HomeEconomyCovid-19 pandemic: Should Zim be worried?

Covid-19 pandemic: Should Zim be worried?

Respect Gwenzi

COVID-19, a novel virus first discovered in China’s Wuhan province, is rapidly spreading across the world and is now present in at least 88 countries. The total number of those infected by the virus is now sitting at 113 000 and those that have succumbed to it are 3 300.

While China has made significant effort to prevent the spread of the disease with new infections slowing down in that country by the day, for the wider world the rate of new infections is increasing. Details of new infections coming from South Korea, Iran and Italy are worrying. The number of total deaths in the United States is now seen nearing the 20 mark in under two weeks, while infections are doubling by the day. The World Health Organisation (WHO) now recognises the virus as a global epidemic as its intensity is now beyond that of any virus ever witnessed.

There is a great sense of urgency across the globe, particularly in the developed world as governments and central banks take proactive measures to minimise the adverse impact of the virus to both their social and economic set-ups. The International Monetary Fund has since revised the 2020 global economic growth forecast to levels below the prior year, which implies a slowdown even as risks of a recession abound.

The multilateral lender has announced a US$50 billion war chest to help countries fight the negative economic effects of coronavirus. In the same vein, the World Bank has set aside US$12 billion for a similar cause. With production significantly hit, China has announced a US$143 billion package to cushion companies and workers affected by the virus.

China earlier extended its Lunar holidays late into February as the virus raged, a move which lowered production by a huge margin. China’s gross domestic product is now seen slowing down to the lowest level on a quarterly basis since the death of Chairman Mao in 1978. Against the rising tide of a global economic shock, it is paramount to look at the preparedness of Zimbabwe on both the social and economic aspects. Zimbabwe’s government says it is adequately capacitated to contain an envisaged outbreak within its borders.

At weekly cabinet briefings, updates on new developments regarding the virus have been given. Key observations on the ground are that Zimbabwe remains very vulnerable to the virus. Only until recently, government allowed free entry without adequate checks. Even as the outbreak spreads, the measures have been temporarily tightened.

The rules required travellers to self-quarantine for a fortnight upon arrival in Zimbabwe. This is not the most effective way of dealing with the crisis as the subject is not monitored within the fortnight of self-quarantine. Other countries are creating quarantine zones, where subjects are constantly checked until a fortnight lapses and then released. Outside of these measures, the tests upon entry do not constitute effective screening but are mere temperature checks, which can be dodged especially at border posts. The Chinese community in Zimbabwe has grown significantly over the last decade in line with the growth in their investments in the country. Around the Lunar holidays it would be expected that the movement to China was high, while movement from China also increased after the holidays.

The biggest challenge is that Zimbabwe considers China an all-weather friend and therefore sometimes tilts the rules just to appease a friend. Zimbabwe is also very desperate to secure a bailout and China is one of the countries it hopes may one day come to its rescue.

Given weak health systems in Africa, preventative measures that mitigate the risk are more effective and this is exactly what other countries are pursuing. For Zimbabwe, service delivery, particularly health, is presently at its lowest point in 40 years.

The economic effects of coronavirus should equally not be downplayed. China is Zimbabwe’s second largest donor and presently funding key developments such as Robert Mugabe International Airport extension, Hwange Thermal Power Station extension and the new parliament in Mt Hampden.

Gwenzi is a financial analyst and managing director of Equity Axis, a financial media firm offering business intelligence, economic and equity research. — respect@equityaxis.net

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