Coronavirus outbreak could heavily disrupt Rwanda-China trade

On 13 February 2020 at 09:18

The outbreak of the Coronavirus also known as COVID-19 in China continues to have a ripple effect on human beings and their activities and has triggered a global trade crisis given that China is the world’s second-biggest economy, with a GDP of $13.6 trillion.

Apart from local public transport companies operating in China, many airlines across the globe that flew to China suspended their flights to curb the spread of the virus.

Since its outbreak, Coronavirus has claimed the lives of 1114 people while 44370 are infected. The symptoms include respiratory difficulties and pneumonia which frequently leads to death. So far, no remedy or vaccine has been identified.

China reported that 4740 patients who were infected with the virus have now recovered and sent back home and that the number of new infections have reduced by 48.2% between February 4th and February 11th, 2020.

Robert Bapfakurera, chairman of the Rwandan Private Sector Federation(PSF) told IGIHE that flights to China were suspended as China began its Lunar year on January 22nd and that it was expected that business would resume by February 2nd.

“Holidays to celebrate the Chinese New Year were supposed to end on February 2nd but until now, the business has not resumed. News says the holidays will end on February 23rd.
However, even though the effects of Coronavirus in China are not palpable yet, business owners in Rwanda have started shipping products from Dubai in the United Arab Emirates.”

Bapfakurera says the products Rwanda imports from China are mostly clothes, shoes, and home accessories. Since most business owners had ordered shipments before the holidays began, the effect of the Coronavirus has not been yet felt but with time, the economy will greatly be affected.

Muhimpundu Rose who has been shipping shoes from Guangzhou, China for four years now said that the price of shoes has escalated due to the virus.

“There is nowhere else we can import shoes from and the price have been hiking ever since the outbreak of the virus. A pair of shoes which cost Rwf 15,000 costs Rwf 20,000 now.”

Hitayezu Gerald who also ships shoes and clothes from China says the effects haven’t been felt yet but that he is worried for days to come if no vaccine or remedy is found.

On the other side, some business owners condemn their counterparts for exaggerating the matter at hand but concede that if no remedy is found in the next few months, a loss will be inevitable.

Heart of Africa Trading (HAT) is a shipping company that was founded in 2018 links Rwandan business owners to Chinese manufacturers and companies and helps them to import products in bulk.

Jeanne Izabiriza, HAT Chief Executive Officer said that the outbreak of the virus is an alarming situation.

“We had shipping containers en route to Rwanda but since the Chinese holidays have been extended, we have no communication to when they will get here.”

She said that if nothing is done to curb the virus, business owners will resort to shipping from Dubai even though their prices are slightly higher and that it might lead to a surge in prices on the Rwandan market.

Bapfakurera of PSF also says if the matter worsens, business owners will switch to other markets including Dubai, India, and Turkey. He said that PSF is negotiating with the government of Rwanda to reduce tax on imports to ease shipment once sellers start importing from other markets.

Shipping companies that carry goods from China have reduced the number of vessels in order to curb the spread of the virus and it is widely affecting the global economy. Bapfakurera said that goods are stranded in China.

China has seven container ports but with measures taken to contain the virus, they might remain vacant and it will, therefore, reduce the demand for containerized goods.

If the crisis persists, not only will businesses in Rwanda be affected but it will irreversibly disrupt the global supply chain.

Robert Bapfakurera, chairman of the Rwandan Private Sector Federation(PSF) said that flights to China were suspended as China began its Lunar year on January 22nd.