Namibia Logistics Association

2020/07 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 – 23 April

Region/CountryCases27 JanCases27 FebCases26 MarCases2 AprCases9 AprCases16 AprCases23 Apr
China4 58178 49981 28581 58981 86582 34182 798
Europe556246 327490 714729 443932 4641 090 873
Africa  1 0054 68711 34416 82524 894
North America 7489 478256 160454 598672 727889 282
Rest of the World2 49553 322117 280242 192380 387551 178
Total4 58182 183471 417950 4301 519 4422 084 7442 639 025


From the middle of March the epicentre of the coronavirus has shifted from China to Europe and then to the US. Currently 41% of all reported cases are in Europe and 60% of the total deaths.  The US reported 849 092 cases and 47 681 deaths. Only 0.9% 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 – 23 April

Region/CountryDeaths27 JanDeaths27 FebDeaths26 MarDeaths2 AprDeaths9 AprDeaths16 AprDeaths23 Apr
China1062 7473 2873 3183 3353 3424 632
Europe1414 14334 40661 06188 171110387
Africa  281775499091 237
North America[1] 1 3346 24915 23229 56449 655
Rest of the World432 5034 1267 81012 69918 352
Total1062 80421 29548 27688 536134685184263


[1] North America is Canada and the US

If the current trend continues the total number of deaths will be around 240 000 in a weeks’ time. The USA, Spain, Italy, France and the UK have today 72.7% 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 24 894 cases and 1 237 deaths. How is the virus spreading in the SADC region? There are only 4 999 cases reported in the SADC region and 122 deaths.

Table 3: Coronavirus cases and deaths in the SADC region – 2 – 23 April 2020

SADC countryCases2 AprCases9 AprCases16 AprCases23 AprDeaths2 AprDeaths9 AprDeaths16 AprDeaths23 Apr
South Africa1 3531 8452 5063 6355183465
Total1 7912 5553 4724 999235278122


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. The economic costs are spiralling and one can only hope that more testing is done to assess the risks and that we gradually opening up on the 5th of May or earlier.

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 one below illustrate that the peak has been reached and we are in a declining trend. We will not reach zero cases soon, but we have to manage the risks strictly. 

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 four week decline in the growth of cases and deaths occurred.

Graph 2: COVID 19 cases and deaths in Africa and the rest of the world

Source: Compiled from Worldometers data

From the data which is available one cannot see that a third wave is on the way as the WHO is claiming. The above graph will be included in the future weekly publications.

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 3: MSCI World Index

   Source: MSCI Index

The MSCI index was at 2401 on 22 February 2020 and closed on Tuesday at 1932, a fall of 19.5%. Markets are getting nervous again. The lockdown in many countries led to a decline in the demand for oil and on Monday the futures of Brent oil fell to US$ 40 and increased on Tuesday to US$ 17 a barrel. Storage capacity has reached its limits and Namibia will benefit through lower fuel prices in future. 

Table 4: Selected international commodity prices

Winners for Namibia  
Energy: Brent oil-20.13%-70.58%

 Source: Trading economics. 23 April 2020 

The commodity prices relevant to Namibia reached a turning point and with the weakening exchange rate one can probably see an increase in exports from May onwards.

The N$ is currently trading 18.8 to the US Dollar and 20.4 to the Euro. Economic growth can thus come in 2020 from declining imports and increasing exports due to the weakening exchange rate. The significant change in the exchange rate is shown in the graph below:

Graph 4: The N$ against the USD

Source: Bank of Namibia

The Rand was a reasonable strong currency until Jacob Zuma became the President in 2009 and the state capture started in South Africa. The appointment 2017 of Cyril Ramaphosa as President had as a result the strengthening of the Rand and the market expected that the SA economy will be management better. Moody’s downgrade of South Africa to junk status on 28 March of 2020 and the economic decline due to coronavirus pandemic saw the Rand tumbling to the current level of N$ 18.8 to the US$. 

Compiled by: Rainer Ritter           

23 April 2020