Apart from the cases and death rolls recorded as a result of COVID19, the disease has also affected a lot of businesses and economy around the world.
From the beginning it was clear that Covid-19 influences all sides of the economy: supply and demand. Distribution of goods and services is disrupted due to the closure of factories and offices and the subsequent decline in production. But demand also falls because customers are staying at home and avoiding spending, and mothball investment by companies.
According to the a report in the Guardian, Conventional policy measures – such as cutting interest rates or cutting taxes –seem to work best when there’s a demand shock. There is a limit to what they can do in the event of a combined supply and demand shock.
Despite globalization, a lot of economic activity remains local, but here too it will have an effect as people cancel dentist appointments, delay their hair cut, cancel online orders and wait to sell their home.
What’s more, much of the lost production can never be recuperated in a service- economy. When people do not go out to their favourite local restaurant for their weekly meal for the next two months, they do not eat four days a week until the fear of infection is removed.
In the podcast, I interviewed Busin Mavunga and Bongani Cembi both entrepreneurs in whose businesses have been affected due to the disease and self-isolation.
Audio edited with Anchor
Interludes: Denzel Sprak and Union Hall Melody. Credit: Anchor