Corona Virus (COVID-19) in Africa and AATIF's preparation for the pandemic.

The COVID-19 pandemic continues to have severe consequences to the real economies across the continent. With borders being shut, flights grounded, and the continued enforcement of quarantine measures, concerns remain on the socio-economic damage it will cause.

It comes as no surprise that people would turn to technology to mitigate the impact of the pandemic on their livelihoods. For one, digital channels have bridged the gap for many small and medium businesses regarding access to funding, especially at a time when liquidity is tight in the market. For instance, in Kenya many online lending platforms have redirected resources to fund SMEs facing liquidity crunches. Such solutions, however, left out many individuals to whom services were suspended. A huge customer base has been left with no alternative other than to handle their cash flow situation on their own. Banks cannot cater to that subset as such customers would be categorized as high risk as of now. We have no doubt that it speeds up change though, as many banks across the continent have introduced or increased digital solutions to accommodate changing consumption behaviors.

Another effect we observe is a greater focus on food security following the disruption of food supply chains and the locust invasion in the Horn of Africa. Many businesses are innovating using digital channels to ensure consumers gain access to quality produce. Farmers are relying on SMS alerts and mobile applications to access extension services and quality inputs, especially in peri-urban and remote areas. Companies such as a South African startup are addressing logistical challenges resulting from measures implemented to mitigate the spread of the virus. The company launched an app to monitor food waste while produce is on transit.

In Kenya, Jumia and Twiga Foods partnered to increase the scope of produce delivered from farmers to the market, while in Nigeria a food logistics company, Kobo360, got accepted into a global network that could potentially assist them scale up the business.

As AATIF, we are continuing to work with our Partner Institutions as they navigate their way through this time of crisis. What were initially deemed as merely potential effects on their businesses, employees, and supply chain partners are gradually being realized or drawing concern for the future. As the uncertainty of the situation becomes more apparent, we observe reduced commitment and activity from investors. Consequently, liquidity is also not finding its way to where it is needed most urgently. While AATIF is well positioned to work with corporates and intermediaries other than banks, the long-term effects are still unclear. In the meantime, we remain committed to working with our network of partners across the continent to continue delivering financial solutions to the benefit of African farmers and enterprises in the food value chains.


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