The World Health Organisation has specifically praised South Africa for its ‘incredible’ response to Covid-19. Meanwhile, the global community is in shock over how badly the US is handling the outbreak, with a Paris-based political scientist saying, “America has not done badly, it has done exceptionally badly” and others saying that the response from the world’s richest and most powerful nation has been a lesson in what not to do.
Covid-19 Economic Impact
The collapse in oil prices from the coronavirus pandemic is spelling economic calamity for oil-dependent nations like Iraq and Venezuela. Follow this link for an analysis of how the coronavirus has impacted countries around the world.
- Texas oil prices crashed through rock bottom into negative territory this week. Demand for oil is so low that the world is running out of places to store unused barrels of oil, and the world’s biggest independent oil storage company has almost reached capacity. On top of the impact from Covid-19, is that Russia and Saudi Arabia had flooded the world with excess supply in a price war immediately prior to the coronavirus pandemic.
- The coronavirus is shaking global assumptions about US exceptionalism. The crisis has exposed two weaknesses of the US: the erratic leadership of President Trump, who has devalued scientific expertise, and deep structural problems like a dysfunctional health care system and a lack of a social safety net.
- According to the New York Times, the economy – President Trump’s main case for re-election – has imploded. News coverage of his handling of the coronavirus has been overwhelmingly negative as Democrats have condemned him for a lack of empathy, honesty, and competence, in the face of the pandemic. Even the Republicans have criticized the President’s briefings as long-winded and his rough handling of critics as unproductive.
- More than four million Americans filed for unemployment benefits last week. This brings the five-week total during the pandemic, to 26.5 million.
- Prime Minister Johnson may be returning to work on Monday following his recovery from Covid-19. This is according to the Telegraph newspaper, which also said Johnson’s office had insisted no final decision had been made.
- On Monday, the power struggle between Israel’s most powerful leaders came to an end. Netanyahu and Gantz came to a formal coalition after a year’s stalemate. Netanyahu will remain Prime Minister for another 18 months, whereafter he shall be replaced by Gantz.
- After a strong spike last week, Gilead stocks have tumbled after their drug, remdesivir, was supposedly found to be a failure by a Chinese trial in curing Covid-19.
- President Cyril Ramaphosa announced a massive social relief and economic support package of R500 billion towards fighting the pandemic in South Africa. The stimulus package amounts to around 10% of GDP and compares favourably with developed markets, in terms of percentage, but is bigger than most of our emerging market peers. The money will be made up of R130 billion from within the current budget, with the balance comprised of contributions from the World Bank, International Monetary Fund, BRICS New Development Bank, and the African Development Bank, as well as from the Unemployment Insurance Fund.
- President Ramaphosa gave his fourth national address last night on Covid-19 where he introduced a load-shedding comparative ‘risk-adjusted strategy’ that will scale back the Coronavirus lockdown.
- South Africa’s formal economy is going to receive a R200 billion boost from a loan guaranteed fund announced by the President. This scheme will be used to buoy the banks of South Africa which should, in turn, be felt by South African citizens in that banks will be able to provide finance which would not have necessarily met lending criteria under normal circumstances.
- Follow this link for an interview where Judge Dennis Davis asks Nazmeera Moola, head of SA investments at Ninety One, about President Ramaphosa’s Covid-19 stimulus plan, South Africa’s economy, and the IMF’s possible intervention.
- In the first month of its existence, the Solidarity Fund has received R2.6 billion to assist in the response to the Covid-19 pandemic in South Africa. Although this is an impressive sum, the interim CEO of the fund, Nomkhita Nqweni, has said that it is just a “drop in the ocean” compared to what is needed.