China Covid cases hurting flow of goods
By Herald Aloo, July 20, 2022
The increasing cases of Covid-19 infections in China, which have led to fresh restrictions and lockdown in cities and urban areas like Beihai could cause a shortage of consumer goods in Kenya again.
BBC reports that a total of 41 China cities “are currently implementing full or partial lockdowns or some kind of district-based control measures,” which has forced business to slow down in the world’s second largest economy.
Although the infection rate is below the international standards, they possess a ripple effect on countries such as Kenya which is a net importer, and heavily relies on China’s major financial, trade and manufacturing centres for goods.
China’s domination
The lockdown in Beihai, which is a key logistic link in the international land-sea trade, implies that shipping of various goods such as industrial material and finished products will take longer before reaching Kenya’s seaport.
China dominates Kenya’s economy with several imports that have edged out local industries over the years, implying that any supply chain hitch leaves Kenya underserved with consumer and capital products.
“Where lockdowns affect industrial areas, there is a possibility of industrial input shortages in Kenya, as shipping backlogs pile up. This is both inflationary and negative on the domestic economy,” says Mihr Thakar, an economist.
“However, local entrepreneurs have learnt to diversify their supply chains over the course of the Covid-19 pandemic, but China’s competitiveness continues to stand out,” he adds.
During the 2019/20 lockdown, the port of Mombasa faced a decline in cargo handled, average ship turnaround time increased, dwell time worsened while freight rates soared, said East Africa Business Council (EABC) in the latest policy brief on the performance of the EAC transport corridors.
“The pandemic and containment measures stifled domestic activity and disrupted global trade. Compared to 2019, the Port of Mombasa recorded a marginal decline of 0.9 per cent in total cargo throughput in 2020,” said EABC.
A total of 34.13 million tonnes of cargo were handled at the Mombasa port in 2020, which is 1.8 million tonnes shy of the target of 35.90 million tonnes.