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 34 270 cases and 355 deaths. South Africa have currently 1 456 309 cases. The latest cases and deaths are the following:
Table 1: Coronavirus cases – 03 January to 02 February 2021
|Region/Country||Cases03 Jan||Cases18 Jan||Cases2 Feb|
|China||87 117||88 336||89 594|
|Europe||19 867 286||22 531 724||25 123 464|
|Africa||2 777 596||3 237 290||3 571 207|
|North America||21 505 518||25 205 353||27 709 333|
|Rest of the World||40 864 891||44 612 373||47 626 517|
|Total||85 102 408||95 675 076||104 120 115|
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 45.7%. There is a second wave in Europe currently with subsequent restrictions announced. The US remains on top of the list with reported 26.9 million cases and 454 712 deaths. Only 3.4% of the reported cases and 4.0% of the deaths are on the African continent. China reported the past week one new death, the second reported new death since May. There is a question mark behind the reliability of the reported data.
Table 2: Coronavirus deaths – 03 January to 02 February 2021
|Region/Country||Deaths03 Jan||Deaths18 Jan||Deaths02 Feb|
|China||4 634||4 635||4 636|
|Europe||472 906||537 782||612 444|
|Africa||66 481||78 749||91 909|
|North America||374 458||425 404||474 898|
|Rest of the World||927 281||997 023||1 070 080|
|Total||1 845 760||2 043 593||2 253 967|
 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 82.9% of the cases and 88.4% of the number of deaths. South Africa also dominates the African continent with 40.8% of the cases and 48.3% of the deaths. Many African countries are underreporting and some countries are not reporting any new cases and deaths, like Tanzania since May last year.
Table 3: Coronavirus cases and deaths in the SADC region – 03 January- 02 February 2021
|SADC country||Cases03 Jan||Cases18 Jan||Cases02 Feb||Deaths03 Jan||Deaths18 Jan||Deaths02 Feb|
|South Africa||1 088 889||1 337 926||1 456 309||29 175||37 105||44 399|
|Zambia||21 582||38 207||56 233||394||559||794|
|Mozambique||18 968||27 446||39 460||168||249||386|
|Namibia||25 116||30 753||34 270||215||293||355|
|Zimbabwe||14 491||27 203||33 548||377||713||1 234|
|Malawi||6 712||12 470||24 903||192||314||726|
|DRC||17 998||21 060||23 043||595||634||675|
|Botswana||14 805||17 365||22 738||42||71||148|
|Angola||17 608||18 875||19 829||407||436||466|
|Madagascar||17 767||18 301||19 065||262||273||281|
|Eswatini||9 711||12 944||15 804||227||376||574|
|Lesotho||3 206||6 371||8 900||65||93||172|
|Total||1 258 187||1 570 682||1 756 437||32 150||41 149||50 246|
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||1 319||129 522|
|South Africa||743||24 374|
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 a turning point was reached at the end of December. This is visible from the 3 day moving average (graph below) with a strong declining trend.
Graph 1: The Namibian Covid-19 cases
With an estimated world population of 7.8 billion in 2020, the total number of 104.12 million cases is 1.3% of the world population and the number of deaths is 0.029%.
The World economy has no momentum and the monthly decrease of 4.4% 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||12.49%||10.95%|
Source: Trading economics. 02 February 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 12.49%. The exchange rate has strengthened in the past two weeks and the N$ is currently trading 15.02 to the US Dollar and 18.15 to the Euro.
Global risks – Looking strategically beyond COVID-19
Most decision makers in Namibia are currently focused on the COVID-19 pandemic and how to mitigate the economic fallout. Given Namibia’s weak fiscal situation before the pandemic hit the country, the already weak economic structure will be tested this year and hard decisions must be taken. Many SOE’s still live in a dream world of Government as the ultimate provider of funds, salary cuts are not discussed, but rather the spectrum to tap new sources of funds – the easier option. Is COVID-19 the biggest global risk? The World Economic Forum publishes each year a Global Risk Report. This year the top ten risks are:
Table 7: Top 10 Risks ranked
|Rank||Top Risks by likelihood|
|2||Climate action failure|
|3||Human environmental damage|
|6||Digital power concentration|
|8||Interstate relations fracture|
Environmental risks (shaded green) are four of the top 5 risks by likelihood and infectious diseases are only ranked four, yet it draws our full intention, although it is a passing phenomenon. The top ten risks by impact provide a different picture, because the globe experiences currently the economic and social fallout of the pandemic.
Table 8: The top ten risks by impact
|Rank||Top Risks by impact|
|2||Climate action failure|
|3||Weapons of mass destruction|
|5||Natural resource crises|
|6||Human environmental damage|
|10||IT infrastructure breakdown|
Environmental risks by impact are again five in the top ten list. What could be the list of short term (0-2 years) risks for Namibia?
Table 9: Possible short term risks Namibia is facing
|Rank||Threats facing Namibia|
|1||Prolonged stagnation due to wrong policies|
|4||Erosion of social cohesion|
|5||Asset bubbles crises|
|6||Disillusionment of the youth|
It would be very important for Cabinet to have a retreat in the beginning of the year to discuss frankly possible scenario’s and embark on the right path – not the easiest one.
Compiled by: Rainer Ritter
2 February 2021