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 12 406 cases and South Africa 708 359. The latest cases and deaths are the following:
Table 1: Coronavirus cases – 28 May –22 October
| Region/Country | Cases28 May | Cases25 June | Cases30 July | Cases27 Aug | Cases01 Oct | Cases22 Oct |
| China | 82 995 | 83 449 | 84 165 | 85 004 | 85 414 | 85 729 |
| Europe | 1 509 013 | 1 647 992 | 1 866 609 | 2 214 400 | 3 518 217 | 5 669 252 |
| Africa | 121 077 | 329 888 | 874 804 | 1 204 134 | 1 480 015 | 1 667 693 |
| North America | 1 833 322 | 2 564 950 | 4 683 507 | 6 126 782 | 7 611 782 | 8 790 773 |
| Rest of the World | 2 243 696 | 4 916 884 | 9 678 841 | 14.705 | 21 529 765 | 25 273 738 |
| Total | 5 790 103 | 9 543 163 | 17.188 | 24.335 | 34 225 193 | 41 487 185 |
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 62.2% of all reported cases. There is a second wave in Europe currently. The US reported 8 584 819 cases and 227 409 deaths. Only 4.0% of the reported cases and 3.6% of the deaths are on the African continent.
Table 2: Coronavirus deaths – 28 May –22 October
| Region/Country | Deaths28 May | Deaths25 June | Deaths30 July | Deaths27 Aug | Deaths/01 Oct | Deaths/22 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 | 211 153 |
| Africa | 3 663 | 8 856 | 19 649 | 28 566 | 35 737 | 40 920 |
| North America[1] | 108 872 | 132 766 | 162 757 | 192 747 | 221 130 | 237 235 |
| Rest of the World | 74 601 | 159 901 | 297 375 | 417 268 | 561 432 | 642 399 |
| Total | 357 432 | 485 294 | 670 207 | 829 676 | 1 019 830 | 1 136 341 |
Source: worldometers.info
[1] North America is Canada and the US
If the current trend continues the total number of deaths will be around 1 192 000 in a weeks’ time. The USA, Brazil, UK, Italy, Spain, France, Mexico and India have today 64.8% of the number of deaths reported in the whole World.
The African continent reached a turning point and all countries reported 1 667 693 cases and 40 920 deaths. There are only 812 800 cases reported in the SADC region and 20 725 deaths. South Africa is dominating SADC with 87.2% of the cases and 90.4% of the number of deaths.
Table 3: Coronavirus cases and deaths in the SADC region – 30 July – 22 October 2020
| SADC country | Cases30 Jul | Cases27 Aug | Cases01 Oct | Cases22 Oct | Deaths30 Jul | Deaths27 Aug | Deaths01 Oct | Deaths22 Oct |
| South Africa | 471 123 | 615 701 | 674 339 | 708 359 | 7 497 | 13 502 | 16 734 | 18 741 |
| Madagascar | 10 317 | 14 554 | 16 454 | 16 810 | 99 | 181 | 232 | 238 |
| Zambia | 5 249 | 11 376 | 15 759 | 16 000 | 146 | 282 | 282 | 346 |
| Namibia | 1 986 | 6 432 | 11 265 | 12 406 | 9 | 59 | 121 | 133 |
| DRC | 8 931 | 9 912 | 10 685 | 11 066 | 210 | 254 | 272 | 303 |
| Mozambique | 1 748 | 3 590 | 8 728 | 11 331 | 11 | 21 | 61 | 79 |
| Zimbabwe | 2 879 | 6 251 | 7 919 | 8 215 | 41 | 179 | 228 | 236 |
| Angola | 812 | 2 332 | 5 725 | 8 338 | 33 | 103 | 183 | 255 |
| Malawi | 3 738 | 5 474 | 5 773 | 5 864 | 103 | 173 | 179 | 183 |
| Eswatini | 2 551 | 4 387 | 5 617 | 5 805 | 40 | 88 | 109 | 116 |
| Botswana | 804 | 1 633 | 3 172 | 5 609 | 2 | 6 | 16 | 21 |
| Lesotho | 576 | 1 051 | 1 595 | 1 918 | 13 | 31 | 36 | 43 |
| Tanzania | 509 | 509 | 509 | 509 | 21 | 21 | 21 | 21 |
| Mauritius | 344 | 348 | 381 | 419 | 10 | 10 | 10 | 10 |
| Seychelles | 114 | 136 | 144 | 151 | – | – | – | – |
| Total | 511 681 | 683 685 | 766 096 | 812 800 | 8 235 | 14 910 | 18 534 | 20 725 |
Source: Worldometers.info
Graph one below illustrate that the peak has been reached and we are in a declining trend which has come to an end in week 32.
