ECS3702
Assignment 2
Semester 2 2025
Due 22 September 2025
, Question 1
Trade Effects of COVID-19 on South Africa
The COVID-19 pandemic profoundly disrupted trade in developing economies such as
South Africa, primarily through three interrelated channels: reduced global demand,
supply chain disruptions, and commodity price volatility.
Export performance weakened sharply in 2020 as South Africa’s major trading partners
entered strict lockdowns, resulting in contractions in global industrial activity. Mineral
exports—particularly platinum and gold, which form the backbone of South Africa’s
export basket—declined by approximately 20%. Simultaneously, imports contracted due
to the domestic recession and a depreciating rand, although imports of essential goods,
especially medical supplies, increased as healthcare demands intensified.
Direct trade disruptions arose from border closures, port delays, and logistical
constraints, while indirect effects stemmed from the global recession. Reduced
international demand for commodities, combined with the collapse of the tourism
sector, further compounded the external shock. Although recovery commenced in 2021
with vaccine rollouts and fiscal stimulus in advanced economies, persistent supply
bottlenecks and uneven global recovery extended the effects into 2022.
1
Assignment 2
Semester 2 2025
Due 22 September 2025
, Question 1
Trade Effects of COVID-19 on South Africa
The COVID-19 pandemic profoundly disrupted trade in developing economies such as
South Africa, primarily through three interrelated channels: reduced global demand,
supply chain disruptions, and commodity price volatility.
Export performance weakened sharply in 2020 as South Africa’s major trading partners
entered strict lockdowns, resulting in contractions in global industrial activity. Mineral
exports—particularly platinum and gold, which form the backbone of South Africa’s
export basket—declined by approximately 20%. Simultaneously, imports contracted due
to the domestic recession and a depreciating rand, although imports of essential goods,
especially medical supplies, increased as healthcare demands intensified.
Direct trade disruptions arose from border closures, port delays, and logistical
constraints, while indirect effects stemmed from the global recession. Reduced
international demand for commodities, combined with the collapse of the tourism
sector, further compounded the external shock. Although recovery commenced in 2021
with vaccine rollouts and fiscal stimulus in advanced economies, persistent supply
bottlenecks and uneven global recovery extended the effects into 2022.
1
