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Coronavirus outbreak: Why Kenya tops Africa in exposure

By People Reporter
Wednesday, February 12th, 2020
China’s coronavirus outbreak is likely to manifest through a fall in tourist arrivals. Photo/PD/FILE

John Otini

ECONOMY: Kenya’s economy is the most vulnerable in Africa to China’s coronavirus outbreak, a new study from the Overseas Development Institute shows.

The study titled: Economic vulnerabilities to health pandemics: Which countries are most vulnerable to the impact of coronavirus? shows that Kenya is the sixth most vulnerable country in the world to coronavirus outbreak.

“Taking these indicators together, we present an overall vulnerability index. Sri Lanka, Philippines and Vietnam, followed by Kazakhstan, Kenya, Cambodia and Nepal, top this index as the most vulnerable countries in economic terms,” says the report.

Physical exposure

Vulnerability stems from the high risk of physical exposure due to Nairobi’s transport hub status and the fact that it is one of the least prepared countries to deal with the virus.

Kenya’s imports of electronics and surgical gear are currently stuck in China because suppliers have never returned from New Year celebrations due to travel restrictions.

As downside risks to China’s (A1 stable) growth forecasts increase, there will be reverberations for economies globally, given its role as a very significant source of final demand.

“The most immediate economic implications from the coronavirus outbreak will manifest through a fall in tourist arrivals from, and weaker exports of goods to China and other economies integrated into the Chinese supply chain,” says Anushka Shah, a Moody’s Vice President and Senior Analyst.

Moody’s current baseline assumption is for the economic impact of the outbreak to continue for a number of weeks, after which normal activity will gradually resume.

For example, low- and middle-income countries in sub-Saharan African risk losing Sh42 billion in Exports as a result of a 1 per cent fall in Chinese demand.

 Edward Mudibo, managing director of East Africa Tea Trade Association says China’s near absence in global markets will reduce the prices of nearly everything, pulling down returns  from tea exports and other products.

“We have been in talks to expand our tea exports to China after witnessing rising demand,”he added.

 Kenya’s small businesses which import merchandise from China to sell in Kenya will feel the pinch due to shortage of stock.

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