Coronavirus and the World Economy
The coronavirus has arrived in the most remote place of the World and 213 countries and territories are affected. Namibia has now 285 cases and South Africa 159 333. China reported an increase of 88 new cases. The latest cases and deaths are the following:
Table 1: Coronavirus cases – 27 February – 2 July
| Region/Country | Cases27 Feb | Cases26 Mar | Cases30 Apr | Cases28 May | Cases25 June | Cases2 July |
| China | 78 499 | 81 285 | 82 862 | 82 995 | 83 449 | 83 537 |
| Europe | 556 | 246 327 | 1 219 278 | 1 509 013 | 1 647 992 | 1 685 648 |
| Africa | 1 005 | 36 703 | 121 077 | 329 888 | 410 510 | |
| North America | 74 | 89 478 | 1 116 169 | 1 833 322 | 2 564 950 | 2 884 224 |
| Rest of the World | 2 495 | 53 322 | 766 572 | 2 243 696 | 4 916 884 | 5 746 079 |
| Total | 82 183 | 471 417 | 3 221 584 | 5 790 103 | 9 543 163 | 10 809 998 |
Source: worldometers.info
From the middle of March the epicentre of the coronavirus has shifted from China to Europe, the US and then to the rest of the World with 53.2% of all reported cases. The US reported 2 779 953 cases and 130 798 deaths. Only 3.8% of the reported cases and 2.0% of the deaths are on the African continent; however one should keep in mind that testing is not done as expected, especially in Tanzania where since 9 May no new case was reported.
Table 2: Coronavirus deaths – 27 February – 2 July
| Region/Country | Deaths27 Feb | Deaths26 Mar | Deaths30 Apr | Deaths30 Apr | Deaths/25 June | Deaths/2 July |
| China | 2 747 | 3 287 | 4 633 | 4 634 | 4 634 | 4 634 |
| Europe | 14 | 14 143 | 131 603 | 165 662 | 179 129 | 180 698 |
| Africa | 28 | 1 577 | 3 663 | 8 856 | 10 328 | |
| North America[1] | – | 1 334 | 64 665 | 108 872 | 132 766 | 139 413 |
| Rest of the World | 43 | 2 503 | 25 805 | 74 601 | 159 901 | 183 607 |
| Total | 2 804 | 21 295 | 228 263 | 357 432 | 485 294 | 519 050 |
Source: worldometers.info
[1] North America is Canada and the US
If the current trend continues the total number of deaths will be around 555 000 in a weeks’ time. The USA, Brazil, UK, Italy, Spain, France, Mexico and India have today 61.3% of the number of deaths reported in the whole World.
Slowly the coronavirus pandemic is reaching the African continent and all countries reported 410 510 cases and 10 328 deaths. There are only 175 772 cases reported in the SADC region and 3 061 deaths. South Africa is dominating SADC with 90.6% of the cases and 89.8% of the number of deaths. Tanzania has now for 6 weeks a consistent number of cases and this is a concern, clearly they are underreporting which is not a good reflection of the SADC region.
Table 3: Coronavirus cases and deaths in the SADC region – 30 Apr – 2 July 2020
| SADC country | Cases30 Apr | Cases28 May | Cases25 Jun | Cases2 Jul | Deaths30 Apr | Deaths28 May | Deaths25 Jun | Deaths2 Jul |
| South Africa | 5 350 | 25 937 | 111 796 | 159 333 | 103 | 552 | 2 205 | 2 749 |
| DRC | 491 | 2 546 | 6 213 | 7 122 | 30 | 68 | 142 | 175 |
| Zambia | 97 | 1 057 | 1 489 | 1 632 | – | 7 | 18 | 30 |
| Madagascar | 128 | 612 | 1 787 | 2 303 | – | 2 | 16 | 20 |
| Mozambique | 76 | 227 | 762 | 903 | – | 1 | 5 | 6 |
| Malawi | 36 | 101 | 941 | 1 265 | 3 | 4 | 11 | 16 |
| Eswatini | 91 | 272 | 690 | 840 | 1 | 2 | 7 | 11 |
| Tanzania | 480 | 509 | 509 | 509 | 16 | 21 | 21 | 21 |
| Zimbabwe | 34 | 132 | 530 | 605 | 4 | 4 | 6 | 7 |
| Mauritius | 332 | 334 | 341 | 341 | 10 | 10 | 10 | 10 |
| Angola | 27 | 71 | 197 | 291 | 2 | 4 | 10 | 15 |
| Botswana | 23 | 35 | 92 | 227 | 1 | 1 | 1 | 1 |
| Namibia | 16 | 22 | 90 | 285 | – | – | – | – |
| Seychelles | 11 | 11 | 11 | 81 | – | – | – | – |
| Lesotho | – | 2 | 17 | 35 | – | – | – | – |
| Total | 7 200 | 31 868 | 125 465 | 175 772 | 173 | 676 | 2 452 | 3 061 |
Source: Worldometers.info
Graph one below illustrate that the peak has been reached and we are in a declining trend for 15 weeks already, especially the number of deaths.
