Africa

General region overview

Africa's confirmed COVID-19 infection numbers are quickly rising, as testing increases. This includes South Africa and Egypt, which represent New Zealand's key export markets on the continent. See this dashboard by Africa's Centres for Disease Control and Prevention (CDC) for live updates.

Economic impacts are expected to be significant for those countries with economies reliant on industrial commodities, particularly oil (Nigeria), as well as tourism (Egypt). The lag impact of China's COVID-19 response, given China's significance as a two-way trade partner across African markets, will also have an ongoing effect.

There are a number of other risks for the continent overall, particularly given the reliance on imported foodstuffs and medical/pharmaceutical products. Looking further out, the risk of reduced remittances from expatriate African nationals impacted by work reductions or job losses could have consequences for disposable incomes across Africa.

What can be challenging cross-border difficulties in the best of times may be exacerbated, and companies should work closely with their shipping agents to understand expectations and risk for product entering the market, particularly consignments requiring land border crossings to land-locked countries.

To date there have been no reported impacts at key ports, although with increasing quarantine measures applying to vessels and crew, this needs to be carefully watched.

For manufacturing exporters, a likely reduction in key specialised expatriate staff who have been repatriated to their home countries could have implications for technical, after-sales support or other areas. It's important for companies to review and understand the implication of these. Keeping close engagement with channel partners and distributors is critical at this time.

The ability for African countries to service high levels of debt, as well as maintaining foreign exchange availability, may have impacts for New Zealand exporters in coming weeks.

For more information on doing business in Africa, visit myNZTE - our free online portal for curated, in-depth information and guidance. 

Resources for Africa

Export support
Podcast
9:55
Last updated: 22 Apr 2020
Podcast: a closer look at South Africa, 23 April

Haylon Smith, New Zealand's Trade Commissioner for Africa, interviews Dionne Kerr from Siyakha Consulting - a market entry...

Watch now
Export support
Podcast
6:51
Last updated: 15 Apr 2020
Podcast: A closer look at Nigeria, 16 April

Haylon Smith, New Zealand's Trade Commissioner for Africa, talks to Naijalink, managing director and NZTE Beachhead Advisor, Thessa Bagu...

Watch now

Egypt

Egypt began to ease its COVID-19 restrictions on 23 June, with the lifting of an overnight curfew which had been in place since March. Restaurants, cafes, and places of worship were allowed to re-open with some restrictions on capacity.

Egypt's airports reopened on 1 July for the first time since March, along with some tourist sites such as the Giza pyramids. Despite the easing of restrictions, Egypt saw a surge in cases during the month of June, which registered more new cases and deaths from COVID-19 that the previous four months combined.

Economy and trade

The World Bank announced in a press release on 17 May that it would provide US$50 million in financial support to Egypt as part of its new Fast Track COVID-19 Facility. The project aims to strengthen the prevention, detection and response to the COVID-19 pandemic in Egypt.

The Egyptian Pound (EGP) has held relatively steady throughout the crisis, ranging from a low of EGP 15.54 / USD 1.00 to a high of EGP15.83 / USD 1.00 in the past 3 months, and has in fact risen 2% against the USD across the year to date.

Egypt's foreign currency reserves took a USD 5.4 billion hit in March, the first dip in 14 months, to USD 40.1 billion. International financial institutions are confident that Egypt can maintain healthy reserves, and and on 11 May the International Monetary Fund (IMF) approved Egypt's request for US$2.7 billion in financial aid to address the urgent balance of payments crisis stemmed from the COVID-19 pandemic.

Economic pressure will come from an inevitable drop in revenues from the collapse in tourism, remittances from Egyptians abroad particularly in the Gulf countries, and debt repayments.

Government support

In March, Egyptian President Abdel Fattah Al-Sisi announced a US$6 billion emergency package to mitigate the adverse effects of COVID-19. Among other measures, the Government has lowered natural gas prices and tariffs on electricity for the country's industry sector, as well as suspending taxation on agricultural land for two years.

Meanwhile, the Ministry of Workforce announced the allocation of approximately US$2.9 million in financial aid for irregular workers (PDF). The aid has been put in place to act as an emergency cover for workers left unemployed during the coronavirus outbreak, and is expected to reach around 300,000 beneficiaries.

A series of measures to assist companies in their recovery have also been put in place. For instance, to facilitate payment of salaries and financial dues to suppliers, the Central Bank of Egypt has introduced credit lines for tourism enterprises to be paid over a maximum of two years with a six-month grace period.

Travel

Egypt is preparing for the return of foreign tourism as air traffic resumes across all of its airports this month. This comes after more than three months of international flight suspension as a result of the COVID-19 pandemic. The Egyptian Government is providing several incentives to attract international visitors, including a 20% discount on tickets for historical sites and museums, with further discounts for those using Egypt Air and Airco. Tourist visas will not be required for people visiting the coastal governates, aviation fuel will be discounted by 10 cents per gallon, and airlines will receive a 50% landing and boarding fee discount. There will also be a 20% ground services discount for direct flights to the coastal governates.

Supply chain, logistics and freight

Port activity in Egypt has remained steady and, in some cases, it has increased since the start of the pandemic. This is due to a backlog of shipping and long-term supply contracts, as well as the fact that Egypt is in the midst of its agricultural export season.

