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 11 714 cases and South Africa 685 155. The latest cases and deaths are the following:
Table 1: Coronavirus cases – 28 May –08 October
|Region/Country||Cases28 May||Cases25 June||Cases30 July||Cases27 Aug||Cases01 Oct||Cases08 Oct|
|China||82 995||83 449||84 165||85 004||85 414||85 500|
|Europe||1 509 013||1 647 992||1 866 609||2 214 400||3 518 217||4 046 301|
|Africa||121 077||329 888||874 804||1 204 134||1 480 015||1 518 457|
|North America||1 833 322||2 564 950||4 683 507||6 126 782||7 611 782||7 949 347|
|Rest of the World||2 243 696||4 916 884||9 678 841||14.705||21 529 765||22 801 978|
|Total||5 790 103||9 543 163||17.188||24.335||34 225 193||36 401 583|
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 62.6% of all reported cases. The US reported 7 776 224 cases and 216 784 deaths. Only 4.2% of the reported cases and 3.5% of the deaths are on the African continent and we are over the peak.
Table 2: Coronavirus deaths – 28 May –08 October
|Region/Country||Deaths28 May||Deaths25 June||Deaths30 July||Deaths27 Aug||Deaths/01 Oct||Deaths/08 Oct|
|China||4 634||4 634||4 634||4 634||4 634||4 634|
|Europe||165 662||179 129||184 792||186 461||196 461||200 314|
|Africa||3 663||8 856||19 649||28 566||35 737||37 017|
|North America||108 872||132 766||162 757||192 747||221 130||226 325|
|Rest of the World||74 601||159 901||297 375||417 268||561 432||592 273|
|Total||357 432||485 294||670 207||829 676||1 019 830||1 060 563|
If the current trend continues the total number of deaths will be around 1 117 000 in a weeks’ time. The USA, Brazil, UK, Italy, Spain, France, Mexico and India have today 65.7% of the number of deaths reported in the whole World.
The African continent reached a turning point and all countries reported 1 518 457 cases and 37 017 deaths. There are only 779 110 cases reported in the SADC region and 19 110 deaths. South Africa is dominating SADC with 87.9% of the cases and 90.2% of the number of deaths.
Table 3: Coronavirus cases and deaths in the SADC region – 30 July – 08 October 2020
|SADC country||Cases30 Jul||Cases27 Aug||Cases01 Oct||Cases08 Oct||Deaths30 Jul||Deaths27 Aug||Deaths01 Oct||Deaths08 Oct|
|South Africa||471 123||615 701||674 339||685 155||7 497||13 502||16 734||17 248|
|Madagascar||10 317||14 554||16 454||16 633||99||181||232||235|
|Zambia||5 249||11 376||14 759||15 224||146||282||282||335|
|Namibia||1 986||6 432||11 265||11 714||9||59||121||126|
|DRC||8 931||9 912||10 685||10 804||210||254||272||276|
|Zimbabwe||2 879||6 251||7 919||7 838||41||179||228||229|
|Mozambique||1 748||3 590||8 728||9 494||11||21||61||68|
|Malawi||3 738||5 474||5 773||5 803||103||173||179||180|
|Eswatini||2 551||4 387||5 617||5 482||40||88||109||113|
|Angola||812||2 332||5 725||4 972||33||103||183||211|
|Botswana||804||1 633||3 172||3 172||2||6||16||18|
|Lesotho||576||1 051||1 595||1 767||13||31||36||40|
|Total||511 681||683 685||766 096||779 110||8 235||14 910||18 534||19 110|
Graph one below illustrate that the peak has been reached and we are in a declining trend for 30 weeks.
Graph 1: Weekly change of the World’s coronavirus cases and deaths
The graph above depicts the weekly change since beginning of April 2020 in the whole World of reported cases and deaths. For the declining trend continued especially with the number of deaths.
