TITLE:
Analyzing the Effect of the COVID-19 on the Global Economy: A Case Study of Its Influence on Africa’s FDI and Foreign Exchange Inflows
AUTHORS:
Isaac Adjei Tetteh, Jin Gao
KEYWORDS:
Global Economy, Pandemic, Recession, Africa, Foreign Direct Investment, Foreign Exchange
JOURNAL NAME:
Open Journal of Business and Management,
Vol.8 No.6,
November
4,
2020
ABSTRACT: The global economy has taken a major hit due to the grave effect of the spread of COVID-19.
Developed countries are struggling to sustain their economies and this gives an
indication of the current state of developing and underdeveloped nations. The
closure of businesses and the laying off of some workers, coupled with the
closure of some international air and sea ports indicates the stagnation of
global economic growth and process with a forecasted massive recession. The
local governments of various countries have collectively inputted strategic
efforts to supplement the situation with diverse financial relief funds and
fiscal assistance policies. The GDP of the global economy is predicted to
shrink by 5.2% according to the minimum economic forecast predictions (World Bank, 2020). The severity of the pandemic will undoubtedly
leave a negative and uninspiring blueprint on the face of the global economy.
The pandemic like a binocular has exposed the multifaceted cracks in the
various economy sectors and their unpreparedness for global storms such as
this. Foreign Direct Investment and foreign exchange inflows into the continent
of Africa have been stable on average over the years; however, the
current state of the global economy predicts a sharp fall which will not easily
recover until there has been a full recovery. This gives a baseline forecast of
the adverse effect of the pandemic on the African soil as well as other
developing and underdeveloped countries and regions globally. Therefore,
various governments within the continent must develop and implement breakwater
policies such as intra-regional integrations as well as strong international
relations that will help hedge against and cushion the effect of another global
storm. This paper seeks to analyze the effect of the pandemic on the global
economy, a case study of its influence on Africa’s FDI and foreign exchange
inflows.