Experts discuss the effects of the Covid-19 pandemic on the economy
Speakers at the ‘Pandenomics’ webinar recently hosted by Nedbank Namibia CIB and Simonis Storm, and supported by Nedbank Business Banking and Nedbank Private Wealth, has called for more people to get vaccinated in order to help fuel economic growth after the impacts of the Covid-19 pandemic.
The panellist included: Nedbank Group South Africa Senior Economist, Nicky Weimar; Head of Nedbank Namibia Corporate and Investment Banking (CIB), Dr Edward Turner, Simonis Storm Economist, Theo Klein; and Simonis Storm Managing Director, Bruce Hansen, who also moderated the discussion.
During the discussion, Simonis Storm economist, Theo Klein, presented the economic impact and response to the COVID-19 pandemic. The presentation outlined that even though the Namibian economy has been declining for the last six-year, the COVID-19 pandemic, which resulted in the government having to introduce its lockdown policy, amplified the decline.
According to the Simonis Storm report, the sectors hit hardest during this period include metal ores, beverages, accommodation, food services, meat processing, basic non-ferrous metals and transport. Growth is however forecasted for these sectors, but only marginally. Economic contractions have also resulted in job loss and retrenchment in these sectors. The presentation outlined that a total of 13,682 Namibians were retrenched between January 2020 and June 2021. Of this number 10,773 retrenchments were due to economic reasons, closure or discontinuation of business, while 2,909 were a direct result of the COVID-19 pandemic.
Some of the factors which could lead to short-term economic growth include a higher than average rainfall season, a stronger focus on renewable energy, as well as an increase in the number of people being vaccinated.
Senior Economist at Nedbank Group South Africa, Nicky Weimar, emphasized the urgent need for people to be vaccinated. “Studies have proven that millions of people who have been vaccinated are 90% less likely to end in a hospital or dying, compared with those who have not been vaccinated,” she stated.
According to international media reports, the South African Human Rights Commission (SAHRC) has stated that a general law mandating Covid-19 vaccination in South Africa would not necessarily be a human rights infringement. According to SAHRC, a general law compelling South Africans to be vaccinated would be constitutionally sound under the right circumstances.
Weimar, supportive of the SAHRC, warned that although there is nothing in South African law that expressly or directly prevents an employer from implementing a compulsory vaccination policy for employees, companies can apply such a policy.
“Companies can enforce compulsory vaccination, as it is their property and they can’t really risk putting a large number of people’s lives at risk because a few do not want to get vaccinated. At Nedbank South Africa, we are considering adopting the same policy. We certainly will enforce staff who work face-to-face with clients to get the vaccines, and you could see more companies that will do that.”
Based on her understanding of the relationship between real economic trends and developments within the financial markets, Weimar predicted that the COVID-19 vaccine inequity would have a lasting and profound impact on socio-economic recovery in low- and lower-middle-income countries unless urgent action is taken to boost supplies of the vaccine and assure equitable access for every country.
Simonis Storm Economist, Theo Klein blamed conspiracy theories on social media platforms for creating fear among the population as one of the reasons for the low numbers of vaccinated people in the country. “The lack of the preferred choice of vaccinations available is another reason for Namibians not getting the jab,” he stated.
Head of Corporate and Investment Banking (CIB) at Nedbank Namibia, Dr Edward Turner, agreed, adding that scientists have not yet provided clear answers on what caused the pandemic and why people should take the vaccines. It appears that many people need clear answers before they are willing to take the vaccine in the current scenario.
The panellists all agreed that the tourism sector has great potential to grow in the near future. This is mainly because countries such as Germany and the United Kingdom have removed Namibia from their red list of countries facing travel restrictions, despite Namibia’s Covid-19 infections.
The Dubai Expo, which is taking place in the United Arab Emirates (UAE) for a period of six months, ending in March 2022, is also an excellent opportunity for investment. The Namibian Pavilion at the Expo aims to display the country’s potential to generate sufficient and sustainable energy for both local consumption and export.
With reference to the new NIPDB (Namibia Investment Promotion and Development Board), Dr Turner said the following: “Namibia needs investment. There will be a domino effect and there will be some issues, but it is positive – there is a locomotive in place and it just needs to pull the other wagons.”
Concerning some of the learnings to come from the COVID-19 pandemic Dr Turner emphasized that one of the main lessons learned is that one needs to be prepared, “We need a big rethink—where we are, and where we want to be. That is my hope for the country,” said the former lecturer and researcher.
Klein in the same vein inspired Namibians to be more creative—to find ways to grow their businesses, or, for the unemployed who lost their jobs during the height of the pandemic to turn their hobbies into income-generating ideas. All is not lost yet. “For those Namibians who lost jobs and lost a sense of hope, be creative and think outside the box.”
“Some of the low-hanging fruits that can drive economic growth in the next twelve months include agriculture, fishing, tourism, and ICT sectors, among others,” said Klein.
Weimar echoed the same sentiments and said that there are many opportunities for Africa elsewhere in the world. “Challenges, however, include the rise in inflation, global shortages, high energy prices and the anticipated change in US monitory policy that could pose a threat to emerging markets, especially sub-Saharan Africa.”
“We are all part of the African Continental Free Trade Area (AFCFTA) and I really think we should be looking at this going forward,” added Weimar.
The online event was held under the theme “Namibian Economy: In a pandemic and getting out of it,’ and is currently available on the Nedbank Namibia Facebook page.