As coronavirus COVID-19 continues to be a world scare, with more than 100,000 confirmed cases of the virus around the world and the death toll is over 3,000, the majority of which are from China.
The impact of this global pandemic has proven to go beyond health-related concerns as this virus has created devastating effects on various aspects of human and economic endeavors.
Some of the affected activities are listed below.
- Oil prices
Since the outbreak of coronavirus in January, its spread has sent global stock markets tumbling and reversed nearly all the positive momentum in oil prices over the past three months. As the virus spreads beyond Asia, the oil market will continue to suffer losses,
Coronavirus affects the oil market in two ways.
- Travel restrictions due to containment as well as the decline in industrial activities due to companies sending workers home has dwindled the use of oil and oil-based produced, thereby driving the demand and invariably the price of oil downwards.
- The stock market reaction to the effect of the coronavirus on the global economy is devastating. The market’s interest in the health of the global economy has declined, prompting flight away from oil and energy stocks and further drawing down prices.
The airline industry stand to lose $113 billion in sales if the coronavirus continues to spread, according to the International Air Transport Association
- Movie industry
As the coronavirus spreads through various countries, the movie industry is already feeling the effects.
Major setbacks already experienced:
- The China premiere of the next James Bond movie, “No Time to Die,” was canceled
- Production on the seventh “Mission: Impossible” installment was postponed because of coronavirus concerns.
- Disney’s $200 million “Mulan” remake which was due to be released in China on March 27th, has been prospected not to be released
Companies like Apple, Samsung, Microsoft, Tesla, Google has closed offices, stores, and factories in China, Hong Kong and Taiwan as well as restricting employees from nonessential travels to the country.
Conventional retailers and restaurants are dealing with the harsh realities of cities across China being placed under lockdown, as local governments enforce quarantine measures and restrict trips outdoors. Market-leading retailers like Starbucks, Uniqlo, Nike, and Apple have temporarily closed their stores, while small and medium-sized retailers are being hit particularly hard as movement of people declines.
This, coupled with China’s status as the epicenter of major supply chains, its impact will be felt all over the world.
As the world scrambles to get to grips with the coronavirus outbreak, global sporting events are taking a hit.
Several decisions have been taken in the world of sport in direct relations to the spread of the coronavirus, some of them are:
- There are fearsTokyo 2020 may be impacted but organizers insist preparations are going ahead as planned.
- Swiss Super Leaguepostpones weekend fixtures after government bans large public events.
- The start of the Chinese Super Leaguehas been postponed.
- China’s women’s national football team washeld in quarantine after Olympic qualifying matches were moved from China to Australia.
- South Korea’s professional soccer league has postponed the start of its new season.
- Four Serie A matchespostponed in March due to a spike in cases in northern Italy.
- Inter Milan’s Europa League game against Ludogorets was played behind closed doors.
- Five Serie A matcheswill be played behind closed doors.
- Japan’s J.Leaguepostponed seven Levian Cup matches in February and all domestic games through early March.
- The 2020 World Athletics Indoor Championshipsin Nanjing has been postponed until next year.
- The Tokyo Marathonwas run in front of empty streets and restricted to elite athletes only.
- Multiple Asia Cup qualifying matches have been postponed, including the Philippines vs. Thailand and Japan vs. China
- The European Tourcanceled April’s Maybank Championship in Malaysia and the following week’s China Open.
- The LPGA canceled the elite Blue Bay tournament due to be held in Hainan
- It also canceledthe 2020 Honda LPGA Thailand and the 2020 HSBC Women’s World Championship in Singapore.
- The remaining stages of the UAE cycling tour have been canceled after two team members tested positive.
Economic consequences of Coronavirus in Africa
The Coronavirus epidemic has become a global concern. Its impact is felt all over the world as its economic effect is spreading even in Africa.
The Johannesburg Stock Exchange recorded its steepest decline in eight months as the market plunged by as much as 2.6%.
Investors are clearly worried about the exposure that many African tech startups have to China, the source of the deadly viral outbreak that threatens to slow economic growth in the world’s second-largest economy.
With the death toll rising in China and thousands more infected, there are mounting concerns that Chinese officials will be unable to stop the spread of the increasingly virulent coronavirus in the short term.
While the potential impact on human health will be significant, possibly devastating, a contagion is currently having severe economic consequences around the world. Africa is especially vulnerable given how most economies on the continent are dependent on exporting commodities.
Probable Economic Implications for Africa from the Escalating Coronavirus Outbreak in China
CHINA TURNS INWARD: with the rise in death toll and affected people, China will become increasingly consumed by this crisis. Foreign economic policy will decline in the priority list as China’s owned enterprises either turn their attention to the domestic crisis or just hunker down until the crisis passes.
GLOBAL INVESTOR FREAK OUT: Monday’s sell-off in South Africa provides a hint of what may be in store for the continent as global investors look at Africa’s reliance on the Chinese market as a significant liability. This could put significant pressure on many African currencies, particularly in Nigeria, Kenya, and South Africa.
CHINA’S STOPS BUYING WHAT AFRICA HAS TO SELL: China’s economy was already slowing before the coronavirus outbreak but now with tens of millions of consumers down in their homes, and worried about potentially high healthcare costs, China’s consumer spending is widely expected to slow even more. This could have an immediate impact on demand for African agricultural exports like Nigerian beef, Rwandan coffee, Kenyan tea and South African wine and citrus as well as African tech startups.
CHINESE TRAVELLERS WILL BE TOO AFRAID TO FLY: Flying during a viral outbreak like this is frightening. Chinese travelers (leisure and business) will be among the first to cease all their trips except for the most essential, prompting what will likely be a significant downturn in passenger traffic between China and Africa. A number of African airlines have built up sizable businesses ferrying students, workers, and tourists back and forth, and this could now be in jeopardy, at least for the remainder of 2020.
Africa is much more exposed to the Chinese market than other regions around the world so this crisis could also be the motivation that prompts forward-thinking policymakers on the continent to accelerate plans to further diversify their trade and investment relationships.