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Socio-Economic Effect of COVID-19 on the Global Economy-Part One

April 3, 2020

Earlier news on the outbreak of the Coronavirus, commonly called COVID-19, in the Wuhan Province in the People’s Republic of China was received with scepticism by leaders and citizens of several advanced, emerging and developing economies across the globe.

Most global leaders doubted the exponential effect of COVID-19 on their respective countries and the Global Economy.

Today, the world continues to record significant number of confirmed cases, deaths, recoveries, and active cases, among other significant variables while struggling to find exact medical solution or prescription for the pandemic.

The stir caused and socio-economic effects of the epidemic on global economies are monumental.

A pandemic which started in China has penetrated a significant number of countries and territories across the globe.  

Global Outbreak of COVID-19 and Measures

Some economists argue the world is saddled with a coronavirus recession.

That is, an economic recession that is likely to occur throughout the global economy in 2020 due to the Coronavirus outbreak.

However, available statistics on the pandemic lend credence to the foregoing statement. As at Sunday, 29th March, 2020 (about 12:30pm GMT), Worldometers (2020) revealed the Coronavirus pandemic has been recorded in 199 countries and territories; and in two international conveyances across the globe.

These international conveyances include the Princess Diamond Cruise ship harboured in Yokohama, Japan; and the Holland America’s MS Zaandam Cruise ship.

In all, there were about 678,910 confirmed cases, 31,771 deaths, and 146,339 recoveries globally during the period. On 27th March, 2020, Japan recorded 113 new cases.

It was the highest number of cases recorded in a day in Japan.

However, the number (113) recorded in Japan did not compare with the thousands of confirmed cases recorded in the United States during the period.

The United States is now the epicentre of the pandemic. That is, the country has the most COVID-19 cases in the world with respective total confirmed cases, deaths, recovered, and active cases of 123,781; 2,229; 3,238; and 118,314.

The United States’ dominance confirms earlier prediction by the World Health Organisation (WHO) that the economy is likely to be the epicentre of COVID-19, given the sporadic rate of infection in the country.

In the United States, the rate of deaths (2,229) relative to the total number of confirmed cases (123,781) was about 1.80% ((2,229 deaths ÷ 123,781 confirmed cases) x 100% = 0.0180076 x 100% = 1.80076 = 1.80%) during the period.

The States of New York (59,648), New Jersey (13,386), and California (6,204) had the respective highest confirmed cases in the United States.

The recovery rate (about 2.62%) coupled with the death rate (about 1.80%) suggests the United States has more active and critical cases on the pandemic than the former.

Severity of the pandemic has compelled the President Donald Trump-led administration to postpone the possibility of re-opening the United States economy from mid to the end of April 2020.

Health analysts have predicted deaths from the Coronavirus in the United States would be more than two hundred thousand.

To minimise the effects of COVID-19 on businesses and households, the United States Congress approved a US$2 trillion stimulus package on 27th March, 2020; and President Donald Trump signed it into law on 28th March, 2020.

Also worrying is the increasing number of confirmed cases and deaths in Italy and Spain. During the same period, the respective total confirmed cases, deaths, recovered, and active cases in Italy were 92,472; 10,023; 12,384; and 70,065.

Further, fifty-one (51) doctors who tested positive to the pandemic in Italy were reported dead. On 28th March, 2020, Italy recorded the highest daily jump in deaths since the outbreak of the epidemic.

China remained fairly stable during the period with the following respective statistics: 81,439 confirmed cases; 3,300 deaths; 75,448 recovered; and 2,691 active cases.

The number of active COVID-19 cases in China (2,691) was less than the active cases in each of the over twenty (20) leading countries with confirmed cases in excess of 3,000.

For instance, Sweden had total confirmed cases of 3,447 and active cases of 3,326 during the period.

The total number of active cases in Sweden (3,326) outweighed the total number in China (2,691) although the latter had comparatively higher confirmed cases (81,439) than the former (3,447).

