People & Money

 COVID-19’s Assault On the Economy: Meet the Generals

The coronavirus pandemic has changed the thinking of global leaders across the world. It has placed policymakers on their toes and gradually changed the dynamics of international relations. Besides the cost in terms of lives and public health, the pandemic has created an economic shock on a scale that could easily exceed the 2008 financial crisis. While the Great Recession resulted from a financial shock that reverberated through the U.S. and European economies, the entire world now faces a massive downturn across all sectors of the economy.

To avert global economic crisis and global depression, we look at actors and decision-makers at the forefront of world economy during the COVID-19 pandemic:

  1. Mohammed Al-Jadaan

Al-Jadaan is a commercial lawyer and co-founder of Al-Jadaan and Partners Law Firm who has served as Saudi Arabia’s Minister of Finance since November 2016 and concurrently as Minister of Economy and Planning since March 2020. Since the inception of coronavirus, Al-Jadaan has spearheaded the Saudi government’s package to cushion the effect of the pandemic.

This includes 50 billion riyals ($266 million) to accelerate payment of private sector dues, provide liquidity to several sectors, and cover wages of those working in passenger transport. Another 47 riyals has been set aside for the health sector, to be disbursed if needed to build capacity.

In March, Jadaan announced the allocation of 70 billion riyals to support businesses, as well as the postponement of some government fees and taxes. The government has also set aside about 9 billion riyals to be disbursed to cover part of the wages of private-sector workers to deter layoffs.

  1. Gita Gopinath

Gopinath is an Indian American economist who has been the Chief Economist of the International Monetary Fund since 2019.

In that role, she is the director of the IMF’s Research Department and the Economic Counsellor of the Fund. Gopinath has predicted the worst global downturn since the Great Depression. In a recent interview with Bloomberg, she itemised what the international community needs to do now and what lessons policymakers should learn from the COVID-19 pandemic and its fallout.

The IMF chief economist Gita Gopinath believes more needs to be done on the international front to help emerging market, developing and low-income countries as they look to cope with the impact of the COVID-19 pandemic.

  1. Rishi Sunak

Sunak was appointed Chancellor of the Exchequer on 13 February 2020. He was previously Chief Secretary to the Treasury within the Government of the United Kingdom, and Parliamentary Under-Secretary of State at the Ministry of Housing, Communities and Local Government from 9 January 2018 to 24 July 2019.

Since he became chancellor, he has announced a £350 billion rescue package for businesses. The funding includes more than £6 billion to support health services, free up hospital beds, and deliver urgent priorities, including acquiring ventilators, diagnostic tests, and protective equipment for NHS staff. He held talks with his IMF counterparts on the UK’s global approach to coronavirus, reiterating the UK’s commitment to helping the world’s poorest countries recover from the outbreak – doubling a £2.2 billion loan to the IMF’s Poverty Reduction and Growth Trust.

  1. Zainab Shamsuna Ahmed

Ahmed is the current Minister of Finance, Budget, and National Planning. She was appointed on August 21, 2019, by President Muhammadu Buhari brought the two ministries under her as one. In the wake of coronavirus, Mrs. Ahmed has been working tirelessly on the amendments to the Medium-Term Expenditure Framework (MTEP 2020-2022) & 2020 Appropriation Act. The proposed amended budget will provide for the COVID-19 Crisis Intervention Fund & other adjustments required, due to the decline in international oil prices. The ministry has also developed a comprehensive framework for the transparent management of the private sector-led contributions to COVID-19 in Nigeria.

5. Tito Mboweni

Mboweni is South Africa’s Finance Minister and the political head of the National Treasury. He is responsible for the financial management of South Africa’s government affairs, drawing up the budget, and developing economic policy. When the lockdown was announced, his office acted immediately to announce a set of Phase 1 economic measures including

  1. An Instruction Note 8 of 2019/20 applicable to Public Finance Management Act (PFMA) institutions and a Municipal Finance Management Act (MFMA) Circular 100 for municipalities and municipal entities, to speed up the procurement of goods/commodities required to reduce and control the spread of the virus.
  2. The first set of exceptional tax measures as part of the fiscal package. These measures are over and above the tax proposals made in the 2020 Budget on 26 February 2020. The tax adjustments are made in light of the National State of Disaster and due to the significant and potentially lasting negative impacts on the economy from the spreading of the COVID-19 virus.

