The world is in crisis. Covid-19, also referred to as the coronavirus, is a global pandemic, affecting the health and livelihoods of many. The impact on human life is a very serious concern, and the latest figures show global confirmed cases exceeding 2 million, with over 130 000 deaths. The African continent now has over 16000 confirmed cases of the coronavirus, with South Africa (2506 confirmed cases) at the epicenter. In addition to the catastrophic global health crisis, Covid-19 has the potential to be the most abrupt shock the global economy has ever faced. While it is difficult to fully forecast the extent of the economic disruptions of Covid-19, it is estimated that global GDP growth will decline by 0.4 per cent, costing the global economy up to 3.5 trillion USD.
Countries around the world are implementing policies for prevention and containment, in order to control the spread of the virus. Many countries are enforcing significant lockdowns, which has been shown to help stop the spread of the virus. China, as an example, after intense lockdown measures, is finally starting to show a reduction of cases and their economy is on the road to recovery. But the virus is spreading at a rapid rate, and as the rest of the world starts implementing lockdowns, economic activity is dropping at unprecedented rates. National lockdowns are being implemented in different ways, with varying levels of severity across the globe, and are intended to create physical distancing among people, slowing the spread of the virus, in an attempt to not shock and overwhelm the healthcare system. While lockdowns are necessary and important in slowing the spread of the coronavirus, it will also cause inevitable, cascading economic crises.
Countries are having to deal with changes in supply chains, closures of exporting manufacturing facilities, revenue loss from tourism, and declining commodity prices. McKinsey outlines some of the economic impacts that will occur, as a result of the public-policy and public-health responses to the virus. The rise of unemployment, decline in consumer spending, businesses closing, credit defaults, and market volatility are just some of the economic impacts of the virus. Companies all around the world have had to adapt their business models and change their operations, in response to the virus. Where possible, companies have enabled workers to work remotely from home, but some have had to close temporarily, and some smaller businesses have simply gone out of business.
The rapidly changing situation of the global pandemic puts businesses in a highly complicated position, having to make difficult decisions. Companies need to reassess business plans, keep investors at ease, and forecast for the months to come. KPMG provides valuable insights for business continuity and outlines measures to help businesses navigate the uncertain consequences of Covid-19. The steps cover how to turn things around rapidly, overcome financial difficulties, and coping with distressed situations. Some steps include stabilizing cash, assessing your liquidity and creating a stakeholder management plan, while assessing potential risks.
In response to the global efforts and call to slow the spread of the coronavirus, Pengo Insight has discontinued the market mission service offering, as this has a travel requirement. We are, however, tech enabled and are committed to servicing our clients through our bespoke online solutions. Clients still have access to our on-demand experts via online consultations. In order to support our freelance experts and clients during this time, we have introduced tailored paid surveys and we are developing a remote work project platform which will provide access to top expert talent for remote projects. We, as a global community, need to rely on one another and use any support we can, in order to get through these times. As we all try and manage or mitigate the immanent effects of Covid-19, consider Pengo Insight to help address your business needs in Africa. Let us all act responsibly, ethically, and humanely during this pandemic.