Manias, panics, pandemics and world economics

THE Coronavirus, (COVID-19), began in the in Chinese industrial city of Wuhan in December. It has brought the Chinese industrial juggernaut to a virtual standstill. Schools have been closed down, public transport systems have been halted and businesses have closed shop. Some 780 million Chinese – about half of the population – have been placed on travel restrictions or on quarantine. The contagion has spread to 64 countries, including Nigeria. Among the worst affected are South Korea, Japan, North Korea, Singapore and Italy.

Coronaviruses are said to be zoonotic in origin, i.e. they tend to be transmitted from animals to humans. Symptoms include respiratory problems, fever, cough and breathing difficulties. In severe cases, it can lead to pneumonia, severe acute respiratory syndrome, kidney failure and eventual death.

There have been all sorts of speculations as to the origin of this new mutation. The popular theory is that it began from a live animal market in Wuhan, where anything from bats to cats, snakes, pangolins, monkeys, cockroaches, worms and dogs are sold for food. The other theory is that it is an accident on the scale of the nuclear disaster at Chernobyl, from a bacteriological laboratory that is actually stationed in Wuhan. Yet another, propounded by an anonymous Chinese senior military intelligence officer, is that it was allegedly the result of a failed attempt to smuggle the virus to a foreign power.

According to the latest data, a total of 86,993 cases were identified globally, of which 2,979 deaths were registered while 42,363 are said to have recovered. China, has taken the heaviest toll, with 79,827 cases, of which 2,870 deaths were recorded while 41,854 have recovered.

Nigeria recorded its first case on 27 February, through an Italian national who arrived Murtala Mohammed International Airport in Lagos. We understand that the health authorities have quarantined the man and have been rounding up all the people known to have interacted with him in one way or the other.Last week, 4 Chinese nationals arriving via Ethiopia, were apprehended in Wase, Plateau State. They have been quarantined for allegedly exhibiting symptoms of the virus.

There has inevitably been fear and panic throughout the world. Entire cities have been shut down. Some 20 global airlines have stopped all flights to China, among them American Airlines, Air France, British Airways, Delta Airlines, KLM, Qatar Airways, Air Canada, Singapore Airlines, Korean Air, Virgin Atlantic, Etihad and United Airlines.

According to WHO, the fatality rate so far has been around 2.0 percent, as contrasted with SARS which killed 10% of all infected individuals in 2003 and MERS, whose fatality rate in 2012 was as high as 35 percent. A worrisome aspect is the velocity of COVID-19 which took only 48 days to infect the first 1,000 victims, as contrasted with MERS which took 93 days and SARS which took 130 days.

Experts also caution that it will take several weeks before we fully understand the epidemiology of COVID-19, given its incubation period 14 days and the fact that new diagnostic kits are still being developed.  An expert in disease control, William Shaffner of Vanderbilt University in the United States, was quoted as saying, “there is much we don’t know about this virus and we are learning as we go along.”

There is controversy as to whether the ravages of COVID-19 have the intensity and geographic spread to be tagged a “pandemic”. Globally, the WHO, has the sole authority to determine if an epidemic has become pandemic. They have described the coronavirus so far as a disease “with pandemic potential”.

Other experts disagree. Professor Jimmy Whitworth of the London School of Hygiene and Tropical Medicine, has argued that “many people would consider the current situation a pandemic, we have ongoing transmission in multiple regions of the world”. Nathalie MacDermott of the UK National Institute for Health Research believes we are “we are teetering on the balance of a pandemic”.

The economic consequences so far have been devastating. The price of oil has fallen below US$50 per barrel, for the first time since the summer of 2017. International financial markets in London, New York, Frankfurt and Tokyo have taken a big hit. An estimated US$5 trillion, amounting to 11% of the total capitalisation of all listed companies, have been wiped out. The flight to safety has been compared ominously to the crash of 2008, as investors move assets into government bonds and gold.

The highly respected Bank of England Governor Mark Carney was quoted as saying that global economic growth this year “would be lower than it otherwise would be, and that has a knock-on effect on the UK”. He also hinted at interest-rate cutsto restore business confidence. US Fed Chairman Jerome Powell on his part took the unusual step of issuing astatement to reassure Americans that there is no cause for panic; promising to “use our tools and act as appropriate to support the economy”.

In the words of one global financial analyst, COVID-19 is “unsettling supply chains, sapping sales of some products, throwing travel into chaos, freaking out the stock markets, and intensifying fears of a global recession”. Industrial shut-downs in China, Japan and Germany could have grave repercussions for global supply chains.

China is Nigeria’s biggest trading partner. Already, several retail businesses are suffering in our country. Aviation, international trade, capital flows and tourism will experience considerable setbacks this year. China, the locomotive and engine of world growth, may see an unprecedented reversal of fortunes. According to the consultancy firm, Oxford Economics, if the situation deteriorates to the level of a pandemic, world growth will go down to zero or even negative.

Nobel laureate Michael Spence estimates a 2-4% quarterly fall in growth in China’s economy with possibility of a rebound in the final quarter if the virus is contained. But he also warns that “one cannot rule out the possibility of a prolonged pandemic causing far more extensive damage to economies, owing to business failures, declining employment, faltering private investment and weak or late policy responses”.

One saving grace is China’s economic resilience, thanks to its prodigious digital economy that accounts for as much as 35% of retail transactions.

Firms located in China are also more likely to move their supply chains out of the country; a trend that has already begun due to the country’s changing comparative advantage and rising labour costs.

Evolutionary biologists tell us that life on this planet has been a titanic war between Homo Sapiens and viruses. Every decade comes up with one eruption or the other. What we must do isover-prepare: boosting resilience of national health systems, civic communities, surveillance and risk management systems.

Medical science is yet to find a real cure. The best advice centres on prevention through regular washing of hands, covering mouth and nose when coughing and sneezing, thorough cooking of meat and eggs and avoiding close contact with anyone showing symptoms.

In this atmosphere of fear and panic, all sorts of charlatans claim to have discovered “cures”. Such nostrums range from garlic to ginger, lemon, and chloroquine. What scientists are agreed on is that the disease’s survival rate in warm environments is rather limited. People with robust immune systems have better chances of survival. It requires eating lots of fruits and vegetables, including lemonand avocado. Exercise and frequent drinking of water will allow your system to flush out any pathogens, while a dry oesophagus, on the other hand, will give the virus a fertile eco-system to invade the lungs, with fatal consequences.

I recently met the Chinese Ambassador to our country, Dr. Zhou Pingjian. I expressed our heartfelt solidarity with the government and people of China.  I told him that China has suffered worse calamities in history before. She will emerge stronger and more prosperous from this one. This was before the first recorded case surfaced on our shores.

I recently met the Chinese Ambassador to our country, Dr. Zhou Pingjian. I expressed our heartfelt solidarity with the government and people of China.  I reminded him that China has suffered worse calamities in its history and that she will emerge stronger and more prosperous from this one. This was before the first case surfaced on our shores.

China is our biggest trading and investment partner today. Any slowdown in the Middle Kingdom is bound to send negative ripples into our economy. Already, there is evidence that Nigerian retailers with links to China are beginning to feel the pinch. Falling oil prices and a slowdown in capital flows will further dampen economic growth in Nigeria

Nigeria is becoming virtually a failed state. But we have also proven to be people who can rise to the occasion when the imperatives of national survival demand it. We responded victoriously to Ebola in 2014, thanks to the efforts of patriots such as Stella Ameyo Adadevoh and her medical colleagues.Lagos State Government also played its part, as did our federal government. If we did it before, we can do it again!