Four big cargo ships that supply goods from China have failed to dock at
Mombasa port for the second month in a row. PHOTO | FILE | NMG
Four big cargo ships that supply goods from China have failed to
dock at Mombasa port for the second month in a row following the
coronavirus outbreak, pointing to a possible surge in prices of consumer
goods in the region.
Mombasa is the
gateway through which Kenya, Uganda, South Sudan, Rwanda and parts of
Tanzania, Ethiopia and the Democratic Republic of Congo import their
goods.
East African Countries import a
wide range of goods from China including consumables, electronics,
construction materials, vehicle spare parts, clothing, furniture,
kitchenware, raw materials and machinery.
The Kenya Ports Authority (KPA), in a response to The EastAfrican
queries, said the four Chinese ships have not docked at the Mombasa
Port in January and February, implying eight shipments have failed to
arrive during the two months.
Most Chinese factories are on lockdown as Beijing scrambles to contain the outbreak, disrupting supply chains across the world.
“The
port of Mombasa receives three big dischargers (imports) from China
under Evergreen Line and one COSCO ship on a monthly basis. These four
ships have not called since the coronavirus effect in China,” said the
KPA managing director Daniel Manduku.
China Ocean Shipping Company (COSCO) is a Chinese State-owned shipping line.
Coronavirus has infected more than 81,000 people globally in about 44 countries, killing more than 2,800.
KPA predicts that the downturn in imports from China will become clearer in March.
“There
is an anticipated effect on the throughput in the following months from
February given the reduced trading volumes with China as a major
trading partner,” said Mr Manduku.
A
study by the UK-based independent think tank, Overseas Development
Institute (ODI), shows that Kenya, Tanzania, Rwanda, Burundi and Uganda
are among the world’s 97 economies that are most exposed to a Chinese
slowdown either directly or indirectly.
In 2019, China’s trade with Africa stood at $208 billion, while exports were estimated at $113.2 billion.
The
report, which was released this February, shows that sub-Saharan Africa
faces losses in exports of goods worth $4 billion and $600 million in
tourism exports due to the coronavirus.
Other African countries most exposed to the coronavirus disruption include Angola, Congo, Sierra Leone, Lesotho and Zambia.
For instance, 60 per cent of Angola’s total exports are to China and 10 per cent of tourists are from China.
According
to the report, Kenya’s foreign direct investments (FDI) inflows from
China is estimated at 1.85 per cent of the gross domestic Product (GDP)
while its exports stand at 13.18 per cent of GDP.
Personal
remittances from China are estimated at 3.09 per cent of GDP, while
migrants as a percentage of the population stands at 2.35 per cent.
Kenya’s international tourism receipts from China as a percentage of total exports stands at 14.98 per cent.
Nairobi’s
exports to the Asian nation in January declined by 44,000 tonnes (11.3
per cent) compared with the same period last year, largely due to
decreased sales of Titanium by 53,000 tonnes (80 per cent) and Soda ash
by 25,701 tonnes (98 per cent).
“We
have also lost an average two ships call for loading at Base Titanium.
We have not quantified the business loss yet, however, if the virus
threat is not contained soon, we expect reduced number of vessels
calling especially from China, hence a volume reduction which will also
affect revenue collected,” said KPA.
EMPTY SKIES
The
ODI report shows that there is a large amount of travel between China
and Africa, with hubs such as Addis Ababa, Cairo and Nairobi being
particularly at risk owing to the large number of Chinese travellers
that pass through these airports. African carriers that have cancelled
flights to China include RwandAir, Kenya Airways, Royal Air Maroc,
EgyptAir, Air Madagascar and Air Mauritius.
Air Tanzania has postponed its maiden flight to China.
Globally, Virgin Atlantic, Germany’s Lufthansa, Air France and KLM SA, have also stopped flying to China.
Kenya
Airways has already lost more than $8 million in revenues after the
loss-making national carrier suspended all flights to and from
Guangzhou, China, with effect from January 31, as a precaution against
the deadly Coronavirus 2019 outbreak. The China Southern Airlines
resumed flights from Guangzhou to Nairobi on February 26 but a court
order issued on Friday again suspended the flights. Globally, the
International Air Transport Association (IATA) forecast the industry is
set to lose $29 billion worth of passenger revenues this year, of which
$40 million will be linked to African airlines.
According
to IATA, carriers outside the Asia-Pacific are forecast to bear a
revenue loss of $1.5 billion, assuming the loss of demand is limited to
markets linked to China.
Global
traffic is forecast to decline by 4.7 per cent, causing the first
overall decline in demand since the Global Financial crisis of
2008-2009.
Kenya’s Ministry of Health has so far investigated 17 alerts and all have tested negative for COVID-19.
The viral outbreak has hit Kenyan traders hard.
“Business
is not good. There are no imports coming in from China. Normally we
import a lot of electronics, spare parts, computers, cartridges and
cosmetics from China but we don’t have goods coming in now. No goods at
all,” said the chief executive of Importers and Small Traders
Association of Kenya, Sammy Karanja, said.
He
added that the small traders have lost Ksh30 billion ($300 million)
worth of imports, which have declined by as much as 80 per cent in the
past two months.
“We are looking for
new markets to remain in business. Right now we can’t travel to China
because of the travel advisories. We have to diversify our markets
because that is the only way to survive,” said Mr Karanja.
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