Restarting economies during Covid-19

Business Writer

Regions with significant ongoing transmission of Covid-19 should expect that restarting economic activity, before people are immune to the disease, will only lead to more transmission, economist from Mckinsey & Company have said.

With the threat of Covid-19 to lives and livelihoods expected to fully resolve only when enough people are immune to the disease, governments are advised to first slow the spread of the virus before opening up parts of the economy.

“Until then, governments that want to restart their economies must have public-health systems that are strong enough to detect and respond to cases,” reads part of the report, titled “How to Restart National Economies During the Coronavirus Crisis”.

Zimbabwe has also been hit by Covid-19 with 23 confirmed cases and three deaths having been recorded as of Wednesday night.

However, due to lack of adequate resources, the country has so far done 716 tests, most of them in Harare and Bulawayo.

The country has also not offered much relief support to households and businesses a situation that will worsen the impact of Covid-19 on the economy at both household and national level.

Vulnerable members of the community have been promised a $200 cash transfer per month for the next three months while corporates have not received much in terms of financial support.

Some firms have already announced their inability to pay full salaries this month, while others have started retrenching contract workers putting pressure on authorities on the way forward.

While neighbours South Africa and fellow regional country Namibia have extended their lockdown period by another two weeks, a decision is yet to be made in Zimbabwe.

The Mckinsey & Company report recommends that governments recognise differences among regions and sectors in order to get people back to work faster and safeguard livelihoods.

In Zimbabwe, mine houses like Zimplats among other essential companies have been allowed to continue operating. Agriculture produce markets have also been reopened although practising social distancing has been difficult.

According to the Mckinsey & Company report, the first and most obvious factor in determining readiness is the number of new cases in a given area.

A second factor in thinking about this is the strength of the systems in place for detecting, managing and preventing new cases, including adequate medical capacity, especially of intensive care units (ICUs), for those with severe disease; the ability to perform a diagnostic test for Covid-19 with a fast turnaround time; and several other elements.

The report suggested that opening up the economy be done by region and by sector with governments assessing both the risk of transmission and the relative economic importance of each sector.

“When coupled with an understanding of each region’s relative economic importance, leaders can quickly identify places where more jobs are at stake — which in turn may help leaders prioritise efforts on building healthcare capacity.

“For instance, authorities might define importance using metrics such as total employment, vulnerable jobs, or contribution to the economy.”