Mboweni has called on the international community to facilitate the flow of medical supplies to Sub-Saharan Africa during these exceptional times and also urge the Fund to support economic recovery efforts and ensure a more resilient and sustainable global economy, once the urgency of the crises abates.

  1. Dr. Mohamed Maait

Maait is the Minister of Finance to the Government of Egypt. In the wake of coronavirus, the ministry announced that public investments will be increased by 10 billion Egyptian pounds (nearly 633 million U.S. dollars) to create more job opportunities. He also stressed that the government is eager to make available strategic and food commodities for the people and support the service sectors affected by the COVID-19 outbreak. The ministry has provided funds totaling LE 3.8 billion to support the health sector amid the coronavirus (COVID-19) pandemic.

  1. Kenneth Ofori-Atta

Ofori-Atta is a Ghanaian economist and co-founder of Databank in Ghana, currently serves as Minister of Finance. The authorities’ response has been timely, targeted, and proactively focused on increasing health and social spending to support affected households and firms. The Central Bank has recently taken steps to ensure adequate liquidity, preserve financial stability, and mitigate the economic impact of the pandemic while allowing for exchange rate flexibility to preserve external buffers.

Some of the impacts have resulted in the disbursement of $1 billion by the IMF, drawn under the Rapid Credit Facility (RCF). His ministry has also announced a GHS1 billion Coronavirus Alleviation Programme that will be funded from the Ghana Stabilisation Fund.

  1. Ngozi Okonjo-Iweala

Okonjo-Iweala is a Nigerian-born economist and international development expert. She served twice as Finance Minister of Nigeria (2003-2006 and 2011-2015) under the leadership of President Olusegun Obasanjo and President Goodluck Jonathan, respectively. She has also held several key positions at the World Bank, most recently as Managing Director.

Combating COVID-19 is more challenging in Africa than in other parts of the world, this is why Okonjo-Iweala is rooting for the continent In a piece she wrote with project-syndicate, she talks about how a two-year moratorium on all external-debt repayments would at least give governments the fiscal space they need to respond to the pandemic.

Since then, the IMF Board has approved debt service relief for 25 low-income countries, and the Chinese authority is about to do the same.

  1. Akinwumi Adesina

Adesina is the President of the African Development Bank. He previously served as Nigeria’s Minister of Agriculture and Rural Development.

To assist African government scaled through the pandemic, the Akinwumi Adesina-led African Development Bank Group (AfDB) unveiled a $10 billion Response Facility to curb COVID-19 and to assist regional member countries in fighting the virus. The Facility entails $5.5 billion for sovereign operations in African Development Bank countries, and $3.1 billion for sovereign and regional operations for countries under the African Development Fund, the Bank Group’s concessional arm that caters to fragile countries. An additional $1.35 billion will be devoted to private sector operations.

12. Steven Terner Mnuchin

Mnuchin is the Head of Treasury in the USA. He has a degree in economies and has worked in the finance and banking sector for years. He joined Donald Trump’s presidential campaign team in 2016 and was named the national finance chairman. After the US election, Trump appointed him as Secretary of the Treasury.

On the job, Mnuchin supported the tax reform of 2017 and advocated reducing corporate tax rates. He married Louise Linton, a Scottish actress and producer who appeared in the horror films Cabin Fever and Intruder and minor roles in the television series CSI: NY and Cold Case.

Through Mnuchin’s blessing, the Federal Reserve has planned to pump unrivaled levels of economic aid across the U.S., blowing trillions in rescue loans and bond purchases to buoy the American economy through the coronavirus pandemic. They have also opened a dozen special credit facilities to purchase a wide range of consumer, corporate, and government debt in exchange for loans to financial firms, businesses, and municipal governments.

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