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A Research and Development Expert at Center for Africa Poverty Eradication, Nana Fori, has researched into the economical effects of the novel Coronavirus pandemic with its findings revealing that the virus has thrown the world leaders into a dark and dangerous waters as they struggle to balance public safety, economic concerns, nationwide lockdowns, travel bans and many other interconnected factors.
The research indicated that the world’s economic activities have plummeted in the wake of the deadly virus globally, as unemployment has soared largely due to the social distancing policies designed to slow the spread of the virus.
Economies according to him, are currently in downturn during this period but will certainly have a temporary boom once the threats and effects of the pandemic passes. The GDP foregone will be restored temporarily but may take a long while, as people will resume their usual routines and jobs which they couldn’t do during the lockdown.
The Research Economist pointed that effects of the outbreak on economic activity in Ghana will last beyond the end of the social distancing, and GDP will recover slowly. Even after the health risks recede, economies may likely go back to where they were before if proper policies are implemented and enforced.
He stressed that at the beginning, when the virus surfaces, only a few people understood the timings and the period it would take for life to return to normalcy.
He expressed optimism that the discovery of the appropriate vaccine can allow economic activity to return to the pre-pandemic baseline.
He added, it is more likely governments would not only want to focus on public health policies but also would want to reopen the economy as measures may have to be put in place to curtail economic activity to some degree.
Nana Fori predicted that travels will be less common whilst businesses will have to space workers and customers further apart. Restaurants will be serving fewer customers at a time, and sporting events, concerts, and other activities involving large crowds probably will remain off limits for a while. And even if the rules allow, many people may be reluctant to return to life as it was before the outbreak of the virus due to its nature.
He also signaled the world to expect a quick but temporal economic recovery and bemoaned that the effect of the pandemic may take along while to heal.
He prompted Africans also to “expect a change in their household abilities and willingness to spend: workers will lose their jobs, and they are likely to drain savings and increased borrowing. And they may become more fearful about the future. That means, as governments opens up the economies again, people may be unable or not willing to spend as readily as they did before the virus.”
He indicated that it is imperative that state and local governments generally would have to balance their budgets in this perilous times.
“Governments will have to cut spending for economic recovery to be possible,” he posited.
Even once the economy reopens, firms may be fearful that they will close again either from a resurgence of coronavirus or from a new virus and investors may be less likely to invest in equipment or research and development. This decline in investment could make firms less productive than they would have been, also holding down GDP.
Human capital would be affected greatly due to the pandemic, the relationship between workers and firms are valuable, he stressed.
According to him, employers and workers will typically spend a lot of time in finding a good match, as some workers may then acquire or willing to acquire specific skills and knowledge to position themselves.
As businesses are laying off workers during the lockdowns, the affected workers might start looking for other jobs, or they may leave the labour market altogether, meaning human capital would be lost.
Once firms can reopen, they may have to start the process of finding and training workers again. This will also slow the recovery.
He advised that for us as a country to experience a fast economic recovery as a country, the goal of public policy in this era must first be to protect public health. Thus investing in personal protective equipment for health care workers, greatly ramping up testing and contact tracing, as well as doing everything possible to speed up the development and production of vaccines.
He added that governments should push more research funding into the local pharmaceutical companies and herbal medicines as well as building of more effective and efficient Infectious Disease Prevention team with offices across the country to work on intelligence gathering into the disease spread.
“Not only will these save live, but it will also create the conditions that will allow economic recovery to begin”, he said.
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