Africa

General region overview

Key African export markets for New Zealand, including South Africa and Egypt, have been seriously affected by the COVID-19 pandemic. 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.

Remittances are also an important source of financial inflow for several Sub-Saharan African countries. As a result of the global recession and job losses, these are expected to drop in 2020, posing a significant economic challenge to countries in Africa that depend on them.

There are a number of other risks for the continent overall, particularly given the reliance on imported foodstuffs and medical/pharmaceutical products.

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 the long run.

Read the latest report prepared by the Ministry of Foreign Affairs and Trade to learn more about the impacts and opportunities that have arisen in Africa following the COVID-19 pandemic.

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


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 Central Agency for Public Mobilisation and Statistics (CAPMAS) reported that unemployment in Egypt has increased to 9.6 percent in the second quarter of 2020, compared to 7.5 percent in the same period last year. Lockdown measures imposed to confront the COVID-19 pandemic, including the suspension of schooling and flights, partial closure of shops, and bans imposed on transportation, have all caused unemployment to rise.

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

Egyptian and foreign travellers are required to present a negative PCR test result to be allowed into Egypt, which should be conducted at least 72 hours before arrival.

Visa fees have been waived until 30 April 2021 for tourists visiting the governates of South Sinai, the Red Sea, Luxor and Aswan.

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.

Tourism

All museums and archaeological sites have reopened, after a five-month closure amid strict health measures. Visitors are required to wear face masks and have their temperature taken before they are allowed into museums and indoor sites. Precautions also include allowing a maximum of 100 visitors per hour in museums and indoor sites, and 10 to 15 in ancient tombs or pyramids.

The Egyptian government has extended the duration of a number of policies and incentives designed to boost the country's struggling tourism sector, which has been badly affected by the coronavirus pandemic.

In addition to the waiving of visa fees for tourists visiting key destinations, businesses that operate within the tourism industry, including hotels, will not have to pay any fees or electricity, water and gas bills until 31 December 2020. All debts owed by companies in the tourism sector, including amounts accrued before the pandemic began, will be rescheduled, with no repayments due until 1 January 2021.

A flight incentive program, which includes discounted airport fees for airlines, has also been extended until 31 December.

Egypt's government says its decision to extend these measures beyond the previously announced end date of 31 October is designed to support the Egyptian winter tourism season, which runs from 1 November to 30 April.

The global tourism sector has been particularly badly affected by the effects of the pandemic. It is vital to the economies of many nations, including Egypt, but has effectively been closed down due to lockdowns and travel restrictions around the world.



Algeria

Algerian authorities took further measures to ease the country's COVID-19 lockdown on 1 September. This included lifting bans on some cultural activities, with museums and libraries allowed to reopen. Nurseries also reopened at 50 percent capacity.

This follows an easing of other lockdown restrictions in August, including shortened curfew hours, resumption of provincial travel and reopening of some businesses, mosques, leisure venues and beaches. However, social distancing and masks remain compulsory.

Algeria has set 1 November as the date for a referendum on a new constitution aimed at boosting democracy and giving parliament a greater role. President Abdelmadjid Tebboune, who was elected last December, has repeatedly pledged to introduce political and economic reforms.

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).

Nigeria

Nigeria is likely to be hit hard by the global oil price decline prompted by the COVID-19 pandemic, 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 effectiveness of recent lockdown measures.

A key consideration for New Zealand exporters in the coming months 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 that possible future lockdowns could pose.

South Africa

Although its number of confirmed COVID-19 cases is now reducing, South Africa remains the worst-affected African country. In July and August 2020 it registered the fifth highest number of coronavirus cases globally behind the United States, India, Brazil and Russia.

South Africa implemented one of the fastest and strictest responses to the COVID-19 pandemic in March, closing its borders and imposing a nationwide lockdown before it announced its first death from the disease. The two-month lockdown negatively impacted Africa’s most industrialised economy, particularly the country’s poorest, prompting the government to partially lift the lockdown at the start of June in a bid to revive the economy.

In August, President Cyril Ramaphosa announced the removal of lockdown restrictions, stating that South Africa had reached the peak of COVID-19 infections. This included an end to bans on alcohol and tobacco, and allowing restaurants to return to normal business subject to strict hygiene regulations.

Inter-provincial travel was reopened on 17 August when South Africa entered level 2 lockdown, and President Ramaphosa has announced that international travel will resume from 1 October. Those arriving in South Africa must present a negative COVID-19 test taken within three days of travel.

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

Economy and trade

The South African economy is expected to rebound strongly in the third quarter, but with the South African Rand remaining close to its highest levels since the pandemic began, the currency risks falling sharply if debt forecasts contained in October's budget are taken badly by the market.

South Africa's leading business cycle indicator rose by 3.7% in August, building on the 2.6% increase seen in July, with the indicator's main components signalling an expansion of economic activity midway through the third quarter.

Continued gains for South Africa's leading indicator follow a recovery of retail spending for August and have contributed to increased optimism about the economy's recovery prospects.

Prices for South Africa's export commodities improved in August, while business confidence, job advertisements and vehicle sales all rose. The manufacturing sector has also experienced a recovery, with order books beginning to expand and the number of hours worked rising.

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. 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.