Graph 1: Weekly change of the World’s coronavirus cases and deaths
The graph above depicts the weekly change since beginning of March 2020 in the whole World of reported cases and deaths. The situation is improving by the week.
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 can see that a third wave is not on the way as the WHO predicted eleven weeks ago. Which countries are the worst affected countries according to deaths and recorded cases? Belgium tops the list with the number of deaths per population and Qatar with the number of cases.
Table 4: Worst affected countries according to deaths and cases
| Country | Deaths/1M pop. | Total cases/1M pop. |
| Belgium | 842 | |
| United Kingdom | 647 | |
| Spain | 607 | |
| Italy | 575 | |
| Sweden | 532 | |
| Qatar | 34 548 | |
| Bahrain | 16 118 | |
| Chile | 14 754 | |
| Kuwait | 10 992 | |
| Peru | 8 749 | |
| South Africa | 46 | 2 687 |
| Namibia | – | 112 |
Source: Worldometers
If Namibia is serious of managing the coronavirus, they should be much more pro-active in testing and not only re-active.
The World economy is out of 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
The MSCI index was at 2401 on 22 February 2020 and closed on Wednesday at 2180, a fall of 9.3%.
Table 5: Selected international commodity prices
| Commodity | Monthly | Yearly |
| Winners for Namibia | ||
| Energy: Brent oil | 6.18% | -33.80% |
| Gold | 4.38% | 24.96% |
| Uranium | -6.41% | 28.16% |
| Copper | 10.00% | 2.20% |
| Losers | ||
| Lead | 3.37% | -5.79% |
| Zinc | 2.23% | -14.99% |
Source: Trading economics. 2 July 2020
The commodity prices relevant to Namibia reached a turning point ten weeks ago and copper prices improved for the year by 2.2%. The exchange rate was strengthening for the week. The N$ is currently trading 17.04 to the US Dollar and 19.19 to the Euro.
The bank of Namibia published the Quarterly Bulletin for June and all signs are that the Namibian economy has not reached its lowest point/turning point yet.
Graph 4: Quarterly vehicle sales
New vehicle sales reached a 16 year low and one can expect that the third quarter shows hopefully some improvement.
Graph 5: Ratio of non-performing loans
Source: Bank of Namibia
The commercial banks are under stress as 4.5 years of no growth and wrong economic policies affect not only the private sector in general, but also the banking sector.
Table 6: Financial sector indicators
| Financial sector indicators | 2019 Q4 | 2020 Q1 | Difference |
| Prime lending rate | 10.25% | 9.00% | -1.25% |
| Average lending rate | 9.70% | 9.37% | -0.33% |
| Average 91 T-Bill rate | 7.64% | 7.67% | +0.03% |
Source: Bank of Namibia
Although the Bank of Namibia dropped the prime lending rate by 1.25%, the average lending rate dropped only by 0.33%, thus making monetary policy ineffective during the corona crisis. Treasury Bills (91 days) increased by 0.03% indicating that the market is tight and a bigger risk is anticipated. The main reason for the risk is the rising financial risks for the banking sector itself. The ratio of non-performing loans to total loans reached 5.2% in the first quarter of 2020, the highest since independence. This also explains that the monetary policy during COVID 19 has become ineffective since the commercial banks are sailing themselves close to the cliffs.
Compiled by: Rainer Ritter
2 July 2020