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 currently 30 753 cases and 293 deaths. South Africa have currently 1 337 926 cases. The latest cases and deaths are the following:
Table 1: Coronavirus cases – 03 January to 18 January 2021
|Region/Country||Cases03 Jan||Cases18 Jan|
|China||87 117||88 336|
|Europe||19 867 286||22 531 724|
|Africa||2 777 596||3 237 290|
|North America||21 505 518||25 205 353|
|Rest of the World||40 864 891||44 612 373|
|Total||85 102 408||95 675 076|
Since the beginning of December most new cases were in Northern America and Europe. The Rest of the World was still 52.4% in the beginning of December and the share has declined to 46.6%. There is a second wave in Europe currently with subsequent restrictions announced. The US remains on top of the list with reported 24.5 million cases and 408 620 deaths. Only 3.4% of the reported cases and 3.9% of the deaths are on the African continent. China reported the past week one new death, the first reported new deaths since May. There is a question mark behind the reliability of the reported data.
Table 2: Coronavirus deaths – 03 January to 18 January 2021
|Region/Country||Deaths03 Jan||Deaths18 Jan|
|China||4 634||4 635|
|Europe||472 906||537 782|
|Africa||66 481||78 749|
|North America||374 458||425 404|
|Rest of the World||927 281||997 023|
|Total||1 845 760||2 043 593|
 North America is Canada and the US
The African continent reported 3 237 290 cases and 78 749 deaths. There are only 1 570 682 cases reported in the SADC region and 41 149 deaths. South Africa is dominating SADC with 85.2% of the cases and 90.2% of the number of deaths. South Africa also dominates the African continent with 41.3% of the cases and 47.1% of the deaths. Many African countries are underreporting and some countries are not reporting any new cases and deaths, like Tanzania since May.
Table 3: Coronavirus cases and deaths in the SADC region – 03 January- 18 Jan 2021
|SADC country||Cases03 Jan||Cases18 Jan||Deaths03 Jan||Deaths18 Jan|
|South Africa||1 088 889||1 337 926||29 175||37 105|
|Zambia||21 582||38 207||394||559|
|Namibia||25 116||30 753||215||293|
|Mozambique||18 968||27 446||168||249|
|Zimbabwe||14 491||27 203||377||713|
|DRC||17 998||21 060||595||634|
|Angola||17 608||18 875||407||436|
|Madagascar||17 767||18 301||262||273|
|Botswana||14 805||17 365||42||71|
|Eswatini||9 711||12 944||227||376|
|Malawi||6 712||12 470||192||314|
|Lesotho||3 206||6 371||65||93|
|Total||1 258 187||1 570 682||32 150||41 149|
Belgium is on top of the list with the number of deaths per population and Andorra has the most cases.
Table 4: Worst affected countries according to deaths and cases
|Country||Deaths/1M pop.||Total cases/1M pop.|
|Andorra||1 177||117 453|
|South Africa||621||22 405|
Source: Compiled from Worldometers data
Although Belgium as a country has the most deaths per one million of the population, there are some individual American states that have a much worse death rate.
Table 5: High death rate states in the USA compared with other countries
|State or country||Deaths/1 Million per pop.|
The trend in the Namibian reported number of cases of Covid-19 experienced a third wave in the beginning of December and it seems that a turning point was reached at the end of December. This is visible from the 3 day moving average with a slightly declining trend.
Graph 1: The Namibian Covid-19 cases
With an estimated world population of 7.8 billion in 2020, the total number of 95.7 million cases is 1.2% of the world population and the number of deaths is 0.026%.
The World economy has no momentum and the monthly decrease of 0.8% in the Baltic Dry Index (The Baltic Dry Index provides a benchmark for the price of moving major raw materials by sea) is one indicator.
Table 6: % change in USD- selected international commodity prices
|Winners for Namibia|
|Losers for Namibia|
|Energy: Brent oil||8.05%||6.20%|
Source: Trading economics. 18 January 2021
The commodity prices relevant to Namibia reached a turning point in June and they have reached a plateau at the end of December. Oil prices increased in the past months by 8.05%. The exchange rate has weakened in the past months and the N$ is currently trading 15.26 to the US Dollar and 18.43 to the Euro.
The domestic economy
Namibia received extraordinary rains in the past three weeks and most dams are full. Rain in Namibia lifts the spirits and people become positive about the prospects of 2021. This momentum must be kept going and therefore it will be opportune to improve the investment climate for domestic and foreign investors.
Preliminary national accounts for 2019 indicate that fixed investment remains in a declining trend since 2014.
Graph 2: Real Investment at constant prices
Source: Bank of Namibia
The preliminary national accounts for 2020 will be only published in May this year and if one wants to restart the economy and create much needed jobs again, the business climate is very important.
Graph 3: Gross fixed capital formation by ownership
Source: Bank of Namibia
The drop in private sector investment since 2015 is a concern and much needed new jobs can only be created if tourism returns to normal and the investor climate improved. The privatization of some SOE’s could provide the impetus for investor sentiment. What about an investor conference later this year?
Compiled by: Rainer Ritter
18 January 2021