COVID-19 : The global impact of COVID-19 on the financial, business, and trade sectors.

Introduction

The World Health Organization declared COVID-19 a pandemic on March 11, 2020, causing a huge impact on people’s livelihoods, families, and communities. In addition to the serious implications for people’s health and the healthcare services, Coronavirus (COVID-19) continues to make significant implications on businesses, financial services, employment, service sectors, and the global economy at large. The COVID-19 pandemic continues to impact countries around the world.

Many are experiencing further waves of infection and the number of new Coronavirus cases worldwide continues to fluctuate. However, several COVID-19 vaccines have been approved for use in different countries, and vaccination programs are well underway. Nevertheless, it remains important for the public to stay vigilant, continue to follow safety precautions, and adhere to rules and regulations set by the government.

As of March 28, 2022, around 482 million cases had been recorded worldwide. The United States had the highest number of COVID-19 cases, followed by India and Brazil. Sadly, the number of Coronavirus-related fatalities was around 6.1 million, and the U.S. is the country with the most COVID-19 death worldwide. In addition to the pandemic mental health has been considerable due to social distancing and lockdown measures.

As of March 28, 2022, the number of COVID-19 vaccine doses administered worldwide had reached over 11 billion. The countries that had administered the most vaccinations were China, India, and the United States.2 For the case of East Africa, as of March 1, 2022, the cumulative number of COVID-19
cases had reached over 1.3 million with Ethiopia and Kenya being the most affected countries, registering roughly 469,000 and 323,000 respectively.

Additionally, by March 2022, the number of Coronavirus (COVID-19) cases in East Africa corresponded to roughly 11.5 percent of the total number of infections on the whole African continent and the death toll from the COVID-19 outbreak in East Africa reached 25,000 in March 2022.3 In Rwanda alone, the cumulative number of COVID-19 cases as of March 1, 2022, had reached 129,516, with 1,457 reported deaths, 45,472 recoveries, and 16,555,832 administered vaccinations.

4 Despite the continued existence of the COVID-19 pandemic, the government of Rwanda recently on 4th March 2022 announced the full re-opening of the economy and lifting of curfew starting 5th March 2022, save for nightclubs, live bands, bars, receptions, and betting activities which are required to close by 2:00 am.

1 See https://www.statista.com/topics/5994/the-coronavirus-disease-covid-19-outbreak/#dossierKeyfigures
2 Ibid
3 Data sourced from https://www.statista.com/topics/7250/coronavirus-covid-19-in-east-africa/#dossierKeyfigures
4 See https://www.statista.com/statistics/1238313/cumulative-number-of-covid-19-vaccination-doses-in-east-africa-by-country

The government in the same communiqué also announced the re-opening of all land borders of the country effective 7th March,The measures as per the communiqué are however subject to review after one the month following health assessment. In this article, our legal team further collaborated to critically evaluate the current impact of the Coronavirus pandemic on identified key economic sectors including the financial sector and the business and trade
sector.

I. Brief overview on the impact of Covid-19 on the global economy.

The impact of COVID-19 on the global economy has been immense, and it could be many more months before it returns to pre-pandemic levels. Prior to the Coronavirus, forecasts showed that growth rates in real gross domestic product (GDP) would increase by 2.9 percent in 2020. However, due to COVID-19, real output fell by 3.4 percent.5 Furthermore, as a result of job losses and rising unemployment, there have been significant changes in the income tiers of people due to the coronavirus, whereby more than 130 million people worldwide have been added to the ‘poor’ tier.

Whereas many industries have felt the full the force of the economic downturn, it is documented that the COVID-19 impact on the travel and tourism industry has been particularly hard whereby commercial airlines We have witnessed unprecedented drop-in passengers, while countries and cities that rely on business from tourism have experienced substantial job and revenue losses. While there is no way to tell exactly what the There is widespread economic damage from the global COVID-19 pandemic.

There is agreement among economists that it will have a severe negative impact on the global economy. Early estimates predicted that, should the virus become a global pandemic, most major economies will lose at least 2.9 percent of their GDP over 2020. This forecast was already restated to a GDP loss of 3.4 percent. To put this number in perspective, global GDP was estimated at around 84.54 trillion U.S. dollars in 2020, meaning that a 4.5 percent drop in economic growth results in almost 2.96 trillion U.S. dollars of lost GDP.

economic output. Below is a brief analysis of the global impact of the COVID-19 pandemic.
world economies thus far as they bid to recover from the pandemic that has brought about socio-economic shock since its outbreak.

i. Impact on global stock markets

Global stock markets have also suffered dramatic falls due to the Coronavirus outbreak, although they were able to recover from the losses quite quickly. For example in

5 See https://www.statista.com/topics/5994/the-coronavirus-disease-covid-19-outbreak/#dossierKeyfigures

the US, the Dow Jones stock market reported its largest-ever single-day loss of almost 3,000
points on March 16, 2020, beating the previous record of 2,300 points that was set
only four days earlier. For the case of Rwanda, the economy also fell into its first recession due to the COVID-19 pandemic which state could potentially compromise years of gains in poverty reduction. According to the 16th edition of the World Bank Report, Rwanda Economic Update:

Protect and Promote Human Capital in a post-COVID-19 World, it is documented that the country’s GDP is estimated to have dropped by 0.2 percent in 2020, compared to a projected expansion of 8 percent before the COVID-19 outbreak.6 According to the report, the dire economic effect imposed by COVID-19 led to severe adverse implications for households, as thousands of people are facing unemployment, revenue losses, and

increased consumption prices and have thus been pushed into poverty. The Economic Update estimates that because of the lockdown, social distancing, and increased costs associated with the pandemic, the
poverty headcount is likely to rise by 5.1 percentage points (more than 550,000 people) in 2021, with more than 80 percent of the new poor in rural areas.7 Further to the above effect on the Rwandan
economy, the author of the report quotes that: “this fall in the category of corporate law and business law and investment.”

Access the full article: COVID- 19:THE GLOBAL IMPACT OF COVID-19 ON THE FINANCIAL, BUSINESS, AND TRADE SECTORS.

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Prepared by:

Abayo & Co. Advocates

• Jean Claude Mutabazi Abayo & Ismaïl Ddumba

• Phone Number: +250 788 300 535
• Email: info@abayo.law