Winners and losers in war on Covid-19

Arusha. It is a global pandemic which has hit a number of sectors. Yet, there are also some winners as the world battles Covid-19

Food producers and processors, manufacturers of medical items and the increasingly strong ICT sector are arguably cashing in on the pandemic.

In fact, the ICT is capitalising on the lockdown that has reduced physical contacts globally to facilitate communication, online training and video conferencing.

This is the evident scenario with Covid-19 currently ravaging the world - and which had, as of yesterday, killed 153,000 people across the world, seven in Tanzania.

As clearly outlined by Finance and Planning minister Phillip Mpango in Parliament two weeks ago, a number of economic sectors have already been adversely affected by the spread of coronavirus which causes Covid-19, and the government was closely watching the situation with a view to coming up with concrete measures.

He said it was vivid that there was already a problem in the tourism sector and its value chain.

“We have also seen a challenge with revenues accrued from business undertakings, locally and internationally… The aviation sector is affected and so is horticulture and industrial production,” said Dr Mpango.

Dr Mpango told Parliament UNECA projects that Africa’s economic growth will slow down by two or three percent this year, while the International Monetary Fund (IMF) says the world will go into recession in 2020.

The tourism and the hospitality industries - which are the leading sectors of the economy in terms of foreign exchange earnings - are main losers in the Covid-19 equation.

The two - which are largely dependent on foreign visitors - earned $2.4 billion in 2018, up from $2.19 billion in the previous year.

“For our economy, the impact is more pronounced in the tourism sector,” asserted a former MP and currently a corporate lawyer based in Arusha, Mr Mustapha Akunaay.

Tourism has been losing not only from massive cancellations of bookings, but also from the suspension of flights by major world airlines due to the Covid-19 scare.

Mr Akunaay, a former CEO of the Tanzania Association of Tour Operators (Tato), urges government intervention to rescue the sector through a raft of tax reliefs.

Equally hit are the aviation/maritime sectors which are intrinsically linked to tourism, since most visitors from abroad use these modes of transport.

Local and regional business analysts believe Covid -19 has also seriously impacted the construction industry: another key economic sector with high capital investments.

The East African Business Council (EABC) - a think tank based in Arusha - says mega construction projects carried out by Chinese firms have been disrupted by the pandemic.

“Many of the projects will slow down due to the disruption of the flow of capital goods from China,” the Council said in a recent update. China is where the new coronavirus malady originated last December.

Another big blow has been to the education sector as the epidemic has forced the government to close all education institutions indefinitely. This was not factored in the economy.

Prof Jafari Kideghesho, Rector of the Moshi-based College of African Wildlife Management (CAWM), sees the schools closure not only impacting academic activities.

“Public revenues will also be significantly reduced, thus affecting implementation of planned development projects,” he told The Citizen when reached via e-mail.

Prof Kideghesho did not agree entirely with the online training option which was adopted after most education institutions suspended learning activities.

“This option is limited by the fact that our training is competition-based. Only some theoretical aspects can be conducted online,” he said. Challenges facing the education sector are that it is so far not clear as to when the schools and colleges will re-open - and the economic cost of the closure is most likely to be enormous.

Tanzanians are also anxious as to how the next (2020/21) financial year’s budget would cope with the crisis which has already seen tens of thousands of workers losing their jobs.

The real estate sector has also been badly hit, as many firms have either closed down or are short of cash with which to pay rent.

But some economic analysts had a suggestion on how to navigate around the problem - and ensure that tenants can cope, and landlords remain in business.

“It is time that owners of huge office blocks reduced their rents so as to remain fluid in the market,” said an economic analyst based in Arusha.

He cited as examples office blocks owned by public institutions, andsome of which have become ‘white elephants’ for lack of tenants.

The East African Community (EAC) believes that the Covid-19 impact can be minimised through increased food production and investment in food-related industries. Other measures should include up-scaled trade in food and other agricultural products, as well as the reduction of import tariffs on essential goods - among other functional measures.