HomeOpinionWe can all learn from the Covid-19 pandemic

We can all learn from the Covid-19 pandemic

Zvikomborero Sibanda
In 1918, the world witnessed a deadly pandemic, the Spanish flu, which was estimated to have infected 500 million people worldwide with between 20-50 million deaths.

A century later, the globe is battling another pandemic, Covid-19, a novel coronavirus first discovered in Wuhan, China in December 2019.

Globally, cases of Covid-19 are estimated at 363 million (at the time of writing) with estimated deaths at 5,63 million.

This virus has disrupted the world as we know it as almost all people on earth witnessed forced stay-at-home orders, a characteristic of war-torn countries.

The stringent restrictions which were implemented to curb the spread of the virus severely disrupted global supply chains, halted business activity and worsened citizens’ welfare especially for the developing world which relies on foreign assistance.

Zimbabwe, a country that was already facing macroeconomic instability as evidenced by massive local currency depreciation and skyrocketing prices, is one of the countries that were greatly affected by this pandemic.

With limited fiscal space, the government failed (and continues) to provide adequate support to cushion both businesses and the public.

Around May 2020 the government announced a ZW$18 billion Economic Rescue and Stimulus Package, an amount that was equivalent to 9% of national output (GDP) and constituting about 29% of the 2020 national budget ceiling.

However, the disbursement of the funds under this Covid-19 package has remained a mystery.

Many business executives have disclosed that they did not receive assistance from the government.

The same can be said for the many vulnerable groups as the Minister of Finance has indicated that the government used “sophisticated algorithms” to ascertain the beneficiaries.

Unfortunately, the Auditor-General’s Special Audit Report on Covid-19 resources unearthed grand corruption schemes as funds ended up in the hands of unintended beneficiaries.

A report by Zimbabwe Coalition on Debt and Development (ZIMCODD) has shown that Treasury was prejudiced at least ZW$330 million.

As a result of the pandemic, independent estimates show that the country registered an average of -10% decline in GDP, the largest decline since the hyperinflationary era of 2007/8 except -12% achieved in 2019.

According to the World Bank, nearly half of the population (about 49%) was plunged into extreme poverty.

The record-time discovery of vaccines helped global economies to mount a massive recovery from the 2020 recession, the deepest since the Great Depression.

The US economy, the world’s largest, grew by 5,7% in 2021 — its biggest annual growth since 1984 and ahead of China for the first time in 20 years.

Locally, the government estimated that GDP grew by 7,8% in 2021 on the back of normal to above-normal rains, high global mineral prices, and a rebound in manufacturing among other sectors.

While the pandemic is subduing economic activity due to recurring restrictions, there are some positives that economies can take advantage of.

This writing focuses on innovations like digital technology adoption.

Businesses were forced to become innovative to cut costs as working, buying, and selling of goods and services have gone online.

A renowned economist, Joseph Schumpeter, posited that business innovation is the main reason for increased investments.

According to him, innovation refers to any new policy that an entrepreneur undertakes to reduce the overall cost of production or increase the demand for products.

Before the outbreak of the pandemic, many developing countries including Zimbabwe were technology laggards.

Nevertheless, the pandemic has helped change the status quo as restrictions have called for serious innovations.

This saw businesses buying electronic gadgets for their workers to facilitate tele-working where possible, marketing, consumers shopping, banking as well as schooling going online.

In advanced nations, investment in robots and drones has increased substantially.

A closer analysis of corporate profits globally shows that tech-entities are making astronomical profits since the pandemic began.

The world is gradually moving away from brick-and-mortar setups as digitalisation takes over.

The countries that are investing in technological advancement and or adopting it are considered as countries of the future.

For agrarian economies like Zimbabwe, harnessing new farming technologies like mobile and web technologies will ensure that farmers have real-time advice, monetary tips, and weather information.

Because of technology, soil data analysis, which is key for farmers to monitor crop information to prevent diseases, apply optimum irrigation water or fertiliser, is becoming easy and widespread.

In the new world of changing climatic conditions, farmers can utilise data-driven precision farming technologies for productivity optimisation and waste reduction.

Zimbabwe is struggling with frequent El-Nino-induced droughts which are affecting crop yield leading to food insecurity.

Hence, entrenching technology use initiated by the pandemic will help guarantee food security and reduction in poverty prevalence.

Although technology advancement is killing jobs in some manual sectors, it is also creating space for new roles such as search engine optimisation managers, cloud computing service provision, and data science.

These new roles will lead to cost-effective ways of industrial production.

Zimbabwe is well-known as a nation with a domestic industry using largely outdated technologies, a competitive disadvantage against regional counterparts.

Further, technology is resulting in more financial services.

This positively affects GDP through inclusive financing for all groups in the society — urban or rural, rich or poor.

For instance, when Econet Wireless introduced mobile money (Ecocash), the public’s access to financial services increased.

Technology will also improve the delivery of crucial services like health care.

Public hospitals yearly destroy expired medical drugs partly due to poor (manual) stock management.

Therefore, using technology to report medicine stocks, tracking and monitoring stocks reduces leakages and will improve disaster responses.

Nevertheless, Zimbabwe risks missing out on reaping benefits associated with increased technology penetration and adoption.

These digital technologies use the internet yet the cost of broadband data is rising beyond the reach of many Zimbabweans.

Telecommunications giant, Econet Wireless Zimbabwe, recently reviewed upwards its data tariffs.

The ZW$12 000 one has to spend now to buy 50GB for a month is equivalent to 40% of average salaries earned particularly by the civil service.

The 2022 budget also contains regressive taxes like the US$50 cellular tax and the infamous 2% tax, taxes that will cripple access to smartphones by the poor.

Access to information is key in a functional democracy where citizens are expected to be well informed.

Given the extent to which the pandemic has affected schooling, many students failed to adequately cover the curriculum in the last  two years.

More so, expensive broadband translates into a high cost of doing business thus exerting inflationary pressure.

In today’s world of elevated globalisation, all economic agents should utilise the internet and related technologies to remain competitive.

  • Sibanda  is an Economic Analyst with the Zimbabwe Coalition on Debt and Development (ZIMCODD).He writes in his own capacity; his views do not represent those of the organization he works for. Twitter handle @bravon96 Email: bravosibanda@gmail.com.These weekly New Perspectives articles, published in the Zimbabwe Independent, are coordinated by Lovemore Kadenge, an independent consultant, past president of the Zimbabwe Economics Society and past president of the Chartered Governance & Accountancy Institute in Zimbabwe (CGI Zimbabwe). — kadenge,zes@gmail.com or mobile: +263 772 382 852.

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