Socio-economic Effect of COVID-19 on the Global Economy

Abstract

Epidemics and pandemics have been part of human existence since time immemorial. Although the foregoing terms are often used interchangeably, they have distinctive meanings in the scientific world. The world has been plagued with a significant number of epidemics and pandemics in prior and recent years. Earlier news on the outbreak of COVID-19 was received with scepticism by leaders and citizens of several advanced, emerging and developing economies around the world. Most global leaders doubted the exponential effect of COVID-19 on their respective countries and on the global economy as a whole. The purpose of this research was to examine the impact of COVID-19 on global economic activities and output. The research relied on the quantitative approach to scientific inquiry. Specifically, a cross-sectional design was adapted and used in the study. This enabled the researchers to gather relevant research data over a specific period of time. Data required for the conduct of the study were obtained mainly from secondary sources. These included peer-reviewed articles published in journals, research papers, textbooks, and newspaper publications; Google Search Engine including Worldometers.info, Africanews.com, and Weforum.org; financial websites such as Tradingeconomics.com; and electronic databases of the World Bank, International Monetary Fund, and World Economic Outlook, among other significant sources. Annual data on global gross domestic products from 1990 through 2019, data on the top twenty global economies from 2019 through 2021 and available data on the COVID-19 pandemic as of 20th April 2020 were used in the study. Regression models and descriptive statistics were used to describe the research variables; and to evaluate their behaviour over the stated time frame on the global economy. Findings from the research revealed a positive but non-significant relationship between fiscal year and global GDP (p = 1.12239, p > 0.05). The results suggested that the fiscal year alone has no significant influence on global GDP. Rather, internal and external environmental factors in a given financial year, such as Tsunamis, tornadoes, earthquakes, bushfires, hurricanes, and pandemic outbreaks (such as COVID-19), influence global GDP and its attendant growth. The findings revealed Ghana’s estimated economic losses from COVID-19 (GH¢15 billion) are equivalent to 4.27% of projected GDP (GH¢351.19 billion) for 2020 and equivalent to 4.34% of GDP (GH¢346 billion) for 2019, while estimated global economic losses from the pandemic (US$2.7 trillion) ranged from 3.05% to 3.06% of projected global GDP (US$88.574 trillion or US$88.312 trillion) for 2020. Almost all African economies are struggling to patch the economic holes created by the menacing COVID-19 pandemic. Since the non-occurrence of a similar or higher magnitude pandemic in the near and distant future cannot be guaranteed, the researchers recommended the need for leaders of various economies to put the necessary contingency measures and structures in place to avert devastating effects, should any pandemic occur. Experiences from the Ebola and Coronavirus outbreaks are expected to serve as strong practical case studies for the Africa Centre for Disease Control (ACDC) to improve its response rate to epidemic and pandemic outbreaks on the continent. The ACDC should be able to advise member countries on the state-of-the-art medical facilities required to facilitate treatments for epidemic and pandemic outbreaks. There is a need for inter-country collaboration. That is, African countries that are “handicapped” in medical facilities and equipment should collaborate with those that are endowed with and also share expertise to save the continent from socio-economic dissipation. The World Health Organisation (WHO) must continue to monitor health conditions and situations in countries and territories and provide early signals to enhance the preparedness and responsiveness of various economies. Member countries must provide the necessary logistics and technological assistance so WHO could improve on its existing structures and mechanisms for “systematic disease surveillance and reporting.”