is disrupting lives in Africa, and the economic impacts are being felt in many ways. In the least developed countries (LDCs) here, trade ministers can immediately act to mitigate disruptions that are affecting both health and livelihoods, alongside international support and cooperation.
African LDCs are vulnerable already, with their high rates of poverty, low literacy, food insecurity, limited health resources and poor infrastructure. With COVID-19 in Africa at more than 30,000 reported cases as of writing, many countries are locking down to prevent viral spread. With these sudden disruptions to vital commerce, trade ministers must also respond.
For many underfunded LDCs, COVID-19 could rage like wildfire, with rapid transmission and mortality without adequate supplies of drugs, personal protective equipment (PPE), ventilators and disinfectants. Trade ministers must actively engage in the COVID-19 response as facilitators in local, regional and global trade.
Amid the pandemic, LDCs now face intense competition to access supply chains for health necessities and urgent commodities. COVID-19’s disruptions will likely cut global trade by 13-32% in 2020. Critical supplies must be secured during the low-level infection period to prepare for a worst-case scenario.
Here, the West African Ebola outbreak and what Liberia learned from that can offer useful insights for trade ministers.
Without active leadership, precious response time is squandered in bureaucratic infighting and political staging while people suffer. Heads of state must actively lead to avert this, while steering the focus of a twofold national response: health and safety alongside economic management.
1. Activate private sector and informal stakeholder awareness campaigns to identify mitigation modes. Handwashing stations proliferated in Liberia during the Ebola crisis. In the COVID-19 response, national awareness campaigns should be boosted.
2. Engage private sector knowhow to streamline local and international procurement of urgent supplies. Civil bureaus are often ill-suited to execute emergency procurement. Liberia tapped local private sector supply chain capacity to access urgently needed supplies, which included the ‘Ebola Bucket’ (a handwashing station bucket with spigot), chlorine to treat water, soap for handwashing, plus donations of ambulances, vehicles and funds to support national efforts. For COVID-19, the production and distribution of such buckets along with chlorine and soap for handwashing stations at all entryways would be a useful intervention. Sourcing innovative, local mass production of face masks and PPEs may prove critical.
3. Facilitate expedited approval across trade and customs authorities to fast-track the necessary imports. The COVID-19 response demands the maximum amount of coordination between countries – in solidarity – donating equipment and supplies to areas suffering from the pandemic. Fast-track inventory monitoring and deployment may save countless lives.
4. Coordinate with stakeholders for essential staff training on mitigation measures as prescribed in the national response protocol. Staff at supermarkets, key factories and at borders and customs checkpoints must all be aware of prescribed national protection and prevention protocols. Such approaches can ensure essential employees have the right information to protect the public.
Preventing trade-related distress
1. Beware that epidemic-triggered hoarding might be exploited by private actors. To mitigate panic buying, hoarding and price gouging during the Ebola crisis, Liberian trade officials acted by drafting a monthly newsletter listing inventories of key commodities and expected imports. Bulletins also prescribed short-term price ceilings on rice and oil to curb costs in shipping and food markets.
For COVID-19, nations need temporary price controls and volume limits on national staples to avert hoarding, as well as national buffer reserves and import forecasts to tailor reserve-release response with market demand. Non-tariff measures should be publicized and shared with partners to deter and report violations.
2. Monitor international tariff and non-tariff measures instituted by global partners and key operators impacting vital imports. Many ports quarantined vessels from Ebola-infected countries for 21 days before docking, thus delaying critical rice deliveries. To manage this, Foreign Trade Ministers exempted this quarantine where vessel personnel stayed aboard.
With COVID-19, officials of LDCs relying on vital food and energy imports must monitor reserve inventories transparently with trade partners, and alert to non-tariff measures hindering urgent supplies.
3. Remain actively informed of all approved national response measures to engage private sector stakeholders. Consultation with market associations of small traders provided a platform to air concerns about Ebola, notify people of new national health responses and boost community awareness, thereby helping to avert a crisis in the informal economy, which makes up 85.8% of African employment.
Many LDC citizens are entrepreneurs surviving on daily transactions. For LDCs lacking a strong safety net or the capacity of a stimulus to support their largely poor and vulnerable populations, lockdowns risk the very security of fragile states and their small businesses. For COVID-19, enlisting communities to minimize risk of infection during daily life is critical. Short of that, it’s best to raise prevention and treatment awareness, as has been done with malaria.
4. Invite large investors to assess the crisis’ impact on operations, and propose interventions. The impact of Ebola was felt also by Liberia’s major investors, like concessions exporting iron ore and rubber, among others. These investors were already in distress due to global commodity price volatility, and were further negatively impacted by the health crisis. Engaging such major investors to identify those in distress is critical to national interventions that help mitigate losses while retaining workers. Tax incentives, deferrals on royalties and other incentives with major investment partners can be used to protect investments and jobs during the health crisis.
5. Coordinate with ministries of finance, commerce and central banks to ensure forex flows for key commodity imports. Vital to softening any trade-related crisis is access to foreign exchange for major importers. Illiquidity breeds shortages, raising food and commodity prices while limiting supplies for urgent national health responses. In Liberia, coordination among the Ministries of Finance and Development Planning, Commerce and Industry, the Liberia Revenue Authority and The Central Bank of Liberia facilitated the central bank’s interventions to manage liquidity challenges faced by importers of much needed health supplies and equipment for the Ebola response and for the importation of food and fuel into the country. This level of cooperation will be especially critical for the COVID-19 responses of LDCs to mobilize supply chains.
Standard social distancing and national lockdowns, while critical to results, may need modification to accommodate the reality of major populations surviving on less than US$2 per day. Policymakers enforcing lockdowns should engage community organizations to find cooperative approaches, limiting the use of force that is prone to incite fatal riots.
The key to success in overcoming Ebola, particularly among poor and vulnerable populations, was high awareness of local ways of prevention, care and treatment – given the scant resources. Mimicking malaria preventive care and treatment strategies toward COVID-19 and investing in awareness is essential for LDC responses given their limited capacities to stimulate the economy, and their support for robust national responses. Working through community influencers and leaders, associations, informal traders’ associations, and community groups to educate and create awareness on local prevention care and treatment methods, the same way they would when combatting malaria, is key to saving lives later.