Namibia Logistics Association

2020/17 Coronavirus and the World Economy

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/CountryCases27 FebCases26 MarCases30 AprCases28 MayCases25 JuneCases2 July
China78 49981 28582 86282 99583 44983 537
Europe556246 3271 219 2781 509 0131 647 9921 685 648
Africa 1 00536 703121 077329 888410 510
North America7489 4781 116 1691 833 3222 564 9502 884 224
Rest of the World2 49553 322766 5722 243 6964 916 8845 746 079
Total82 183471 4173 221 5845 790 1039 543 16310 809 998


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/CountryDeaths27 FebDeaths26 MarDeaths30 AprDeaths30 AprDeaths/25 June Deaths/2 July
China2 7473 2874 6334 6344 6344 634
Europe1414 143131 603165 662179 129180 698
Africa 281 5773 6638 85610 328
North America[1]1 33464 665108 872132 766139 413
Rest of the World432 50325 80574 601159 901183 607
Total2 80421 295228 263357 432485 294519 050


[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 countryCases30 AprCases28 MayCases25 JunCases2 JulDeaths30 AprDeaths28 MayDeaths25 JunDeaths2 Jul
South Africa5 35025 937111 796159 3331035522 2052 749
DRC4912 5466 2137 1223068142175
Zambia971 0571 4891 63271830
Madagascar1286121 7872 30321620
Malawi361019411 265341116
Total7 20031 868125 465175 7721736762 4523 061


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

CountryDeaths/1M pop.Total cases/1M pop.
United Kingdom647 
Qatar 34 548
Bahrain 16 118
Chile 14 754
Kuwait 10 992
Peru 8 749
South Africa462 687

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

Winners for Namibia  
Energy: Brent oil6.18%-33.80%

 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 indicators2019 Q42020 Q1Difference
Prime lending rate 10.25%9.00%-1.25%
Average lending rate9.70%9.37%-0.33%
Average 91 T-Bill rate7.64%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