• Tourism, logistics and retail experienced cash flow reduction which stood at 92%, 75% and 63%, respectively.
Thursday, 24th September 2020, Arusha, Tanzania: The Covid-19 pandemic has hit hard businesses and investment in the East African bloc, with disruptions on global supply chains testing the resilience of business ecosystems and reducing Intra EAC trade.
In this view, the East African Business Council (EABC) in collaboration with GIZ
Program, ‘Support to East African people-centred and market-driven co-operation’ developed a business recovery strategy after surveying how businesses in the region have been affected by the pandemic. The strategy proposes key measures to mitigate the effect of the pandemic.
EABC and GIZhavetoday launched the strategy report titled, ‘Impact of COVID-19 to Business and Investment in the EAC and Proposed Recovery Measures to the EAC Economies’.
The survey sought to find out how COVID-19 has affected businesses in the region by looking into the impact on 5 critical areas; cash flow, supply chains, employees, projected period of business sustainability and areas companies are seeking support.
The survey finds that sectors such as tourism, logistics and retail have significantly experienced a higher percentage of cash flow reduction, which stood at 92%, 75% and 63%, respectively.
Drawing its findings from responses from over 100 EABC members and private businesses from different sectors in the EAC region, the survey reveals that businesses have also been left battling with a reduction in the export market and customer spending.
The survey finds that about 56% of businesses reported a decline in sales, 56% of businesses were also affected by the increased cross border restrictions, while challenges to source raw materials saw 44.1% of businesses grappling to stay afloat.
The state of unemployment in the region has also escalated with 36.4 % of the respondents revealing that they have been forced to lay off their staff. The uncertainty from the pandemic has seen 41.2% of the respondents say their business maybe not sustainable for more than 6 months.
The recovery strategy for businesses in the EAC, proposes various recovery measures to mitigate the impact of the COVID-19 pandemic which include: need for stimulus funds to help the most adversely affected sectors to recover steadily, EAC Partner States to implement a coordinated and synchronized fiscal and monetary measures to mitigate the effect of COVID-19 on the region’s macroeconomic and financial stability.
Speaking during the launch of the strategy, EABC CEO, Dr. Peter Mathuki called upon EAC partner states to liberalize the regional airspace, such that regional and international cargo carriers can pick consolidated products for export from each EAC Partner State to destinations where they have substantial and consistent demand.
“There is also need for speedy authority operations especially at border-crossing areas to avoid overcrowding of traffic, taking into consideration road safety issues for freight and passenger movements,” says Dr Mathuki.
The recovery strategy for businesses in the EAC, also recommends a strengthened partnership between the public and private sectors for business rebound as well as a coordinated regional approach on handling COVID-19.
Dr. Peter Mathuki, Executive Director /Chief Executive Officer
East African Business Council (EABC)
9th Floor Mafao House | Old Moshi Road | Arusha | Tanzania
P. O. Box 2617 | Tel: +255 27 2520162
Email: firstname.lastname@example.org I Website: eabc.info
EABC – The Voice of the Private Sector in East Africa
Notes to Editors: –
About East African Business Council: The East African Business Council (EABC) is the regional apex body of private sector associations and Corporates from the 6 East African countries. It was established in 1997 to foster the interests of the private sector in the integration process of the East African Community. EABC vision is a borderless East Africa for business and investment. The primary mission is to promote sustainable private sector driven in the EAC.