Sector insights: food imports

The Egyptian Government is importing higher volumes of food stocks that usual, in a bid to stave off fears of food insecurity. This is particularly the case for wheat and other grains (Egypt is the world's largest wheat importer), but there are also signs it may be easing current restrictions on meat imports from Brazil. Egypt is aiming to have 6-8 months of strategic reserves of wheat, rice and vegetable oil in place.

Demand for New Zealand food products in Egypt remains strong. This is partly thanks to a reduction in the rate of inspection of consignments from 100% to 25% by the National Food Safety Authority. The introduction of temporary measures that exempt the need to authenticate customs documents has also reduced port processing times, allowing for quicker delivery of goods to market.



Algeria

Algeria's government has announced a 15-day renewal of its partial lockdown measures to help prevent the spread of COVID-19.

Algerian Prime Minister Abdelaziz Djerad said the decision to renew lockdown measures was made after consultation with the Scientific Committee monitoring the spread of COVID-19 and the health authorities.

The measures came into effect on 28 July, and include a curfew from 8:00pm to 5:00am and a ban on road traffic to and from Algeria's 29 provinces.

Economy and trade

The oil and gas sector are key for Algeria, so the drop in oil prices and reduced gas exports have significantly impacted the economy. This sharp drop in earnings led the Algerian government to announce on 1 May that the state budget would be reduced by 50% in 2020. Sector insights: food imports

Algeria's food import bill witnessed a 3.5% decrease in the first two months of 2020, compared to the same period in 2019 – from US$1.34 billion to US$1.29 billion, according to the General Directorate of Algerian Customs (DGD). The drop has been attributed to reduced imports of cereals and vegetables amongst other goods. In January and February 2020, however, the imports of some other products increased compared to the same period in 2019, including dairy products (up 4.49% to US$260 million) and animal products (up 40.95%, to US$36 million).

The President of APOCE, an Algerian consumer protection agency, stated on 24 April that based on a recent survey, 52% of Algerian households have seen their food expenses increase since the start of the lockdown. The change in prices were described by APOCE as "cyclical" and "fluctuating". The survey also showed a purchasing surge at the start of the lockdown, due to fear of food shortages. Prices for products in various regions remained similar, with local inflation rates varying between 10%-20% and affecting some products more than others according to the same survey.

Nigeria

Nigeria officially recorded a total of 40,532 coronavirus cases on 26 July, according to data from the Nigeria Centre for Disease Control (NCDC).

Lagos continues to be the most impacted, while no new confirmed cases have been reported in Zamfara over the past 48 days.

Nigeria is likely to be hit hard by the global oil price decline and is dealing with a significant excess of supply. This will hit government finances substantially.

Meanwhile SMEs are facing the prospect of managing this with the very high lending rates seen in Nigeria (between 20 and 26 percent), with many commentators calling for government intervention to support businesses through the crisis.

Nigerian President Buhari has announced moratoriums on loan repayments for federal government loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export-Import Bank.

For residents of Lagos, which is Nigeria's biggest city and one of the largest in Africa, the price of food has increased by up to 50% in some instances. Overall, Nigeria's informal sector has been badly affected, and locals have questioned the lockdown's effectiveness.

A key consideration for New Zealand exporters in coming weeks will be the impact on domestic supply chains for commodity and food product transport from Nigeria's main economic hubs to rural and inland areas, and the challenges any possible lockdown could have.

South Africa

South Africa reported more than 13,000 new cases of coronavirus on 23 July, taking the tally to above 408,000. With a population of nearly 58 million, it is the hardest-hit country in Africa and the fifth hardest-hit in the world.

According to health officials, the overall South African death toll from COVID-19 has neared 6,100.

South Africa will close schools again in response to a surge in coronavirus cases. In an address to the nation, President Cyril Ramaphosa said the current academic year will be extended beyond the end of 2020 due to disruptions caused by the pandemic.

Economy and trade

South Africa's economy is in for a challenging period. Already low GDP growth rates are likely to enter negative territory quickly, which will result in a contraction for the first time in 11 years. Moody's has cut the country's debt rating to junk status. The South African government has also announced it will recreate the heavily indebted South African Airways (SAA), which is in significant financial peril.

The South African rand has also dropped heavily against the US dollar, reaching its lowest rate in history. The New Zealand dollar has also strengthened to over 11:1 against the rand, which will have a negative impact for New Zealand exporters.

Positively, many commentators are pleased with the speed and decisiveness of the South African response, which will hopefully save the country from the worst of possible fallout.

On Tuesday 21 April, Cyril Ramaphosa announced a 500R billion (NZ$44 billion) support package, focused on unemployment and public services.

Supply chain, logistics and freight

South Africa has confirmed that all sea freight can continue to enter the country – while previously, only essential goods had been allowed. Sanitisation procedures have been introduced at ports. The port of Cape Town, which is currently a COVID-19 hotspot, has sent infected workers home, resulting in delays with the unloading of freight. Otherwise, seaports are generally operating at slightly reduced capacity, with slower processing times as a result of increased public health measures.



Additional resources

Below you can find information and contact details for other New Zealand government and international agencies regarding their response to COVID-19.

New Zealand Government agencies

Covid19.govt.nz
COVID-19 helpline for businesses
Business.govt.nz
New Zealand Customs
Ministry for Primary Industries (MPI)
New Zealand Export Credit (NZEC)
MFAT Export Helpline
MFAT Safetravel
Callaghan Innovation
Immigration
Ministry of Health
WorkSafe New Zealand
myNZTE

Global agencies

World Health Organization (WHO)
Centers for Disease Control and Prevention (CDC)

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.