Covid-19 has impact on economies. Is it really it?
By Petrus Haikela Hanghuwo
It is universally understood that economies always experience demises in terms of Gross Domestic Product (GDP) due to pandemics.
In this case, the current Covid-19 pandemic is likely to cause the downfall of many economies. Or is it really so? Will Covid-19 kill economies, or the economies were found already dying?
Specifically, shrinkage in the GDP of most Southern African countries has been recorded over the past years and significantly in the past two years.
So, the question arises, “Was this decline attributed to any pandemic?”
According to the World Economic Situation and Prospect (2020), the economic position in Africa at large remains demanding amid the decrease of the global economic growth.
While, economically, progress has been discerned and traced in the Northern and Eastern regions of Africa, with the most progress having been recorded in the Eastern Regions of Africa, the other regions remain troublesome with more need to improve economically.
The World Economic Situation and Prospect (2020) has clearly quantitatively indicated that the Southern part of Africa had recorded an increase in the real GDP of just 1-2% in the economic year of 2019 and 2020, whereas the highest recorded real GDP in Africa was 6%, which had to come from the Eastern part of the continent.
To look into this thoroughly, conclusion is, therefore, drawn. The Southern African countries are not as productive as other countries. Is it really because of the novel Corona Virus that these countries are in real recession?
A good example of productive years in Africa can be the years between 2000 and 2009 when real GDP per capita was at its utmost peak, but before these years, the years between 1972 and the years up to 1979 were greatest then.
So, nations are overcrowded with unconditional penchants to get back to those past years, and enjoy the great moments of economic productivity.
However, one sagacious mind-set would simply improve an unproductive year by analysing and making critical studies on how economies were run in those years of 2000-2009 not only in Southern Region of Africa, but the Eastern and Northern Regions were good too back then though they still are.
So, the same evolvement can be prepared to these demanding years, and have the economies enriched to the satisfaction of economic goals of each state in its distinction.
Even though there was security implementation in a few countries in the Central Africa regarding economic unrest such as the collapse of oil prices in the years 2014/15, it can be concluded that the situation is still worrisome.
I am thus at odds with the point of view that Covid-19 has come to degenerate things. Not really, because I personally understand that the minds of many individuals have failed big time to rather recognize the real economic positive spinoffs which could come out of Covid-19.
Individuals, especially the entrepreneurs, according to own observation, are failing to satisfy the entrepreneurial crucial feature, which articulates that “an entrepreneur must be an opportunity seeker in every situation.”
Simply because in this Covid-19 era, the mind of every entrepreneur should rather dwell on the positive side of the situation and analyse it critically to realize the opportunities in it, instead of laying the abilities of excelling by the river side.
The minds of individuals, more especially the producers, should have thought in a more critical economic manner at the beginning of the pandemic regarding production as well as keeping the markets as productive as before.
It’s understandable that there is really a tremendous shift in the economic world; nonetheless, we as economists should, therefore, not assign the failures of markets to the outbreak of Covid-19.
This is because the ready entrepreneurial mind-set is supposed to accept change of every market and not to resist it.
So, if producers are not adjusting productively, more especially in the Southern Region, it’s not promising that the dice will cast for Covid-19, the soonest despite the vaccine rollouts. A further question may arise, “Until when are producers failing and still be blaming the pandemic?”
There is plethora of means to respond to the market failure, and which can actually be applied by the producers in the Southern Region, and move the economy of the Region to the world standard even while the Covid-19 pandemic persists.
In the same vein, the deterioration of the economic situation in the Southern region can therefore be simply improved if investment in both private and public entities is advanced.
Not only can the investment prompt economies’ recovery, but also an increase in supply of energy with low charges such as electricity, as this can help each individual who lives below the poverty line to afford its lowest bills, for example.
In conclusion, the human resource departments are the integral departments in every organization, either profit or non-profit organization. This is crucial to states like Namibia who expect to experience continuous recession since diamond output is expected to fall and Angola who expect to experience continuous recession since oil output is expected to fall too.
– Mr Petrus Haikela Hanghuwo is a University of Namibia (UNAM) graduate of education specialised in economics and business studies (2020). Email: firstname.lastname@example.org