The rate of deaths relative to the total number of confirmed cases in China during the period was 4.05% (3,300 deaths ÷ 81,439 confirmed cases) x 100% = 0.0405211 x 100% = 4.0521 = 4.05%).

This rate was lower than the death rates recorded in Italy (10.84%), Spain (8.29%), Iran (6.89%), France (6.12%), and the United Kingdom (UK) (5.96%) during the period.

Although the United States witnessed sudden increase in COVID-19 cases (123,781), the rate of death relative to total number of confirmed cases during the period was 1.80%.

This was comparatively lower than the rates recorded in the foregoing countries. On 25th March, 2020, New Zealand announced a four-week shutdown to contain the virus; and to prevent further outbreak. 

The Diamond Princess Cruise ship had respective total confirmed cases, deaths, recovered, and active cases of 712; 10; 597; and 105. MS Zaandam Cruise ship had 2 confirmed and 2 active cases respectively.

It is worth emphasising, although the epidemic has spread rapidly and causing socio-economic destruction to other large and small countries and territories across the globe, the effect of COVID-19 on large cities such as Beijing and Shanghai in China has been very minimal.

COVID-19 Outbreak in Africa and Measures

Available data from the Africa Centre for Disease Control (2020), Shaban (2020) and Worldometers (2020) indicated as at 29th March, 2020, the African continent has over 4,379 confirmed cases, 135 deaths, and 302 recoveries.

The total number of infected countries is 46 while non-infected is 8 (54 – 46 = 8).

Analysis of the pandemic outbreak in Africa is presented on regional basis in this section. The five economies in North Africa are all infected, with Egypt and Libya recording the highest (576) and least (3) number of infections respectively.

Algeria has the second highest number of infections (454) followed by Morocco (437) and Tunisia (278) respectively. On 25th March, 2020, Egypt imposed a fifteen-day curfew from 7pm to 6am; and ordered the closure of schools and other public places.

However, the curfew does not affect bakeries and pharmacies. The curfew is intended to save lives of Egyptians; and to prevent further spread of the pandemic.

Statistically, Egypt has the second highest number of COVID-19 confirmed cases in Africa. On average, Egypt records about 30 confirmed cases daily.

The Egyptian government has noted strict measures would be implemented if the situation worsens or deteriorates over the period.

Sao Tome and Principe remains the only Central African economy without COVID-19 cases.

Cameroon remains the country with the eleventh highest number of confirmed cases in Africa (99); and the highest in the Region, followed by the Democratic Republic of Congo (65); Congo Brazzaville (19); Equatorial Guinea (13); Gabon (7); Central African Republic (6); and Chad (5). Botswana, Lesotho, Comoros Island, and Malawi are the only Southern African countries without the Coronavirus outbreak.

South Africa has the highest number of confirmed cases (1,187) in the Region. The other seven infected economies in the Region have relatively small number of confirmed cases. They include Madagascar (39); Zambia (28); Namibia (11); Eswatini (9); Mozambique (8); Zimbabwe (7); and Angola (5).

South Africa is the epicentre of the Coronavirus in Africa; it is the country with the highest number of confirmed cases on the African continent.

South Africa announced a twenty-one (21)-day economic lockdown effective 28th March, 2020.

Moody’s has downgraded South Africa’s credit ratings to “Junk” status. Some economic experts affirm the credit rating is timely since it coincided with prevailing challenges in the South African economy.

During the same period, all countries in the Horn of Africa or East Africa, with the exceptions of South Sudan and Burundi, had confirmed cases of the Coronavirus.

Mauritius has the highest number of infections (102) with Somalia recording the least number (3) in the Region.

The other breakdowns are as follows: Rwanda (60); Kenya (38); Uganda (30); Ethiopia (19); Djibouti (15); Tanzania (14); Seychelles (8); Eritrea (6); and Sudan (5). Uganda ranks 17th on the list of countries with the highest number of COVID-19 confirmed cases in Africa. On 26th March, 2020, the Ugandan government announced certain measures to ensure containment. These include a fourteen (14)-day suspension of all public transports; and ban on sale of all non-food items in the country during the period.

