By: Nghiinomenwa Erastus
If the Covid-19 pandemic impact prolongs, global GDP losses could rise to $5,3 trillion over five years relative to current projections, with several million more lives to be lost.
The International Monetary Fund (MF) projected last year at the end of October- saying that further unchecked transmission makes the emergence of new variants including some that are resistant to existing vaccines more likely.
The IMF said this will “possibly put the world back at the starting line in the race against the virus”.
At the end of October among advanced economies, about 65% of the population was fully vaccinated, and booster shots were available in many of them.
By contrast, the vaccination rate was less than 2% among low-income countries.
Domestically (in Namibia) 344 627 persons have completed the vaccination, translating to 23% of the target population by 4 January 2022.
At the same time 6 225 people have received a booster dose of the COVID-19 vaccines.
IMF senior economists explained that it was a global problem and not for particular countries or regions.
As public health officials have stressed repeatedly, the pandemic is not over anywhere until it is over everywhere.
“If Covid-19 were to have a prolonged impact, we could see global GDP losses rise to US$5,3 trillion over five years relative to our current projection, with several million more lives lost,” their assessment revealed.
In the October 2021 World Economic Outlook, the IMF projected that aggregate output for advanced economies would regain its pre-pandemic trend path in 2022 and exceed it by 0,9% in 2024.
By contrast, output for emerging markets and developing economies, excluding China, is expected to remain 5,5% below the pre-pandemic forecast in 2024.
Of particular concern is the growing divergence in economic prospects between rich and poor nations.
Since 2020, the Namibian economy has only registered two quarterly growth, which came through last year- waiting on the fourth quarter output.
From 2019, it has only recorded three quarterly growth, once in 2019 and twice last year, in the absence of 2021 fourth quarter output.
Many developing countries’ central governments are sailing on debt, lean budgets, and limited access to credit making their policy intervention less impactful without expenditure.
The pandemic induced the highest funding gap ever experienced by the Namibian government for the current financial year amounting to N$29,4 billion.
As a result, the country’s debt is expected to reach 73,6% of the country’s Gross Domestic Output.
After nearly two years of the most economically devastating pandemic in a century, what are the initial lessons learned?
IMF economists highlighted that the Covid-19 crisis has made it clear that pandemic policy is economic policy.
“There is no durable end to the economic crisis without an end to the health crisis,” they wrote.
They added that ending the pandemic is therefore critical for global macroeconomic and financial stability, which makes it of fundamental importance.
The IMF’s projections and policy recommendations for the global economy rely crucially on the relative success of the race against the virus, which need collective efforts across the globe.
The pandemic’s impact is not only in the short-term but also is expected to spread in the future.
Resultantly, systemic risks posed by future pandemics and global health concerns should be more explicitly accounted for in economic analysis and surveillance, the IMF economists advised.
Secondly, the pandemic lessons highlight that the world needs better stewardship of global public goods, including preparedness to fight future pandemics.
According to the IMF economists, stewardship will require much greater coordination and collective action than the world has managed to summon so far.
The team elaborated that urgent steps are needed to arrest the rising human toll and economic strain from the Covid-19 pandemic that is exacerbating already-diverging recoveries.
The IMF targets vaccinating at least 40% of the population in all countries by the end of 2021 and 70% by the first half of 2022.
At the same time, they want to track and ensure against downside risks (due to the rise of new variants or supply-chain problems); and saving lives by ensuring widespread access to tests, treatments, personal protective equipment, and other critical health tools.
Progress toward the key actions needed to achieve those targets has been mixed, and the world is still behind.
According to the IMF assessment, as of the end of October, some 75 to 80 nations, mostly in Africa, were not on track to meet the end-2021 40% vaccination target, Namibia included.
Fifty-five of these countries will likely have problems primarily with supply, whereas 24 will have both supply and absorption-capacity issues.
The IMF plan recommends near-term actions to end the pandemic and support a broad-based economic recovery.
Immediately closing the 550 million dose gap to achieve 40% coverage by accelerating existing dose donations to the Covid-19 Vaccines Global Access (COVAX) facility.
An initiative aimed at equitable distribution of vaccines, and pledging new donations.
The ACT-Accelerator is a partnership of the World’s International Health Organizations to fight Covid-19.)
The economist team added that it was imperative to maintain collective accountability of progress against targets through frequent engagement between advanced economies, and other key stakeholders.
Beyond the near term, the team also highlighted that it will be important to expand regional manufacturing capacity of vaccines in developing economies and monitor risks.