Graph 2: COVID 19 cases and deaths in Africa and the rest of the world
Source: Compiled from Worldometers data
 North America is Canada and the US
From the data which is available one can see that the declining trend continuous with a slight increase in the deaths. Which countries are the worst affected countries according to deaths and recorded cases? Peru has replaced Belgium on top of the list with the number of deaths per population and Qatar with the number of cases. A high number of cases do not automatically mean a high number of deaths, as the Qatar example demonstrate.
Table 4: Worst affected countries according to deaths and cases
|Country||Deaths/1M pop.||Total cases/1M pop.|
|South Africa||290||11 514|
What is the trend in the Namibian reported cases of Covid-19? We can firmly establish already a turning point after 23 August and a strong declining trend is visible from the 3 day moving average.
Graph 3: The Namibian Covid-19 cases
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 4: MSCI World Index
The MSCI index was at 2403 on 22 February 2020 and closed on Wednesday at 2408, a slight increase of 0.2%. The improvement in stock markets is also supported by the monthly improvement of 52% in the Baltic Dry Index (The Baltic Dry Index provides a benchmark for the price of moving major raw materials by sea) and the Chinese economy is steaming ahead, contrary to the domestic economy.
Table 5: Selected international commodity prices
|Winners for Namibia|
|Energy: Brent oil||6.45%||-25.55%|
Source: Trading economics. 08 October 2020
The commodity prices relevant to Namibia reached a turning point seventeen weeks ago in the past four weeks prices weakened again coupled with the nervousness in the international stock markets. Oil prices increased in the past week and for the month by 6.45%. The exchange rate strengthened slightly this week and the N$ is currently trading 16.64 to the US Dollar and 19.58 to the Euro.
Towards the end of October the Mid-term budget review will take place and one can expect in the message by the Minister of Finance of how the domestic economy can be ‘ignited’ or how the economy will be ‘kick-started’. The recipe of accountants normally centre’s around expenditure, income and debt. Economists look at sectoral GDP, income, expenditure, debt, investment and how to grow the economy by addressing lacklustre exports and attracting investments.
Speaking to seasoned business people the answer will be trust, trust and trust. Namibia is at a crossroads and social capital or the soft drivers of economic growth must get more prominence in the debate of the future development path. Not only the business people emphasize governance, trust and the fight against corruption as essential building blocks for a better future, it is also the view of ordinary Namibians. The Afrobarometer Round 9 survey was conducted in August 2019 (two months before the Fish rot was in the news, and the 1200 respondents had the following view on the future direction of Namibia.
In 2012 (Afrobarometer 5) 71% of the respondents said that the country is moving in the right direction and the percentage increased in 2014 (Afrobarometer 6) to a high of 75%. In the second quarter of 2016 the Namibian started to go in a prolonged recession and it seems trust in the management of the economy receded. The answer to the question in 2017 (Afrobarometer 7) changed dramatically, only 40% of the respondents believed that the country was moving in the right direction, a drop of 30%. In 2019 only 17.4% were of the view that Namibia is moving in the right direction and 80.4% had the view that Namibia is moving in the wrong direction. The drastic change is depicted in the graph below:
Graph 4: The people of Namibia have no confidence in the government
If 80.4% of the Namibians believe we are moving in the wrong direction we have a crisis at hand, especially since the situation has worsened in 2020 due to Covid-19 and the rampant corruption.
On the question: “What are the most important problems facing the country that government should address”,the following top four problems (according to priority) were listed by the respondents in the last four surveys:
- Managing the economy
With the current economic depression due to Covid-19 and the Fish rot scandal that broke in November 2019, the perception on trust, corruption and managing the economy has probably changed again and worsened. It is interesting to note that land and housing does not feature on the priority list of the average Namibian, which is an indication that these issues are on the mind of politicians. Ordinary Namibians want jobs and NEEEB and land reform are not on their agenda. Namibia has to focus on creating jobs and income through productive work (not corruption) and that will assist to address distribution of income and overcome poverty and destitution.
Compiled by: Rainer Ritter
08 October 2020