The only surviving economy in the West African Sub-region in the wake of the Coronavirus pandemic is Sierra Leone; all the other fifteen (15)-member countries, including Ghana, have been infected.

Burkina Faso has the highest rate of infection (207), followed by Senegal (142); Ghana (141); Cote D’Ivoire (140); Nigeria (97); Togo (28); Mali (18); Niger (18); Guinea (8); Cape Verde (6); Benin (6); The Gambia (3); Mauritania (3); Liberia (3); and Guinea-Bissau (2).

Respectively, Senegal and La Cote D’Ivoire rank 7th and 9th in Africa in terms of confirmed Coronavirus cases.

On 23rd March, 2020, the two Presidents declared a state of emergency in their respective countries; and instituted measures to impose heavy fines on individuals and groups who would violate laid down procedures intended to curb further spread of the Coronavirus.

Nigeria ranks 12th in the total number of confirmed COVID-19 cases in Africa. Mr. Atiku Abubakar, a former Vice President of Nigeria has donated an equivalent of US$140,000 as his contribution to the fight against the Coronavirus pandemic in Nigeria.

It is believed similar donations would alleviate the plight of average Nigerians, following the devastating effect of the epidemic on the economy.  

Basic Statistics on Africa

Available data indicate the total number of confirmed cases in Africa (4,379) represents about 0.65% ((4,379 ÷ 678,910) x 100% = 0.00645 x 100% = 0.645 = 0.65%) of total confirmed cases on the pandemic across the globe (678,910).

Total deaths (135 deaths) recorded in 46 countries on the African continent represent about 0.43% ((135 ÷ 31,771) x 100% = 0.004249 x 100% = 0.4249 = 0.43%) of deaths recorded globally.

The total number of cases recovered (302) in 46 African countries translate into 0.21% of total cases recovered globally (146,339).

The intra recovery rate relative to the total number of confirmed cases (4,379) in 46 countries during the period is about 6.90% ((302 recovered cases ÷ 4,379 confirmed cases) x 100% = 0.068966 x 100% = 6.8966 = 6.90%).

This suggests the prevalence of high rate of active and critical cases (about 93.10%) (100% – 6.90% = 93.10%) on the African continent.

As noted earlier, South Africa has the highest number of confirmed COVID-19 cases (1,187). However, she has one of the least COVID-19 reported deaths (1) on the continent.

The total number of deaths-to-confirmed cases rate in South Africa (0.08%) ((1 death ÷ 1,187 confirmed cases) x 100% = 0.0008425 x 100% = 0.0843 = 0.08%) compares favourably against the rates recorded in Algeria (6.39%); Egypt (6.25%); Morocco (5.95%); Ghana (3.55%); and Tunisia (2.88%) during the period.

So far, Africa has on average about 95.20 confirmed cases (4,379 confirmed cases ÷ 46 infected countries = 95.1957 = 95.20 confirmed cases); 2.94 deaths (135 total deaths ÷ 46 infected countries = 2.93478 = 2.94 deaths); and 6.57 recovered cases (302 total recovered cases ÷ 46 infected countries = 6.5652 = 6.57 recovered cases).

Thus far, Sao Tome and Principe (Central Africa); Botswana, Lesotho, Comoros Island, and Malawi (Southern Africa); South Sudan and Burundi (East Africa); and Sierra Leone (West Africa) remain the only eight African countries that have not recorded cases related to the Coronavirus pandemic.

ANOTHER INSIGHTFUL ARTICLE READ FROM AUTHOR

To be continued…..

Dr. Ebenezer Ashley, economist, global economy, ghanatalksbuiness
DR. Ebenezer Ashley

By Ebenezer M. Ashley (PhD)

Fellow Chartered Economist &

CEO of EBEN Consultancy

ghanatalksbusiness.com

The post Socio-Economic Effect of COVID-19 on the Global Economy-Part One appeared first on Ghana Talks Business.

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Source : African Media Agency (AMA)

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