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 first time the declining trend reversed and there is a slight increase in the number of cases, especially in Europe.
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 the declining trend continuous with a further decrease 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. |
| Peru | 1 025 | |
| Belgium | 908 | |
| Spain | 735 | |
| Bolivia | 730 | |
| Brazil | 730 | |
| Qatar | 80 | 46 374 |
| Bahrain | 45 902 | |
| Israel | 33 415 | |
| Panama | 29 163 | |
| Kuwait | 27 631 | |
| South Africa | 315 | 11 898 |
| Germany | 119 | 4 666 |
| Namibia | 52 | 4 856 |
Source: Worldometers
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
Source: Worldometers
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 2423, a slight increase of 0.8%. The slight decline in stock markets is also reflected by the monthly decline of -1.32% in the Baltic Dry Index (The Baltic Dry Index provides a benchmark for the price of moving major raw materials by sea). The second wave of Covid-19 cases in Europe makes investors nervous.
Table 5: Selected international commodity prices
| Commodity | Monthly | Yearly |
| Winners for Namibia | ||
| Energy: Brent oil | 0.53% | -36.76% |
| Gold | 2.88% | 25.45% |
| Uranium | -2.49% | 18.11% |
| Copper | 7.25% | 12.60% |
| Zinc | 3.61% | 10.69% |
| Losers | ||
| Lead | -3.40% | -6.11% |
Source: Trading economics. 22 October 2020
The commodity prices relevant to Namibia reached a turning point seventeen weeks ago in the past week prices strengthened again. Oil prices increased in the past week and for the month by 0.53%. The exchange rate strengthened slightly this week and the N$ is currently trading 16.4 to the US Dollar and 19.4 to the Euro.
The mid-term review was presented by the Minister of Finance on 20 October and many uncertainties remain which are not reflected in the projected revenue, expenditure and GDP growth.
Table 6: Actual, estimated and predicted budget in N$ billion
| 2018/19Actual | 2019/20Actual | 2020/21Estimate | 2021/22Projected | 2022/23Projected | 2023/24Projected | |
| GDP | 178,208 | 178,940 | 174,063 | 183,139 | 193,212 | 203,839 |
| GDP growth/year | 1.1% | -1.6% | -7.9% | 2.2% | 3.9% | 4.2% |
| Total revenue | 55,882 | 58,525 | 55,179 | 55,075 | 57,541 | 62,976 |
| Potential Expenditure | 65,108 | 67,343 | 72,772 | 68,480 | 69,849 | 71,246 |
| Pot. Budget balance | (9,226) | (8,819) | (17,593) | (13,404) | (12,308) | (8,270) |
| % of GDP | -5.2% | -4.9% | -10.1% | -7.3% | -6.4% | -4.1% |
| Total debt | 87,533 | 100,400 | 119,756 | 134,140 | 147,430 | 156,682 |
| % of GDP | 49.1% | 56.1% | 68.8% | 73.2% | 76.3% | 76.9% |
| Add. Domestic debt | 8,408 | 12,117 | 11,154 | 12,308 | 8,270 |
Source: Ministry of Finance
The fiscal projections are very conservative and the economic growth projections reflect optimism. This optimism is reflected in the forward of the Medium-Term Expenditure Framework when the Minister said: “The fiscal policy objectives for the next three years, as COVID-19 gradually diminishing, will focus on refuelling the economy and bring it to its pre-COVID-19 growth trajectory. This will pave the way to return to fiscal consolidation path by 2021/22 and restore macroeconomic stability, reduce deficit and ensure debt sustainability. In this regard, Government will continue to strengthen economic partnership with private sector and other stakeholders to optimize on domestic capacity.”
The view by the Minister that growth can only be restored to a pre-2016 level through an economic partnership with the private sector should be supported. However, the 2016-20 economic climate led to divestiture and thus the partnership must have new qualities and totally different investor friendly policies, otherwise the required trust will not be restored.
Compiled by: Rainer Ritter
22 October 2020