Namibia Logistics Association

2020/06 Coronavirus and the World Economy

Coronavirus and the World Economy

The coronavirus has arrived in the most remote place of the World and 210 countries and territories are affected. Namibia has now 16 cases and South Africa 2 506. China reported that their economy starts to normalize but a decline in export orders is a major problem.  Namibia is in its 20th day of a total lockdown and this was extended to the 4th of May. The latest cases and deaths are the following:

Table 1: Coronavirus cases – 27 January – 16 April

Region/CountryCases27 JanCases27 FebCases26 MarCases2 AprCases9 AprCases16 Apr
China4 58178 49981 28581 58981 86582 341
Europe556246 327490 714729 443932 464
Africa  1 0054 68711 34416 825
North America 7489 478256 160454 598672 727
Rest of the World2 49553 322117 280242 192380 387
Total4 58182 183471 417950 4301 519 4422 084 744


From the middle of March the epicentre of the coronavirus has shifted from China to Europe and then to the US. Currently 45% of all reported cases are in Europe and 66% of the total deaths.  The US reported 644 348 cases and 28 554 deaths. Only 0.8% of the reported cases are on the African continent; however one should keep in mind that testing is also not a virtue. 

Table 2: Coronavirus deaths – 27 January – 16 April

Region/CountryDeaths27 JanDeaths27 FebDeaths26 MarDeaths2 AprDeaths9 AprDeaths16 Apr
China1062 7473 2873 3183 3353 342
Europe1414 14334 40661 06188 171
Africa  28177549909
North America[1] 1 3346 24915 23229 564
Rest of the World432 5034 1267 81012 699
Total1062 80421 29548 27688 536134685


[1] North America is Canada and the US

If the current trend continues the total number of deaths will be around 170 000 in a weeks’ time. The USA, Spain, Italy, France and the UK have today 73.5% of the number of deaths reported in the whole World. 

Africa was out of limelight in the beginning and Egypt reported the first cases. Slowly the coronavirus pandemic is reaching the African continent and all countries reported 16 825 cases and 909 deaths. How is the virus spreading in the SADC region? There are only 3 472 cases reported in the SADC region and 78 deaths.

Table 3: Coronavirus cases and deaths in the SADC region – 2 – 16 April 2020

SADC countryCases2 AprCases9 AprCases16 AprDeaths2 AprDeaths9 AprDeaths16 Apr
South Africa1 3531 8452 50651834
Total1 7912 5553 472235278


Each country of the World announced policies and regulations to fight the spread of the coronavirus. Spain restarted its economy on Monday by allowing the manufacturing and construction sector to operate again. Austria and Denmark lifted certain restrictions on Tuesday and many other countries are partially lifting the lockdown and enabling certain sectors to conduct business. Namibia extended the lockdown to 4 May and many businesses are of the view this is not relevant to our local circumstances with only 16 reported cases and no deaths yet. Namibia had also a prolonged recession prior to the coronavirus pandemic and the majority of the businesses had a very weak balance sheet. Is the extension of the lockdown to the 4th of May an ‘overkill’? To answer this question let’s compare Africa with Europe on COVID 19 relevant criteria:   

Table 4: Comparing Africa with Europe

Population in million1341748
Coronavirus cases per capita0.000130.1
Coronavirus deaths per capita0.000070.0011
Tests conducted per 1 million39512 274
Urbanisation in %43.474.3
Age structure 0-54 years96.0%67.2%
Age structure 55 years plus4.0%32.8%

The big difference between Africa and Europe is that Africa is less urbanized (43.4%), only 4% of the population is older than 55 years (high risk) and on average Africa did only 395 tests per 1 million of the population in comparison to the average 12 274 tests of Europe. The average temperatures were also much higher in February compared to the average temperature in Europe. The concern should be the low testing rate in Africa and especially in Namibia to assess the real risks.

Is there light at the end of the tunnel? Yes, the World reached a turning point and most countries prepare themselves to get the economies going again. There is no indication yet that a third wave is coming in the rest of the World.

Graph 1: Weekly change of the World’s coronavirus cases and deaths

Source: Compiled from Worldometers data

The graph above depicts the weekly change since beginning of February 2020 in the whole World of reported cases and deaths. There is hope, since 2 April a decline in the growth of cases and deaths occurred. 

The real economic costs are spiralling and a World recession has become a reality, much worse than in 2009. Such dramatic economic implication of a lockdown of major economies has never been experienced before and the economic growth projections vary and are updated daily. The World economy will move into a severe recession as the MSCI World Index (below) is signalling. The MSCI World Index consists of the stock exchange performance of 28 countries. 

Graph 2: MSCI World Index

   Source: MSCI Index

The MSCI index was at 2401 on 22 February 2020 and closed yesterday at 1960, a fall of 18.4%. Substantial stimulus packages in the US, Japan and Germany had a positive influence on stock markets since 20 March. How long the short rally will last depends on market sentiment and the reporting of listed companies in the near future. 

Table 5: Selected international commodity prices

Winners for Namibia  
Energy: Brent oil-0.09%-60.02%

 Source: Trading economics. 16 April 2020 

The N$ is currently trading 18.7 to the US Dollar and 20.3 to the Euro.

The lockdown should have been only extended for a week and not until the 4th of May. The economic risks are mounting and we have to get our exports going. People are suffering in the informal sector and these risks are now much more severe than the health risks. Government should reconsider its policy to allow at least that the manufacturing, construction, mining and fishing sector can commence business by 22 April.   

Compiled by: Rainer Ritter           

16 April 2020