How is Sub-Saharan Africa weathering the Covid-19 pandemic? Better than expected, conclude our panellists on this episode of Trade Finance TV.
This is region, as Dr Rebecca Harding puts it, “blown about by things happening outside its control”. Take Nigeria, where 10% of its GDP comes from oil exports that had its 2020 budget rewritten once oil prices plunged to below US$30/bbl.
However, Africa’s its experience of tackling pandemics as well as being home to the world’s youngest populations has been a plus as it navigates economic recovery. Its ability to build from the bottom up with strong supply chains is very encouraging.
But as other countries see renewed nationalism, Africa’s intra-regional trade remains low (around 16% of all trade) and border closures have created huge inefficiencies. Lockdown hits informal economies have been hit as people can no longer buy and sell on the street. Borders have closed and infrastructure to move trade by road has been so badly affected that goods are being shipped to Europe out of one African country and shipped back again to another.
Add to that FX issues, says Deutsche Bank’s Lagos-based Jaiyeola Dauda where the Nigerian Central Bank policy has been to manage dollar liquidity very closely (60% of its USD receipts are from crude oil exports). One size does not fit all across the region and he is seeing demand for more structured finance solutions, support with FX liquidity and longer tenors on transactions
You can hear more from Harding and Dauda by tuning in!
- Dr Rebecca Harding, Trade Economist and CEO of Coriolis Technologies
- Jaiyeola Dauda, Head of Trade Finance, Nigeria, Deutsche Bank
Clarissa Dann, Editorial Director, Deutsche Bank