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The Coronavirus Crisis, A Crisis On The Global Economy

BY Soko Directory Team · March 31, 2020 11:03 am

In January 2020, the entire world was at a standstill as news flew in from all corners of the world that there had been an outbreak of a deadly virus in the 2nd largest economy in the world, China.

This most definitely threw a lot of panics all over, as most countries were more concerned about the virus getting inside their borders.

Countries were and still are very keen towards securing their borders and this has most definitely affected the movements in and out of different countries, both for people and goods. We all know that for inter-state trade to occur, there must be movement of goods between countries.

It is unfortunate yet quite evident that Corona Virus has crippled trade between most states. China’s economy, for example, which is the genesis of the virus, has been affected tremendously.

According to recent statistics, Reuters expect China’s growth rate to slump to 4.5 percent in the first quarter of this year from 6 percent in the previous quarter. That would be the slowest pace since the financial crisis. With much of the country in lockdown, the virus could affect up to 42 percent of China’s economy, according to Standard Chartered.

Given that China is the largest exporter in the world, the drop will definitely affect quite a number of countries that are great trading partners. Kenya, for example, has already had its fair share since China is Kenya’s biggest trading partner, accounting for 17.2 percent of Kenya’s total trade.

According to the statistics from the Kenya Tradenet System (KENTRADE), there is a notable decrease in the number of imports by Kenyans from China. In September 2019 Kenya had imported goods worth of 66 Billion Kenya shillings while in January the imports dropped to 54 Billion Kenya shillings.  Kenya not only imports from China but also exports to China.

Last year, we saw a huge increase in the export of Avocados to China due to the simplified processes for exporting that have been made possible by KenTrade’s Single Window System. This was not only a great boost to the economy at large but to the Avocado farmers in the country.

Kenya’s exports to China are mainly agriculture-based and include coffee, specialty teas, cut flowers, and avocado. Coronavirus is a big threat towards the trade and the economy at large. However, there is a lot of hope in getting the virus contained and as such, I believe that there is hope that all the economies will recover what they have lost.

Written by Lulu Kiritu, a PR and Communications Practioner

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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